Markets continue to trade in negative territory amid feeble global cues

Indian equity benchmarks continued to trade in red on account of profit booking in frontline blue chip stocks amid weak global cues. Sentiments took a hit as Fed officials’ indicated that the Federal Reserve will probably start raising interest rates around the middle of next year. Furthermore, IMF warning that eurozone could slip into recession also weighed on the sentiments. Most of the sectoral indices were trading in negative territory with metal as top losing index down by around 2.77%.  Apart from blue chip broader indices too witnessed selling pressure with both mid cap and small cap indices were trading down by over 0.60%. However, markets got some support from the gain in IT and Teck. IT index was trading up by around 2.53% as Infosys September-quarter consolidated net profit came in at 31 billion rupees compared to consensus estimate of 29.20 billion rupees.

In scrip specific development, shares of Cairn India fell 3.2% to around Rs 289.40  amid concerns over production from key oil field in Rajasthan. On the other hand, Apollo Tyres has moved higher by 4% to Rs 224 after the Reserve Bank of India (RBI) said foreign investors can now buy up to 45% stake in the company.

On global front, most of the Asian markets were trading in red with Hang Seng down 1.73% and Nikkei 225 down 1.15%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,900 and 26,500 levels respectively. The market breadth on BSE was negative, out of 2,520 stocks traded, 813 stocks advanced, while 1,598 stocks declined on the BSE.

The BSE Sensex is currently trading at 26385.13, down by 252.15 points or 0.95% after trading in a range of 26301.38 and 26555.92. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.77%, while Small cap index down by 0.63%.

The gaining sectoral indices on the BSE were IT up by 2.53%, TECK up by 1.68% and Consumer Durables up by 0.22%. On the flip side, Metal down by 2.77%, FMCG down by 1.91%, Auto down by 1.89%, Bankex down by 1.46% and Capital Goods down by 1.20% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 6.13%, BHEL up by 1.71%, Dr. Reddys Lab up by 1.34%, Hero MotoCorp up by 1.28% and Sun Pharma Inds up by 1.17%. On the flip side, Tata Motors down by 4.44%, Hindalco down by 3.84%, Tata Steel down by 3.45%, HDFC down by 2.75% and Sesa Sterlite down by 2.58% were the top losers.

Meanwhile, indicating that economic growth in emerging countries continues to revive, the services and manufacturing activities across emerging markets  touched an 18-month high level during September. The HSBC Composite Emerging Markets Index, based on the survey of around 8,000 firms in 17 countries, rose to 52.5 in September, up from 52.4 in August. Moreover, on a quarterly basis the EMI averaged 52.2 in Q3, the best since the Q1 of 2013.

The HSBC survey highlighted that services activity rose at a stronger rate than manufacturing output for the second month running. The significant output growth was mainly driven by strongest growth in China's services economy as services activity in Brazil, India and Russia rose at either weak or marginal rates. However, the survey highlighted that the manufacturing and services sectors in India expanded at a slower pace as compared to China in September. In Brazil, business conditions improved, albeit marginally, for the first time in six months in September, with an upturn in new orders paving the way for a further upturn in the fourth quarter. While, Russia continued to eke out marginal growth in September, however, the inflows of new business slow to near stagnation.

The survey further indicated that new business growth remained close to June’s 15-month peak, but remained slower than the average over the nine-year series history. Thus, outstanding work declined slightly for the third month running and employment level remained broadly unchanged. On inflation front, the survey indicated that input price inflation slowed further to a 15-month low in September and manufacturing continued to record weaker cost pressures than services. Regarding the business expectation, the survey noted that, the outlook for global emerging markets remained relatively weak in September. The HSBC Emerging Markets Future Output Index tracks firms’ expectations for activity in 12 months’ time, and was little-changed from August’s three-month low in September.

The CNX Nifty is currently trading at 7886.25, down by 74.30 points or 0.93% after trading in a range of 7854.50 and 7912.65. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Infosys up by 6.06%, HCL Tech up by 2.36%, BHEL up by 1.83%, Dr. Reddys Lab up by 1.42% and Hero MotoCorp up by 1.28%. On the flip side, Jindal Steel & Power down by 4.62%, Tata Motors down by 4.55%, Hindalco down by 3.93%, Tata Steel down by 3.56% and Cairn India down by 2.95% were the top losers.

Most of the Asian markets were trading in red, Hang Seng down 406.09 points or 1.73% to 23,128.44, Nikkei 225 down 177.42 points or 1.15% to 15,301.51, Jakarta Composite down 37.63 points or 0.75% to 4,956.25, Straits Times down 29.18 points or 0.9% to 3,230.07, KOSPI Index down 24.33 points or 1.24% to 1,940.92 and Shanghai Composite down 12.86 points or 0.54% to 2,376.52.