Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and investors indulged in trimming positions amid mixed cues from Asian and sluggish US markets in overnight trades. Market sentiments were dampened after report that Coal stock position at thermal power plants remains critical as more than half of the generating stations have less than a week's fuel stock. As per the latest data by the Central Electricity Authority, 56 coal-based power plants reported critical fuel stocks of less than seven days. Besides, exports of several agriculture products including rice, spices and tobacco have registered negative growth in August mainly due to decline in prices in the global commodity market also weighed on sentiment. Some mild weakness also came as FII inflows are getting muted over the past few weeks, showing signs that global outflows from emerging markets may have begun.

However, losses remained capped as the World Bank in its latest report has stated that Indian economy, which accounts for 80 percent of South Asia's output, is set to grow by 6.4% in 2015-16 as against 5.6% in 2014-15. Some support also came in with the CII Business Confidence Index (CII-BCI) for July-Sept quarter FY15 shooting up to 57.4, up from 53.7 in April-June quarter and 49.9 in Jan-March quarter this year.

Most of the sectoral indices were reeling under pressure, nevertheless stocks from Metal, Bankex and FMCG counters were the prominent losers. On the flip side, stocks from Information Technology, Realty and Realty witnessing much of the demand, topped the gainers list of BSE. In scrip specific development, Apollo Tyres has rallied after the Reserve Bank of India (RBI) allowed foreign investors to buy up to 45% stake in the company. Besides, shares of TVS Motor Company have surged after the company’s total sales rose 27% to 2.50 lakh units in September 2014 over September 2013.

On global front, Asian markets were trading mixed with Japan's benchmark Nikkei flat with as investors adopted wait and watch stance ahead of the Bank of Japan's policy meeting and the governor's speech later. Furthermore, US stock ended with marginal losses as investors turned cautious ahead of the quarter earnings. Back home, Indian rupee strengthened by 22 paise to 61.39 against the US dollar in early trade on increased selling of the US currency by exporters and banks. The market breadth on BSE was positive, out of 2248 stocks traded, 1180 stocks advanced, while 963 stocks declined on the BSE.

The BSE Sensex is currently trading at 26457.44 down by 110.55 points or 0.42% after trading in a range of 26570.38 and 26424.33. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index was up by 0.39%.

The gaining sectoral indices on the BSE were IT up by 0.60%, TECK up by 0.46%, Realty up by 0.46% and Consumer Durables up by 0.17%, while Metal down by 1.11%, Bankex down by 0.61%, FMCG down by 0.59%, Infrastructure down by 0.53%, PSU down by 0.32% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.32%, TCS up by 0.83%, Hindustan Unilever up by 0.80%, Infosys up by 0.67% and Axis Bank up by 0.63%. On the flip side, Hindalco down by 3.48%, HDFC down by 2.76%, Mahindra & Mahindra down by 2.20%, Cipla down by 2.04% and Sesa Sterlite down by 1.83% were the top losers.

Meanwhile, Indicating sharp improvement in the business climate of the country for the second consecutive quarter the CII Business Confidence Index (CII-BCI) for July-September quarter FY15 shot up to 57.4, up from 53.7 in April-June quarter and 49.9 in Jan-March quarter this year. During the same quarter last year, the index had touched the all-time low value of 45.7. The determination shown by Modi’s government at the Centre to provide an impetus to growth along with reviving the ‘feel good’ factor sent the business confidence index soaring for the second quarter in a row.

The CII’s 88th Business Outlook Survey is based on responses from over 150 industry members, majority of which i.e. 44% belong to large-scale sector, while medium scale companies comprise another 12 %. Around 38% and 6% respectively are from the small-scale and micro firms.

The  highest percentage of respondents, 41%, expect GDP in the current fiscal to expand by 5.0-5.5%, up from sub-5% growth witnessed in the last two years, while 30% respondents expect GDP to grow in a range of 5.5-6.0% in FY15. WPI Inflation has been estimated to average 5.5-6.5% in FY15 slightly higher, considering the likelihood of a sub-normal monsoon this year.

In a sign that economic recovery was sustainable, 46% of the surveyed businesses on the back of revival in domestic and global demand were contemplating new investment in the July-September quarter, whereas only 10% expected contraction. However, the survey also pointed that central bank played a very crucial role to maintain demand momentum.

Encouragingly, 77% of the respondents expect their sales to increase in the July-September quarter, much higher than 50% respondents in the previous quarter. Similarly, 49 per cent of the respondents expect their export orders to increase in July-September quarter compared to 39% respondents in the previous quarter.

The CNX Nifty is currently trading at 7,947.35 down by 17.45 points or 0.22% after trading in a range of 7,977.50 and 7,946.00. There were 17 stocks advancing against 33 declining on the index.

The top gainers on Nifty were Tata Motors up by 1.64%, Axis Bank up by 1.07%, HCL Tech up by 0.95%, TCS up by 0.85% and Hindustan Unilever up by 0.73%. On the flip side, Hindalco down by 3.54%, Cairn India down by 3.11%, Ultratech Cement down by 3.02%, Jindal Steel & Power down by 2.75% and HDFC down by 2.69% were the top losers.

Asian markets were trading mixed; Hang Seng gained 0.51%, KOSPI Index improved 0.15%, Jakarta Composite spurted by 0.34% and FTSE Bursa Malaysia KLCI was up by 0.30%. On the flip side, Nikkei 225 tumbled by 0.38%, Straits Times slipped 0.45% and Taiwan Weighted was down by 0.67%.