Markets trade flat with negative bias in range-bound session of trade

In the range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were trading flat with bit of negative bias as investors and foreign funds were adopting a cautious approach, amid concerns over a weak trend at other Asian markets in line with overnight losses in European and the US markets due to worries over the global economy. Besides, a widening trade deficit to 18-month high in September also influenced market sentiments. India’s trade deficit widened to more than double at $14.25 billion in month of September as compared to $6.12 billion in the same month previous year as exports grew marginally and imports continued to expand at higher pace However, losses remained capped as Indirect tax collections grew by 5.8 percent to Rs 2.42 lakh crore during April-September period of current fiscal as compared to Rs 2.29 lakh crore during the same period of previous financial year. Meanwhile, some investors remained on the sidelines and refrained from any buying activity ahead of Maharashtra and Haryana assembly elections results.

On the sectoral front, stocks from Realty, FMCG and information technology (IT) counters were supporting the markets’ uptrend, while those from Consumer Durables, Power and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, Tata Steel gained on the back of reports that the company signed a memorandum of understanding with the Geneva-based Klesch group for the potential sale of its long products business in Europe and associated distribution activities. on the other hand, shares of NIIT Technologies have slipped after the company reported a 36% drop in its net profit for the second quarter ended September 30, 2014 at Rs 40.1 crore.

On global front, Asian markets were trading on a weak note as concerns over global growth outlook refused to fade. Furthermore, stocks on Wall Street ended lower as participants continued to trim positions on rising worries that global growth concerns could hurt earnings of US companies. Back home, Indian rupee lost 15 paise to 61.56 against the US dollar in early trade due to increased demand for the US currency from importers amidst capital outflows.

The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 917 shares on the gaining side against 1199 shares on the losing side while 93 shares remain unchanged.

The BSE Sensex is currently trading at 26340.64 down by 8.69 points or 0.03% after trading in a range of 26462.08 and 26248.47. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.28%, while Small cap index was down by 0.34%.

The gaining sectoral indices on the BSE were Realty up by 1.32%, FMCG up by 0.40%, IT up by 0.29%, TECK up by 0.12% and Auto up by 0.12%, while Consumer Durables down by 0.97%, Power down by 0.96%, Capital Goods down by 0.77%, Metal down by 0.72% and Oil & Gas down by 0.66% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.60%, Tata Motors up by 1.29%, GAIL India up by 1.26%, Hero MotoCorp up by 1.20% and Hindustan Unilever up by 0.70%. On the flip side, Hindalco down by 3.14%, Sesa Sterlite down by 2.42%, Mahindra & Mahindra down by 2.20%, Tata Power down by 2.02% and BHEL down by 1.48% were the top losers.

Meanwhile, Exerting pressure on country’s external sector as well as domestic currency, India’s trade deficit widened to more than double at $14.25 billion in month of September as compared to $6.12 billion in the same month previous year as exports grew marginally and imports continued to expand at higher pace.

India's merchandise exports grew by 2.73% to $28.90 billion in September from $28.13 billion in the same month of previous year. The decline in country’s exports can be mainly attributed to fall in petroleum prices, downturn in major economies in Europe, policy uncertainty and low manufacturing growth in the country. On the other hand, India’s imports during September rose by 25.96% y-o-y to $43.15 billion primarily led by spike in gold imports. Inward shipments of gold rose increased by 450% y-o-y to $3.75 billion during the reported month because of the low base, as imports in September 2013 were low due to restrictions imposed by the Government.

In cumulative terms, during April-September’FY15, the value of India’s overseas shipments increased by 6.47% to $163.7 billion from $153.75 billion in the same period of previous financial year. India’s imports grew by 1.57% to $234.09 billion in April-September’FY15 from $230.47 billion reported in the same period of previous fiscal. India’s trade deficit during the first six months of current fiscal narrowed to $70.40 billion as against $76.72 billion in the same period of previous financial year.

The Foreign Trade Policy (FTP) governs all exports and imports related activities in India. With an aim to enhance the country’s exports and check the widening trade deficit, the government is likely to announce new foreign trade policy in this month. The new five-year foreign trade policy (2014-19) is likely to include incentives for domestic value-added products, new rules for special economic zones (SEZs) and a likely review of free trade agreements (FTAs) that India had signed with various countries and group of nations.

The CNX Nifty is currently trading at 7,856.35 down by 7.65 points or 0.10% after trading in a range of 7,893.90 and 7,836.45. There were 23 stocks advancing against 27 declining on the index.

The top gainers on Nifty were DLF up by 5.62%, NMDC up by 2.01%, TCS up by 1.68%, Hero MotoCorp up by 1.35% and GAIL India up by 1.32%. On the flip side, Hindalco down by 3.15%, Ultratech Cement down by 2.90%, Cairn India down by 2.39%, Sesa Sterlite down by 2.32% and Tata Power down by 2.30% were the top losers.

Asian markets trade mostly in the red; Nikkei 225 tumbled by 2.02%, Hang Seng slipped 0.54%, KOSPI Index declined 0.41%, Straits Times decreased by 1.26%, Jakarta Composite dipped 0.10% and FTSE Bursa Malaysia KLCI contracted by 0.69%. On the flip side, Shanghai Composite was up by 0.55% and Taiwan Weighted was up by 0.02%.