Benchmarks witness consolidation on Friday

Indian equity benchmarks made a flat close on the last day of holiday truncated week, with a negative bias as investors opted to book some profits after recent rallies. Market-participants also remained on sidelines ahead of portfolio rejig, which is likely to take place over the weekend. As per reports, at least a dozen new ministers are set to be inducted by Narendra Modi’s government as part of the cabinet expansion that is likely to take place on Sunday, November 9, 2014.

Sentiments also remained dampened as the Paris-based think tank OECD, revising its forecast downwards, projected 5.4 per cent growth for the Indian economy this year, as global recovery continues at a moderate pace. Earlier in September, it had projected 5.7 per cent growth rate for India. However, downside remained capped on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 1030.85 crore on November 5, 2014.

On the global front, European markets were trading higher on hopes that the European Central Bank may announce monetary easing measures to boost growth in the euro zone. However, Asian markets ended mostly in the red ahead of US employment data later today. Meanwhile, Chinese shares pared early gains and ended with marginal losses.

Back home, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 61.62 per dollar at the time of equity markets closing compared with its previous close of 61.41. Meanwhile, metal shares edged lower after the services purchasing managers’ index (PMI) compiled by HSBC/Markit came lower at 52.9 in October, the weakest reading since July, from 53.5 in September. Moreover, banking stocks too lost sheen after global credit rating agency Moody’s said that the asset quality of state-owned banks will continue to be burdened by weak financial health of Indian corporate. Additionally, stocks related to infrastructure space witnessed profit booking after a smart rally on the back of government relaxed foreign direct investment (FDI) rules in the construction sector by reducing minimum built up area as well as capital requirement and easing exit norms.

On the flip side, Pharma stocks edged higher on weak rupee, with Dr Reddy’s Laboratories hitting record high. Besides, shares of public sector oil marketing companies (OMCs) remained on buyers’ radar tailing fall in crude oil prices. BPCL, HPCL and IOC all edged higher after brent crude dropped for the second straight session on Friday, dragged below $83 by worries over the strong US dollar. Lower crude oil prices will reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices.

The NSE’s 50-share broadly followed index Nifty ended marginally in the red but held its psychological 8,300 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex edged lower by around fifty points to end below the psychological 27,900 mark. The broader markets struggled to get any traction and ended the session mixed. The market breadth remained in favour of decliners, as there were 1436 shares on the gaining side against 1569 shares on the losing side while 107 shares remain unchanged.

Finally, the BSE Sensex lost 47.25 points or 0.17%, to 27,868.63, while the CNX Nifty slipped 1.30 points or 0.02% to 8,337.00.

The BSE Sensex touched a high and a low of 27980.93 and 27739.56, respectively. The BSE Mid cap index was up by 0.35%, while the Small cap index was down by 0.39%.

The top gainers on the Sensex were Dr. Reddys Lab up by 4.51%, Sun Pharma up by 2.53%, Axis Bank up by 2.44%, Hindustan Unilever up by 1.84% and ONGC up by 1.44%. On the flip side, BHEL down by 3.21%, GAIL India down by 2.46%, Sesa Sterlite down by 2.09%, Hero MotoCorp down by 1.99% and HDFC Bank down by 1.51% were the top losers in the index.

On the BSE Sectoral front Realty up by 2.43%, FMCG up by 2.28%, TECK up by 0.49%, Consumer Durables up by 0.35% and IT up by 0.21%, while Metal down by 1.27%, Capital Goods down by 0.72%, Power down by 0.65%, Auto down by 0.46% and PSU down by 0.11%were the top losers in the space.

Meanwhile, assuring a transparent and rule-based policy environment, Finance Minister Arun Jaitley promised reforms in labour, land acquisition and insurance laws to make regulations in India more business-friendly. Terming reforms as a long journey, Finance Minister added that the government is of the view of consistently pursuing the reforms agenda to boost the economic growth rather than taking one or two big bang steps.

By adding further, Arun Jaitley said that the government has introduced some labour reforms in Parliament which will be discussed in the upcoming winter session. The government is looking at changing some illogical provisions of land acquisition laws that have made it virtually impossible for companies to acquire land for industrial projects. On insurance sector, Jaitley expressed hope that the long-pending Insurance Amendment Bill, that seeks to raise FDI in the sector from existing 26 percent to 49 percent, will get Parliament nod in the upcoming Winter Session.

Finance Minister also stressed that the government may privatize some loss making public sector units (PSUs). India has 79 loss making PSUs, of which 49 are sick enterprises. On ambitious divestment programme, Jaitley said the government would push ahead with divestment of its stake in state-owned firms but will retain majority stake in such companies.

The CNX Nifty touched a high and low of 8,360.35 and 8,290.25 respectively.

The top gainers on Nifty were DLF up by 6.11%, Zee Entertainment up by 4.79%, Dr. Reddys Lab up by 4.46%, Lupin up by 2.75% and Sun Pharma up by 2.62%. On the flip side, BHEL down by 3.47%, GAIL India down by 2.56%, Hero MotoCorp down by 2.55%, Sesa Sterlite down by 1.89% and Asian Paints down by 1.70% were the top losers.

European markets were trading mostly in the green, United Kingdom’s FTSE 100 was up by 0.77% and Germany’s DAX was up by 0.29%, however France’s CAC 40 was down by 0.08%.

Asian markets ended mostly in red on Friday, with Chinese stocks closing in red before the release of trade data scheduled for tomorrow. Meanwhile, China’s central bank has published details on its latest tool to provide liquidity as banks see a rate cut as unlikely. The People’s Bank of China confirmed it pumped 769.5 billion yuan ($126 billion) into the country’s lenders in the last two months through a newly-created medium-term lending facility. The PBOC injected 500 billion yuan in September and another 269.5 billion yuan in October via the facility -- all termed at three months with an interest rate of 3.5%. On the other hand the Nikkei posted over half a percent of gains with Japanese companies heading towards their highest profits ever, as the falling yen boosts exporters. As the earnings season winds down in Japan -- almost all companies will have reported results by next week -- exporters are emerging as one of the biggest beneficiaries of Prime Minister Shinzo Abe’s economic policies. Taiwanese Trade Balance rose to a seasonally adjusted annual rate of 4.62B, from 3.50B in the preceding month.