Markets trade in red amid profit booking

Indian equity benchmarks were trading in red on account of profit booking in frontline blue chip stocks after recent rally as investors turned cautious due to the poor macro-economic data. Though most of the major indices were trading in green, sharp selling witnessed in auto, consumer durables and FMCG stocks dragged the major indices down. Sentiment got a hit as core sector output in the month of September slowed down to 1.9% as compared to 5.8% in August, lowest in eight months. Furthermore, India’s fiscal deficit widened to 82.6% to cross Rs 4.38 lakh crore during April-September this fiscal as against Rs 5.31 trillion Budget Estimates for 2014-15. Auto was the top losing index as vehicle sales during the month of October fell despite of the festive season. However, shares of airline companies surged as state-run oil marketing companies slashed jet fuel prices. Fuel charges contribute to nearly one-third of an airline's operational expenses. Broader indices outperformed the major indices with high margin as both mid cap and small cap indices were trading up by over 0.70%.

Apollo Tyres has moved higher by around 5% to Rs 229 after the company said that the Delaware Court in the US has ruled in favour of Apollo's motion for Entry of a Declaratory Judgment. JK Cement has rallied about 7% to Rs 643 after reporting a net profit of Rs 32.32 crore in Q2FY15 on back of improved volume and better realization.

On global front, Asian markets were trading mixed with Taiwan Weighted up by 0.34% and Hang Seng down 0.34%. Global investors, sentiments were dampened by an unexpected dip in China's factory activity to a five-month low in October, underlining the uncertain outlook for world's second biggest economy. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was positive, out of 2,615 stocks traded, 1,506 stocks advanced, while 995 stocks declined on the BSE.

The BSE Sensex is currently trading at 27831.76, down by 34.07 points or 0.12% after trading in a range of 27789.40 and 27969.82. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.78%, while Small cap index up by 0.98%.

The gaining sectoral indices on the BSE were Realty up by 1.41%, Capital Goods up by 0.70%, Metal up by 0.49%, INFRA up by 0.26%, TECK up by 0.21%. On the other hand, Auto down by 1.09%, Consumer Durables down by 1.01% and FMCG down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 1.58%, Hindalco up by 1.23%, SBI up by 1.02%, Larsen & Toubro up by 0.86% and Axis Bank up by 0.85%. On the flip side, GAIL India down by 4.31%, Mahindra & Mahindra down by 2.95%, Bajaj Auto down by 1.48%, Hero MotoCorp down by 1.47% and Maruti Suzuki down by 1.33% were the top losers.

Meanwhile, in a big sign of disappointment to Indian government, India’s fiscal deficit widened to 82.6% to cross Rs 4.38 lakh crore during April-September this fiscal as against Rs 5.31 trillion Budget Estimates for 2014-15. In the corresponding year-ago period, fiscal deficit was 76% of the budget estimate.

During the first half of current fiscal, total expenditure increased to Rs 8.62 lakh crore or 48%  of the budget estimates (BE), while, revenue receipts lagged 35% to Rs 4.17 lakh crore, mainly due to slowing tax collections. Of the total expenditure, plan spending was at over Rs. 2.46 lakh crore. Under non-plan head, it was Rs.6.15 lakh crore. Net tax receipts in the first six months of current fiscal stood at Rs. 3.23 lakh crore, or 33.1% of BE. Weak manufacturing activity has led to a contraction in excise duty collections and corporate tax collections also remained below expectation due to the poor corporate profits. The fiscal deficit was recorded at around Rs 5.08 lakh crore or 4.5% of GDP in FY14 as against 4.9 % in FY13.

With an aim to trim the fiscal deficit to 4.1% of gross domestic product (GDP) in FY15, the government has recently issued new austerity measures including 10% cut in non-Plan expenditure and ban on creation of new posts. The government also decided to barred senior officials from first-class air travel, foreign jaunts, holding meetings in five-star hotels and purchase of new cars. On positive side, the government will have to provide lower fuel subsidy due to the deregulation of diesel and declining crude oil prices in the international market. Further, government also has a cushion of lower spending on food subsidy because the food security law is not likely to be rolled out by many states this year. The government has already set aside Rs 1.15 lakh crore for food subsidy this year.

The CNX Nifty is currently trading at 8310.65, down by 11.55 points or 0.14% after trading in a range of 8297.70 and 8350.60. There were 21 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 4.23%, Zee Entertainment up by 2.51%, PNB up by 1.95%, Bank Of Baroda up by 1.78% and Tech Mahindra up by 1.64%. On the flip side, GAIL India down by 4.27%, Mahindra & Mahindra down by 3.16%, Bajaj Auto down by 1.49%, Indusind Bank down by 1.47% and Kotak Mahindra Bank down by 1.42% were the top losers.

Asian markets were trading mixed, Straits Times up by8.48 points or 0.26% to 3,282.73, Shanghai Composite up by12.35 points or 0.51% to 2,432.53, Taiwan Weighted up by30.1 points or 0.34% to 9,004.86. While, Hang Seng down 80.67 points or 0.34% to 23,917.39,  Jakarta Composite down 12.29 points or 0.24% to 5,077.26, KOSPI Index down 11.46 points or 0.58% to 1,952.97, FTSE Bursa Malaysia KLCI down 1.95 points or 0.11% to 1,853.20.