Benchmarks pare initial losses; trade near neutral line

Indian equity benchmarks pared initial losses and were trading near neutral line with negative bias in afternoon session. Though most of the sectoral indices were trading in green, sharp profit booking witnessed in realty, oil and gas and banking stocks dragged the major indices down. However, markets losses remain capped and a recovery from inter-day low level was visible as buying appeared in consumer durables, IT and capital goods stocks. Sentiments got some support as the OECD in its latest economic report has highlighted that India is the only major economy where the CLI points to a pick-up in growth momentum. Further, the improvement in macro-economic indicators such as IIP and inflation also buoyed the market sentiments. Among major sectoral indices, consumer durables was top gaining index up by around 1.19%, while, realty remained the biggest losing index trading down by around 1.21%. Shares of sugar manufactures were in demand and trading higher by up to 12% as Uttar Pradesh cabinet decided not to increase sugarcane prices for the 2014-15 crushing season. Broader indices outperformed the major indices with high margin as both mid cap and small cap indices were trading up by over 0.35%.

Whirlpool of India has zoomed 14% to Rs 608 after reported an over two-fold jump in net profit of Rs 40.70 crore for Q2FY15. On the other hand, Oil India has dipped 3.5% to Rs 576, extending its previous day’s 2% fall after reporting a 33% decline in net profit at Rs 608 crore for the quarter-ended September as a historic downslide in crude oil price impacted realizations.

On global front, Asian markets were trading mixed with Nikkei 225 up by 1.09% and Jakarta Composite down 0.25% as investors awaited a flurry of Chinese economic indicators later in the day. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was positive, out of 2,644 stocks traded, 1,271 stocks advanced, while 1,264 stocks declined on the BSE.

The BSE Sensex is currently trading at 27987.88, down by 21.02 points or 0.08% after trading in a range of 27911.17 and 28098.74. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.40%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.19%, IT up by 0.73%, Capital Goods up by 0.73%, TECK up by 0.51% and Power up by 0.17%. On the other hand, Realty down by 1.21%, Oil & Gas down by 0.69%, Bankex down by 0.60%, PSU down by 0.56% and INFRA down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.79%, BHEL up by 1.52%, Wipro up by 1.38%, Infosys up by 1.15% and Sun Pharma Inds up by 1.00%. On the flip side, SBI down by 0.86%, Axis Bank down by 0.83%, HDFC down by 0.77%, GAIL India down by 0.68% and Dr. Reddys Lab down by 0.61% were the top losers.

Meanwhile, The Organisation for Economic Cooperation and Development (OECD) in its latest economic report has highlighted that India is the only major economy where the CLI points to a pick-up in growth momentum. The Composite leading indicators (CLI), designed to anticipate turning points in economic activity relative to trend, for India inched up to 99.1 in September from 99 in August. Over past few months, the CLI for India has been witnessing a rising trend, indicating that economic growth is gaining momentum.

After two years of slowdown, Indian economy is showing signs of revival and expanded at its fastest pace in more than two years by 5.7% y-o-y during Q1FY15 as compared to 4.7% growth recorded in same quarter last year and 4.6% in Q4FY14. During April-September FY15, industrial production grew by 2.5% as compared to 0.5% in the same period of corresponding period.

On global front, the OECD highlighted that most of the major economies - developed and developing including the United States, Brazil, China and Russia, are expected to witness stable growth momentum. Further, the CLIs for the OECD area, a group of 33 major countries and 6 major non-member economies, continue to signal stable growth momentum. The CLIs for China and Brazil stood at 99.1 and 99.2 in September as compared to 98.9 and 99.2 in the previous month. Among developed countries, the CLI points to growth losing traction in Japan as CILs fell to 99.6 in month under review from 99.7 in August.

Within the Euro Area, the CLI continues to point to a loss of growth momentum, with stronger signals of a slowdown for Germany and Italy. However the outlook continues to suggest stable growth momentum in France. The CLI for the United Kingdom indicates that growth may ease, albeit from relatively high levels.
 
The CNX Nifty is currently trading at 8373.65, down by 9.65 points or 0.12% after trading in a range of 8345.60 and 8408.00. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Lupin up by 2.03%, HCL Tech. up by 1.93%, Cipla up by 1.73%, BHEL up by 1.66% and Wipro up by 1.29%. On the flip side, BPCL down by 3.91%, NMDC down by 2.21%, Cairn India down by 1.86%, DLF down by 1.86% and Grasim Industries down by 1.46% were the top losers.

Asian markets were trading mixed, FTSE Bursa Malaysia KLCI up by 1.07 points or 0.06% to 1,817.31, Straits Times up by 24.74 points or 0.75% to 3,308.45, Hang Seng up by 57.15 points or 0.24% to 23,995.33, Taiwan Weighted up by 61.72 points or 0.69% to 8,980.67, Nikkei 225 up by 187.3 points or 1.09% to 17,384.35, Jakarta Composite down 12.42 points or 0.25% to 5,036.42, KOSPI Index down 9.64 points or 0.49% to 1,957.63, Shanghai Composite down 0.31 points or 0.01% to 2,494.17.