Benchmarks pare initial gains to trade flat

Indian equity benchmarks have pared all their initial gains to trade flat in early deals on Tuesday as gains in Reliance Industries failed to offset losses in IT shares and FMCG major ITC. Initially, markets made a gap-up opening as sentiments remained up-beat after September retail inflation declined to 6.46 percent, lowest since the new series of Consumer Price Index was released in January 2012 and much below the RBI target of 8 percent by January 2015. However, traders turned cautious with RBI governor Raghuram Rajan stating that Indian economic recovery is still uneven, although he has exuded optimism that the country will be 'solidly' in the 5 percent growth bracket during the course of this fiscal and accelerate further in the next financial year.

On the global front, the US markets slumped again in the last session, extending the recent sell-off, with the Dow falling to its lowest levels in six months, lacking any major US economic data. The Asian stocks rebounded and were trading mostly in the green after the recent correction with the exception of Japanese shares which dropped to two-month lows on global growth concerns.

Back home, sentiments remained dampened on report that foreign investors were net sellers in equities to the tune of Rs 671 crore on October 13, 2014. On the sectoral front, banking, capital goods and consumer durables witnessed the maximum gain in trade, while realty, metal and software remained the top losers on the BSE sectoral space. The broader indices, however, outperforming benchmarks, while the market breadth on the BSE was positive; there were 1108 shares on the gaining side against 662 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex opened at 26537.42; around 153 points higher as compared to its previous closing of 26384.07, and has touched a high and a low of 26550.79 and 26325.39 respectively. The BSE Sensex is currently trading at 26381.93, down by 2.14 points or 0.01%. There were 16 stocks advancing against 14 stocks declining on the index.

The overall market breadth remained in the favour of advances with 60.05% stocks advancing against 36.04% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.55%, while Small cap index up by 0.64%.

The gaining sectoral indices on the BSE were Bankex up by 0.57%, Capital Goods up by 0.56%, Consumer Durables up by 0.48%, Infrastructure up by 0.43% and Power up by 0.33% while, Realty down by 6.35%, Metal down by 0.75%, IT down by 0.72%, FMCG down by 0.42% and TECK down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 3.14%, BHEL up by 1.81%, Bharti Airtel up by 1.58%, Axis Bank up by 1.57% and SBI up by 1.52%. On the flip side, Tata Steel down by 1.73%, ITC down by 1.08%, Sesa Sterlite down by 1.06%, TCS down by 0.97% and Hindalco down by 0.89% were the top losers.

Meanwhile, with an aim to enhance foreign investments and boost domestic manufacturing, the Government is likely to relax the foreign direct investment (FDI) policy for the cash-starved medical devices sector. An inter-ministerial panel includes members from ministries such as Commerce and Industry Ministry, Finance Ministry, the Health and Family Welfare Ministry and the Department of Pharmaceuticals are discussing views on the issue of FDI in medical devices sector.  

FDI in medical devices sector is permitted through government-approval route, however the industry has been demanding that FDI should be put under the automatic route. India badly needs foreign investments in medical devices and equipment sector. 

Industry is of the view that the domestic companies are not competitive as global firms and not big like drug firms and thus there is no threat of mergers and acquisitions from multi-national firms.

Medical devices include wide range of products such as implants sutures and surgical instruments. The present market size of the industry stands at around $7 billion. As per estimates, India imports about 70 percent of its requirement of medical devices. The industry size is about $7 billion in the country.

The CNX Nifty opened at 7,923.25; around 39 points higher as compared to its previous closing of 7,884.25, and has touched a high and a low of 7,928.00 and 7,861.20 respectively.

The CNX Nifty is currently trading at 7878.50, down by 5.75 points or 0.07%. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 3.19%, Indusind Bank up by 2.52%, BHEL up by 1.74%, Bharti Airtel up by 1.56% and SBI up by 1.45%. On the flip side, DLF down by 22.60%, Jindal Steel & Power down by 1.73%, Tata Steel down by 1.58%, Cairn India down by 1.57% and NMDC down by 1.25% were the top losers.

Asian markets trade mostly in the green; Hang Seng surged 151.28 points or 0.65% to 23,294.66, KOSPI Index increased by 6.82 points or 0.35% to 1,934.03, Straits Times spurted by 6.87 points or 0.21% to 3,209.02, Jakarta Composite added 14.36 points or 0.29% to 4,927.42, Shanghai Composite gained 2.79 points or 0.12% to 2,368.80, FTSE Bursa Malaysia KLCI improved 1.00 points or 0.06% to 1,798.20 and Taiwan Weighted was up by 24.01 points or 0.28% to 8,735.40.

On the flip side, Nikkei 225 was down by 280.25 points or 1.83% to 15,020.30.