Benchmarks continue to trade in red in late morning session

After making a positive start, benchmark equity indices have slipped into negative territory and trading with a slender cut as the losses in Realty, PSU and Infrastructure stocks wiped off the gains in Consumer Durables and Capital Goods shares. The sentiments were dampened after Gold imports by India, the world’s biggest user after China, more than doubled in the third quarter as a decline in prices spurred jewelry demand during festivals. Concerned over the widening trade deficit, Top officials from the Commerce and Finance Ministry as well as Reserve Bank are expected to meet today to take stock of the gold imports and review the 80:20 scheme. Struggling with a high trade deficit, India last year raised its gold import duty to a record 10 percent and made it mandatory to export a fifth of all bullion imports. However, losses remained capped on positive economic data as the country's industrial production grew at 2.5 per cent in September and retail inflation eased to 5.52 per cent in October from 6.46 per cent in September, raising hopes of a rate cut by the Reserve Bank of India (RBI). Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 459.47 crore on November 12, 2014.

Shares of capital goods companies gained after the production of capital goods increased 11.6% in September, against a decline of 6.6% a year ago and 9.7% in August this year. In scrip specific development, shares of National Aluminium (Nalco) have surged after reporting a robust 91% year on year rise in net profit to Rs 342 crore for the second quarter ended September 30, 2014, on back of higher income and operational performance. On the other hand, shares of Jaiprakash Associates have declined reporting a net loss of Rs 106.48 crore for the quarter as compared to a net profit of Rs 67.67 crore for the same quarter in the previous year.

On the global front, Asian stock markets were mostly higher as investors awaited a flurry of Chinese economic indicators later in the day, but energy stocks slumped after oil prices fell to four-year lows. Back home, Indian rupee strengthened by 2 paise to 61.49 against the dollar in early trade on better-than-expected inflation data released on Wednesday amid gains in the domestic equity market. The market breadth on BSE was negative, out of 2396 stocks traded, 1105 stocks advanced, while 1198stocks declined on the BSE.

The BSE Sensex is currently trading at 28002.14 down by 6.76 points or 0.02% after trading in a range of 28098.74 and 27911.17. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02%, while Small cap index up by 0.17%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.66%, Capital Goods up by 0.72%, IT up by 0.21%, Auto up by 0.11% and Power up by 0.11% while, Realty down by 1.28%, PSU down by 0.60%, Infrastructure down by 0.52%, Oil & Gas down by 0.49% and Bankex down by 0.29% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.30%, Sun Pharma Inds. up by 1.47%, BHEL up by 1.27%, Larsen & Toubro up by 0.92% and Infosys up by 0.74%. On the flip side, HDFC down by 1.27%, Dr. Reddys Lab down by 1.23%, Bharti Airtel down by 1.19%, Mahindra & Mahindra down by 0.71% and TCS down by 0.68% were the top losers.

Meanwhile, India’s annual industrial output growth, measured by index of industrial production (IIP), expanded more than expected at 2.5% in September after posting growth of 0.5% in August. The cumulative growth for the period April-September 2014-15 over the corresponding period of the previous year stands at 2.8%.

On sectoral basis, growth of electricity index, which occupies 10.32% weightage in the overall index, grew at a slower pace by 3.9% in the reported month as against 12.9% in August, while mining sector output growth too slowed down to 0.7% as compared to 2.6% growth in the previous month.  On the flip side, the output of manufacturing sector, which occupies 75.52% weightage in the overall index, grew by 2.5% in September from a growth figure of 12.9% in August.

The cumulative growth of Mining, Manufacturing and Electricity sectors during April-September 2014-15 over the corresponding period of 2013-14 stood at 2.1%, 2.0% and 10.4% respectively.  On Use-based classification, capital goods production, a barometer for investments in the economy grew by 11.6% for the month under review .The output of basic goods sector grew by 5.1% as against 9.6% in August, while consumer non-durables output grew by 1.5% in September as compared to -0.9% in the previous month. The output of consumer durables sector continued its contraction though with a slower pace, declining by 11.3% in month under review as compared to massive contraction at 15.00% in August, indicating that consumers are reeling under high inflation which is impacting their spending.

This data is definitely a heartening development for Narendra Modi government, which is looking to revive the economy and has taken slew of measures, like deregulating diesel prices, linking gas prices to global benchmarks, amendments to labour policies towards this. Notably, this another piece of reading which strengthens the case for rate cut by RBI In its upcoming monetary policy in December after India’s consumer price inflation eased at another all time low level since the launch of the new series of Consumer Price Index in 2012, at 5.52% in October as compared to 6.46% in September, helped by the lower prices of food and fuel.

The CNX Nifty is currently trading at 8,371.30 down by 12.00 points or 0.14% after trading in a range of 8,408.00 and 8,345.60. There were 20 stocks advancing against 30 declining on the index.

The top gainers on Nifty were Cipla up by 2.30%, Sun Pharma up by 1.45%, BHEL up by 1.27%, Larsen & Toubro up by 0.99% and Jindal Steel & Power up by 0.88%. On the flip side, BPCL down by 3.72%, NMDC down by 2.50%, Cairn India down by 1.97%, Grasim Industries down by 1.80% and DLF down by 1.75% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 spurted by 0.71%, Straits Times soared 0.57%, Hang Seng up by 0.10%, FTSE Bursa Malaysia KLCI improved 0.06% and Taiwan Weighted was up by 0.33%. On the flip side, KOSPI Index contracted 0.33%, Jakarta Composite dipped 0.25% and Shanghai Composite was down by 0.37%.