Markets cut back substantial losses after the release of five year low September WPI data

Markets have trimmed most of their losses thanks to positive macro-economic data, though negative start of European counterparts continues to weigh negatively on the sentiment. Markets erased most of their losses after India's main inflation gauge, based on monthly WPI, easing at 33 month low, stood at 2.78% for the month of September as compared to 3.74% in the previous month and 7.05% during the corresponding month of the previous year. This data was in addition to all time low September Retail Inflation released late on Friday evening. Off day’s low, both Sensex and Nifty were trading above psychologically crucial 26,350 and 7,850 with losses of little over a one tenth of a percent. However, broader indices outperforming larger counterparts were trading with gains in the range of 0.25%-0.35%.

On the global front, European shares fell early on Tuesday, tracking sharp losses on Wall Street and resuming their three-week sell-off, dragged by mounting concerns over the strength of the global economy. Meanwhile, Asian pacific shares were trading mixed at this point of time, with Chinese stocks trading lower despite stronger-than-expected September trade figures released on Monday.

Closer home, most of the sectoral indices on BSE were holding into positive territory, nevertheless prominent gainers were the stocks from Power, Banking and Infrastructure counters. On the flip side, worst hit was taken Realty space, followed by stocks belonging from Metal and Information Technology counters. Additionally, Auto stocks also ran out of steam after latest data released by the Society of Indian Automobile Manufacturers (SIAM), passenger car sales declined to 1,54,882 units in September from 1,56,494 units in September 2013. Meanwhile, metal stocks too slumped in trade on concerns over the health of global economies. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1112:878; while 19 shares remained unchanged.

The BSE Sensex is currently trading at 26358.21, down by 25.86 points or 0.10% after trading in a range of 26212.01 and 26550.79. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.32%, while Small cap index up by 0.26%.

The gaining sectoral indices on the BSE were Power up by 0.84%, Bankex up by 0.67%, INFRA up by 0.54%, PSU up by 0.39% and Capital Goods up by 0.35% while, Realty down by 7.74%, Metal down by 0.97%, IT down by 0.61%, FMCG down by 0.55% and TECK down by 0.36% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.62%, Axis Bank up by 2.73%, Tata Power up by 2.23%, Bajaj Auto up by 2.08% and SBI up by 1.92%. On the flip side, Sesa Sterlite down by 3.34%, ITC down by 1.44%, Tata Motors down by 1.28%, HDFC down by 1.25% and HDFC Bank down by 0.98% were the top losers.

Meanwhile, domestic passenger car sales declined by 1.03 per cent to 1,54,882 units in September from year-ago month. After posting four months of consecutive growth, car sales declined as customers postponed purchases during the month on account of festival season beginning in October amid expectation of better purchase offers.

According to the latest data released by the Society of Indian Automobile Manufacturers (SIAM), passenger car sales declined to 1,54,882 units in September from 1,56,494 units in September 2013. Motorcycle sales last month climbed 19.34 per cent to 10,56,509 units from 8,85,309 units a year earlier. The total two-wheeler sales in September rose 23.81 per cent to 15,67,351 units . Commercial Vehicles sales have turned positive after 16 months of decline and rose by 8.59 per cent to 56,140 units in September as fleet owners have started buying trucks anticipating improved economic activity. Total sales of vehicles across categories registered an increase of 20.44 per cent to 19,04,007 units in reported month from 15,80,933 units in September 2013.

The SIAM Director General Vishnu Mathur has stated that car sales are expected to grow in October mainly on the back of festival season. However, the probability of interest rate increase by the Reserve Bank of India in the rest of the ongoing financial year, is a challenge for the auto industry. By adding further, V Mathur has said that rural incomes across the country could fall in the remainder of the ongoing financial year, due to poor output from kharif crop which could be the another challenge for the local automobile industry.

The CNX Nifty is currently trading at 7869.80, down by 14.45 points or 0.18% after trading in a range of 7825.45 and 7928.00. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.74%, Axis Bank up by 2.61%, Indusind Bank up by 2.52%, Tata Power up by 2.47% and Bajaj Auto up by 2.13%. On the flip side, DLF down by 25.90%, Sesa Sterlite down by 3.14%, Jindal Steel & Power down by 2.67%, Cairn India down by 1.98% and BPCL down by 1.83% were the top losers.

Asian markets were trading mostly higher; with KOSPI Index gaining by 2.04 points or 0.11% to 1,929.25; FTSE Bursa Malaysia KLCI rising by 3.44 points or 0.19% to 1,800.64; Jakarta Composite advancing by 15.14 points or 0.31% to 4,928.19 and Taiwan Weighted edging higher by 57 points or 0.65% to 8,768.39. On the flip side, Nikkei 225 down by 364.04 points or 2.38% to 14,936.51; Hang Seng declined by 9.51 points or 0.04% to 23,133.87 and  Shanghai Composite shed 6.53 points or 0.28% to 2,359.48