Benchmarks continue firm trade; Bankex, Realty lead

Indian equity markets continued their trade in green in the late afternoon session on account of buying in frontline blue chip counters. The sentiments got some support after Finance Minister Arun Jaitley committing to more reforms and eliminating corruption, stated that steps taken by the new government were aimed at creating fair and transparent business environment and ending crony capitalism. Traders were seen piling positions in Bankex, Realty and Capital Goods sector while selling was witnessed in Metal, Power and Oil & Gas sector stocks. In scrip specific development, Unitech was trading in green on expectations of Canada-based global giant Brookfield buying 40% of the company’s stake in four SEZs. Hexaware Technologies was trading firm after its consolidated net profit rose 12.3% to Rs 86 crore on 9.9% growth in revenue to Rs 671 crore in Q3 September 2014 over Q2 June 2014. Indian Overseas Bank was trading in red after Standard & Poor’s cut its ratings. The global rating agency has lowered credit rating of the bank to BB+, indicating speculative grade following deterioration in the lender’s asset quality. The stock market will remain close tomorrow i.e. November 06, 2014, on account of Gurunanak Jayanti.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,300 and 27,800 levels respectively. The market breadth on BSE was positive in the ratio of 1599:1267 while 114 scrips remained unchanged.

The BSE Sensex is currently trading at 27897.91, up by 37.53 points or 0.13% after trading in a range of 27857.65 and 28006.60. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.51%, while Small cap index up by 0.87%.

The gaining sectoral indices on the BSE were Bankex up by 1.29%, Realty up by 0.55%, Capital Goods up by 0.35%, FMCG up by 0.22%, Auto up by 0.13% while, Metal down by 2.83%, Power down by 0.87%, Oil & Gas down by 0.62%, Infra down by 0.53%, PSU down by 0.49% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.49%, Axis Bank up by 2.23%, SBI up by 2.14%, ICICI Bank up by 1.52% and Dr. Reddy’s Lab up by 1.48%. On the flip side, Coal India down by 4.14%, Sesa Sterlite down by 3.33%, Bharti Airtel down by 3.06%, Hindalco down by 2.97% and Tata Power down by 2.41% were the top losers.

Meanwhile, the existing foreign trade policy is likely to continue till the end of this year as the Directorate General of Foreign Trade (DGFT) has floated an internal proposal for extending the current FTP provisions till December 31. Now, the Government is examining the option to address uncertainties faced by exporters due to delay in the new policy. 

The FTP includes both an annual plan and a five-year long-term policy. Though FTPs are usually announced soon after the Union Budget is presented, the new Government, which came in power in May, has not yet been able to do so. Heavy work agenda of Commerce Ministry and elections in a number of States have resulted in the delay to present new FTP. The delay in new FTP has started impacting domestic exports as exporters are unsure about the continuity of the existing export incentive schemes, like the focus product and focus market schemes, which give them a competitive edge in the global market. After recording a double-digit growth in May and June, export growth slowed down in subsequent months with a growth rate of just 2.73 percent in September.

Although most of the existing incentive schemes will continue till a new policy is announced. Therefore, a formal extension of the schemes is required to provide confidence to exporters that the schemes will not change before the given date.

The CNX Nifty is currently trading at 8334.15, up by 10.00 points or 0.12% after trading in a range of 8323.50 and 8363.95. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 2.46%, BPCL up by 2.38%, Axis Bank up by 2.17%, SBI up by 2.08% and Lupin up by 2.02%. On the flip side, Cairn India down by 4.40%, NMDC down by 4.10%, Sesa Sterlite down by 3.98%, Coal India down by 3.81% and Jindal Steel & Power down by 3.44% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 150.04 points or 0.63% to 23,695.62, Taiwan Weighted decreased 26.58 points or 0.3% to 8,962.60, Jakarta Composite decreased 15.52 points or 0.31% to 5,055.42, Shanghai Composite decreased 11.42 points or 0.47% to 2,419.25, FTSE Bursa Malaysia KLCI decreased 6.97 points or 0.38% to 1,840.39 and KOSPI Index decreased 3.76 points or 0.19% to 1,931.43.

On the other hand, Straits Times increased 6 points or 0.18% to 3,287.57 and Nikkei 225 increased 74.85 points or 0.44% to 16,937.32.

The European markets were trading in green; UK’s FTSE 100 increased 28.87 points or 0.45% to 6,482.84, France’s CAC increased 25.37 points or 0.61% to 4,155.56 and Germany’s DAX increased 81.02 points or 0.88% to 9,247.49.