Markets off day’s high; yet hold strong ahead Oct CPI data

Indian equity markets although bit from day’s high, but continued to trade with vigor on sustained buying activities by both funds and retail investors amidst positive global cues. The mood turned upbeat after government's bid to implement the goods & services tax (GST) as early as possible got a significant boost with the empowered committee of state finance ministers endorsing the so-called 'place of supply' rules that form the backbone of the new regime that will replace a plethora of levies, create a common market and likely give GDP growth a lift of up to two percentage points. Off day’s high both Sensex and Nifty were trading below psychologically crucial 28,100 and 8,400 levels respectively, but with gains of around half a percent. Broader indices outperforming larger peers were trading with gains in the range of 0.50%-0.95%.

Notably, the gains of markets came ahead of the release of crucial macro-economic data, i.e. September IIP data and October CPI data, which is scheduled to be released later in the day.  While, the street widely expects consumer price index (CPI) to be at 6.46%, which is another new low for the index since it started in January 2012, it expects industrial output numbers (IIP) to be in the range of 1%-2% against 0.4% In August.

On the global front, Asian stocks rose on Wednesday, led by Tokyo's Nikkei index, which hit a fresh seven-year high as the yen slumped further amid speculation of a snap Japanese election. In the absence of big moves on Wall Street, sentiment was also fuelled by hopes that Japan's government would put off a tax hike.

Closer home, most of the sectoral indices on BSE traded into positive territory, stocks from Auto, banking and Infrastructure counters were the prominent gainers of the session, however, stocks from Power, Metal and Oil & Gas counters were the top losers of the session. In stock specific activity, PSU PMCs stocks were trading higher even as reports suggested that these companies are likely to again reduce petrol and diesel prices by the end of this week tracing the consistent drop in global oil prices before polls in Jharkhand and Jammu & Kashmir. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1529: 1218; while 117 shares remained unchanged.

The BSE Sensex is currently trading at 28047.49, up by 137.43 points or 0.49% after trading in a range of 27958.64 and 28126.48. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.92%, while Small cap index up by 0.55%.

The gaining sectoral indices on the BSE were Auto up by 1.45%, Bankex up by 1.21%, Realty up by 0.58%, INFRA up by 0.56% and FMCG up by 0.51% while, Metal down by 0.28%, Power down by 0.25% nad Oil & Gas down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.49%, Axis Bank up by 2.15%, Tata Motors up by 2.10%, BHEL up by 1.53% and ICICI Bank up by 1.42%. On the flip side, Tata Steel down by 1.06%, NTPC down by 0.89%, Larsen & Toubro down by 0.85%, Tata Power down by 0.80% and Cipla down by 0.80% were the top losers.

Meanwhile, In good news for vehicle owners, state oil firms may yet again reduce petrol and diesel prices by the end of this week tracing the consistent drop in global oil prices before polls in Jharkhand and Jammu & Kashmir. This plan, if materializes would mark seventh reduction in petrol prices since June and third reduction in diesel prices after the fuel was de-regulated on October 18.

For consumers, the two fuels are already 10%-13% cheaper than their highs earlier in the year. However, some reports suggest that the cut could be steeper depending upon further slide in international prices of auto fuels since the government has allowed state fuel retailers to align pump prices of petrol and diesel with international market.

Last time, oil companies reduced petrol prices by Rs 2.41 per litre and diesel by Rs 2.25 on Oct 31. So far, companies have reduced petrol prices by 13% or Rs 9.36 per litre in six consecutive rate reductions, while diesel prices have been cut by about 10% or Rs 5.62 per litre in just two revision since the fuel price was deregulated. Currently, petrol is sold at Rs 64.24 per litre in Delhi and diesel at Rs 53.35 per litre.

However, companies are also expected to marginally reduce revenue losses on cooking gas, where they are losing about Rs 394 per 14.2 kilogram cylinder. In October end, Subsidized cooking gas (LPG) rates were hiked by Rs 3 per cylinder after the government raised the commission paid to dealers. The commission was last revised in December 2013 when it was hiked by Rs 3.46 per cylinder to Rs 40.71.

The CNX Nifty is currently trading at 8394.40, up by 31.75 points or 0.38% after trading in a range of 8377.95 and 8415.05. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.37%, Tata Motors up by 2.17%, Ambuja Cement up by 2.13%, Axis Bank up by 2.11% and IDFC up by 2.06%. On the flip side, Power Grid Corporation down by 2.37%, Tata Steel down by 1.75%, Jindal Steel & Power down by 1.61%, Zee Entertainment down by 1.31% and NMDC down by 1.21% were the top losers.

Asian markets were trading mostly into positive territory; with KOSPI Index gaining by 4.27 points or 0.22% to 1,967.27; Shanghai Composite advancing by 23.02 points or 0.93% to 2,492.69; Jakarta Composite rising by 30.63 points or 0.61% to 5,062.91; Nikkei 225 adding by 72.94 points or 0.43% to 17,197.05; Hang Seng accumulating 151.47 points or 0.64% to 23,959.75. On the flip side, Taiwan Weighted wasd down by 115.19 points or 1.28% to 8,918.95; FTSE Bursa Malaysia KLCI was down by 4.81 points or 0.26% to 1,820.30 and Straits Times was down by 4.44 points or 0.13% to 3,287.71.