Benchmarks trade slightly in the green in early deals

Indian equity benchmarks have made a flat-to-positive start and are trading slightly in the green in early deals on Friday. Traders were drawing some comfort from Reserve Bank of India Governor Raghuram Rajan’s statement that India is seeing a pick-up in economic growth although more could be done to support that on a sustainable basis, while noting inflation was also easing. He has also said that a growth of 7 percent is possible in short-term but major reforms will be needed to take it to higher levels. However, gains remained capped as sell off by FIIs was massive who offloaded Indian shares worth Rs 1,128 crore on October 16, 2014. Selling in software and technology counters too dampened the sentiments after TCS fell over 7%, posting 13.6% annual net profit growth in the July-September quarter, which is slightly below the street expectation.

The US markets ended almost flat in last session, recovering from their early declines after reports showed an unexpected drop in initial jobless claims and a bigger than expected increase in industrial production. The Asian markets were still showing mixed trend with many of the indices trading in red despite a Fed official saying that the central bank should consider delaying the end of bond purchases.

Back home, on the sectoral front, fast moving consumer goods, capital goods and banking witnessed the maximum gain in trade, while software, technology and metal remained the top losers on the BSE sectoral space. The broader indices too were struggling to get any traction, while the market breadth on the BSE was positive; there were 980 shares on the gaining side against 853 shares on the losing side while 76 shares remain unchanged.

The BSE Sensex opened at 25950.00; around 49 points lower as compared to its previous closing of 25999.34, and has touched a high and a low of 26085.16 and 25917.58 respectively. The BSE Sensex is currently trading at 26009.75, up by 10.41 points or 0.04%. There were 21 stocks advancing against 9 stocks declining on the index.

The overall market breadth remained in the favour of advances with 51.34% stocks advancing against 44.68% declines. The broader indices were trading in red; the BSE Mid cap index was down by 0.02%, while Small cap index down by 0.02%.

The gaining sectoral indices on the BSE were FMCG up by 1.10%, Capital Goods up by 1.00%, Bankex up by 0.76%, Consumer Durables up by 0.69% and Power up by 0.68% while, IT down by 3.00%, TECK down by 2.07%, Metal down by 0.65% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.58%, BHEL up by 2.05%, Bharti Airtel up by 1.69%, Dr. Reddys Lab up by 1.39% and ITC up by 1.38%. On the flip side, TCS down by 7.05%, Sesa Sterlite down by 2.13%, Tata Motors down by 1.98%, Hindalco down by 1.64% and Wipro down by 0.87% were the top losers.

Meanwhile, amid falling global crude oil prices, Finance Secretary Arvind Mayaram has asserted that declining crude oil price will have favourable implications for the country. However, there is no need to be over optimistic as winter demand and global economic uncertainty would put upward pressure on oil prices in coming future, Finance Secretary added.

Benchmark Brent crude has fallen to almost four-year low at around $82 per barrel on account of oversupply and low demand from major economies mainly China and the US. With international oil prices dropping to multi-year lows, government's oil subsidy bill is likely to be slashed by over 60 percent in the current fiscal which in turn will help bridging the fiscal deficit.

The government currently controls diesel, domestic LPG and kerosene and prices them at rates below cost. Under-recovery or revenue loss arising out of selling diesel, domestic cooking gas (LPG) and kerosene at prices lower than imported cost is estimated at Rs 86,080 crore for current fiscal which is lower than Rs 1,39,869 crore gross under-recovery last fiscal.

Diesel prices have been raised by up to 50 paisa a litre every month since January 2013. The hikes together with a sharp drop in global oil prices have helped wipe out the under-recovery or loss on diesel. Presently, oil firms in the country are making Rs 2.25-2.50 a litre profit on diesel, which should have been passed to consumers in form of a price cut but the same has been delayed due to assembly elections in states include Maharashtra and Haryana.

The CNX Nifty opened at 7,733.75; around 15 points lower as compared to its previous closing of 7,748.20, and has touched a high and a low of 7,769.45 and 7,729.65 respectively.

The CNX Nifty is currently trading at 7755.55, up by 7.35 points or 0.09%. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.54%, Zee Entertainment up by 2.51%, BHEL up by 2.09%, Bharti Airtel up by 1.58% and Dr. Reddys Lab up by 1.55%. On the flip side, TCS down by 7.19%, HCL Tech. down by 6.45%, Jindal Steel & Power down by 2.84%, Sesa Sterlite down by 1.97% and Tata Motors down by 1.82% were the top losers.

Asian markets were trading mixed; Hang Seng added 29.08 points or 0.13% to 22,930.02, Straits Times strengthened by 2.90 points or 0.09% to 3,157.11, Jakarta Composite increased by 27.36 points or 0.55% to 4,978.98 and FTSE Bursa Malaysia KLCI was up by 12.31 points or 0.70% to 1,780.08.

On the flip side, Nikkei 225 tumbled by 88.17 points or 0.60% to 14,650.21, KOSPI Index dipped 14.79 points or 0.77% to 1,904.04, Shanghai Composite declined by 25.12 points or 1.07% to 2,331.38 and Taiwan Weighted was down by 69.05 points or 0.80% to 8,564.64.