Benchmarks continue weak trade; Consumer Durables, Auto drag

Indian equity markets continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were on pessimistic note as India’s fiscal deficit reached nearly 83% of its full-year target in the first half of the year and core sector growth slowed down to 1.9% in September. Traders were seen piling positions in Realty, Bankex and Capital Goods sector while selling was witnessed in Consumer Durables, Auto and FMCG sector stocks. Stocks of automobile companies were witnessing profit booking as sales in the festival season failed to live up to the street expectations. In scrip specific development, JK Cement was trading in green on back of strong September quarter results. Shares of aviation companies Jet Airways and SpiceJet were trading firm on cut in aviation turbine fuel, the fourth straight reduction in prices since August on back of falling international oil rates.

On the global front, the Asian markets were trading mostly in red while the European markets were trading mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,350 and 27,900 levels respectively. The market breadth on BSE was positive in the ratio of 1676:1158 while 103 scrips remained unchanged.

The BSE Sensex is currently trading at 27809.45, down by 56.38 points or 0.20% after trading in a range of 27789.40 and 27969.82. There were 9 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.96%, while Small cap index up by 1.14%.

The gaining sectoral indices on the BSE were Realty up by 3.40%, Bankex up by 0.52%, Capital Goods up by 0.16%, TECK up by 0.12%, Power up by 0.09% while, Consumer Durables down by 1.61%, Auto down by 1.05%, FMCG down by 0.40%, PSU down by 0.15%, Oil & Gas down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 2.13%, Axis Bank up by 1.49%, ICICI Bank up by 1.11%, SBI up by 0.93% and Dr. Reddy’s Lab up by 0.78%. On the flip side, Gail India down by 5.72%, Mahindra & Mahindra down by 3.04%, Coal India down by 2.34%, NTPC down by 1.47% and Hero MotoCorp down by 1.29% were the top losers.

Meanwhile, in an encouraging development, business conditions in the Indian manufacturing sector continued to grow at a modest pace in October as robust demand, both domestically as well as internationally, led manufacturers to raise prices of their products. The HSBC India Purchasing Managers' Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, rebounded from September's nine-month low of 51.0 to 51.6 in October. The latest reading was consistent with a moderate improvement in business conditions during the month as a figure above 50 indicates that the sector is expanding, while a figure below that level means contraction.

Notably, production at Indian manufacturers rose for the twelfth successive month in October. Moreover, the pace of output growth accelerated from the prior month and was solid overall. Indicative of strong demand, the new orders sub-index rose to 53.0 from September's 51.3 on robust overseas demand that helped push output higher and prompted manufacturers to add jobs for the first time since June. In addition, export orders received by Indian manufacturers rose in October, extending the current sequence of growth to 13 months. The rate of expansion accelerated to the most, marked in four months and was robust overall. Growth of new business was broad-based by sector, with the strongest rise recorded in intermediate goods.

Further, the improvement in activity allowed companies to increase prices charged slightly, even as the cost of raw materials rose at their slowest pace in 17 months. However, these companies refrained from aggressive inventory accumulation. With this, HSBC expects the trend of output price hike to strengthen with growth, which in turn may prompt the Reserve Bank of India (RBI) to keep monetary policy restrictive in the near term. In the September policy review, Reserve Bank Governor Raghuram Rajan kept all key rates unchanged citing continued risks to inflation and difficult external situation, especially on the geopolitical front.

The CNX Nifty is currently trading at 8305.85, down by 16.35 points or 0.20% after trading in a range of 8297.70 and 8350.60. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 4.79%, Tech Mahindra up by 2.85%, DLF up by 2.24%, Sesa Sterlite up by 2.21% and Cairn India up by 2.05%. On the flip side, Gail India down by 5.73%, Mahindra & Mahindra down by 3.42%, Coal India down by 2.85%, NMDC down by 2.31% and HCL Tech. down by 2.06% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 82.09 points or 0.34% to 23,915.97, Jakarta Composite decreased 20.86 points or 0.41% to 5,068.68, KOSPI Index decreased 11.46 points or 0.58% to 1,952.97 and FTSE Bursa Malaysia KLCI decreased 5.29 points or 0.29% to 1,849.86.

On the other hand; Shanghai Composite increased 9.85 points or 0.41% to 2,430.03, Straits Times increased 11.84 points or 0.36% to 3,286.09 and Taiwan Weighted increased 30.1 points or 0.34% to 9,004.86. The Japanese market remained shut for the trade today for Culture Day holiday.

The European markets were trading mostly in red; France’s CAC decreased 2.34 points or 0.06% to 4,230.75 and UK’s FTSE 100 decreased 1.12 points or 0.02% to 6,545.35 while, Germany’s DAX increased 1.86 points or 0.02% to 9,328.73.