Benchmarks trade higher in early deals on Wednesday

Indian equity benchmarks are trading higher in early deals on Wednesday as sentiments remained up-beat on World Bank’s report, which recently ranked India 142nd in its ease of doing business list, said the ranking will improve by at least 50 notches if one includes the best practices followed at the state level. However, up-side remained capped as investors remained cautious on the National Council of Applied Economic Research’s (NCAER) latest projection, where it has lowered India’s GDP growth forecast to 5 percent in the current financial year on weak economical fundamentals and uncertainties in growth prospects.

On the global front, the US markets continued their consolidation mood and made a mixed closing in last session, amid uncertainty about the outcome of midterm elections and weighed down by sharp drop in the crude prices. The Asian markets were trading mostly in the green at this point of time after a weak start. Though, Shanghai market was trading lower after China’s Services Purchasing Managers Index fell to 52.9 from 53.5 in September.

Back home, stock feeds on the National Stock Exchange (NSE) suffered around 15-minute hit on Wednesday when trading resumed after a day’s holiday on 4 November on account of Moharrum. On the sectoral front, banking, consumer durables and fast moving consumer goods witnessed the maximum gain in trade, while metal, infrastructure and technology remained the top losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was negative; there were 1348 shares on the gaining side against 692 shares on the losing side while 83 shares remain unchanged.

The BSE Sensex opened at 27907.19; around 42 points higher as compared to its previous closing of 27865.83, and has touched a high and a low of 28006.60 and 27888.27 respectively. The BSE Sensex is currently trading at 27935.56, up by 75.18 points or 0.27%. There were 18 stocks advancing against 12 stocks declining on the index.

The overall market breadth remained in the favour of advances with 63.50% stocks advancing against 32.60% declines. The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index up by 0.65%.

The gaining sectoral indices on the BSE were Bankex up by 0.86%, Consumer Durables up by 0.71%, FMCG up by 0.65%, Healthcare up by 0.60% and Realty up by 0.50%, while Metal down by 1.64%, Infrastructure down by 0.15% and TECK down by 0.05%, were the few losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 1.64%, SBI up by 1.31%, Axis Bank up by 1.06%, HDFC Bank up by 1.04% and Bajaj Auto up by 1.01%. On the flip side, Sesa Sterlite down by 2.43%, Coal India down by 2.11%, Bharti Airtel down by 1.74%, Tata Steel down by 1.49% and Hindalco down by 1.47% 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 opened at 8,351.25; around 27 points higher as compared to its previous closing of 8,324.15, and has touched a high and a low of 8,363.95 and 8,326.10 respectively.

The CNX Nifty is currently trading at 8,339.65, up by 15.50 points or 0.19%. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.79%, Sun Pharma up by 1.51%, SBI up by 1.14%, Asian Paints up by 1.12% and Kotak Bank up by 1.09%. On the flip side, Cairn down by 3.63%, SSLT down by 2.99%, Coal India down by 2.06%, Jindal Steel down by 1.70% and Bharti Airtel down by 1.60% were the top losers.

Asian markets were trading mostly in the green; Nikkei 225 soared 16.76 points or 0.10% to 16,879.23, Hang Seng increased by 296.02 points or 1.25% to 23,998.06, KOSPI Index improved 0.38 points or 0.02% to 1,935.57, Straits Times surged by 2.81 points or 0.09% to 3,284.38 and Jakarta Composite was up by 6.24 points or 0.12% to 5,077.18.

On the flip side, Shanghai Composite declined by 11.83 points or 0.49% to 2,418.84, FTSE Bursa Malaysia KLCI dipped 6.25 points or 0.34% to 1,841.11 and Taiwan Weighted was down by 27.44 points or 0.31% to 8,961.74.