Markets trade flat with negative bias; Sensex below 28100 mark

After getting a weak start, Indian equity benchmarks recovered from day’s low and altering between positive and negative territory in late morning session as investors remain cautious ahead of the key macroeconomic data, CPI and IIP due to be released tomorrow and WPI due to be unveiled on Friday. At present, the frontline indices were trading flat with bit of negative bias as losses in financials and auto shares offset gains in the technology pack. The overall sentiments remained under pressure tracking weakness in the Asian peers with China equities losing steam after China devalued the yuan on Tuesday after a run of poor economic data, guiding the currency to its lowest point in almost three years.   Besides, depreciating rupee against the dollar also dampened the trading sentiment.  However, losses remained capped with the Organisation for Economic Cooperation and Development's (OECD) statement that it expected India's growth to be stable, even as it forecast a slowing of the Chinese economy. Also, the government will bring the much-awaited bill on GST for passage in the Rajya Sabha, despite doubts of the opposition Congress allowing passage of the Constitution Amendment Bill.

On global front, Asian stock markets tumbled after China unexpectedly devalued its tightly-controlled yuan in response to weakening trade and growth. China's central bank described the move as a one-off depreciation of nearly 2 percent, and said it was based on a new way of managing the exchange rate that better reflected market forces.  However, the US stock markets ended on a positive note after a $37.2 billion deal by Warren Buffett's Berkshire Hathaway and weak Chinese data that boosted hopes for fresh stimulus in the world's No. 2 economy, while oil jumped almost 4 per cent. Back home, Indian rupee fell sharply by 29 paise to 64.16 against the US dollar in early trade due to a rise in the greenback against other currencies overseas.

Back on street, stocks from IT, Teck and Consumer Durables counters were supporting the markets’ uptrend, while those from Metal, Auto and Capital Goods counters was adding to the underlying cautious undertone. In scrip specific development, shares of eClerx Services have rallied after reporting a better-than-expected consolidated net profit at Rs 73.24 crore for the first quarter ended June 30, 2015. On the flip side, shares of IL&FS Transportation Networks (ITNL) have plunged after the company reported a sharp 98% year-on-year (Y-o-Y) declined in consolidated net profit at Rs 2.90 crore for the quarter ended June 30, 2015 (Q1), due higher interest and raw material cost.

The market breadth on BSE was negative, out of 2339 stocks traded, 1080 stocks advanced, while 1165 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28092.65, down by 9.07 points or 0.03% after trading in a range of 28013.17 and 28205.12. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mix; the BSE Mid cap index was up by 0.11%, while Small cap index down by 0.01%.

The top gaining sectoral indices on the BSE were IT up by 1.31%, TECK up by 0.99%, Consumer Durables up by 0.18%, Realty up by 0.17% and Bankex up by 0.13%, while Metal down by 0.94%, Auto down by 0.50%, Capital Goods down by 0.47%, Power down by 0.46% and Infrastructure down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.77%, Cipla up by 1.52%, SBI up by 1.47%, TCS up by 0.98% and Maruti Suzuki up by 0.42%. On the flip side, Hindalco down by 2.09%, Tata Motors down by 1.78%, Tata Steel down by 1.49%, Hindustan Unilever down by 1.39% and BHEL down by 1.16% were the top losers.

Meanwhile, the government is considering a proposal to allow sugar mills to export to China under the preferential quota system, under which exports are permitted at low tariffs. The government is already selling sugar to the US and EU markets under the preferential quota system and is looking to explore the same with China, which imports about 3-4 lakh tonnes of sugar annually from India. The move is aimed at liquidating the surplus stock of the sweetener.

Through the preferential quota system, India exports 10,000 tonnes of white sugar to the EU and 8,100 tonnes to the US. After the quota is reached, a higher tariff is applied on additional exports. The government is also in discussions with other countries like Canada, Indonesia and Malaysia to know if there is a possibility to barter sugar for vegetable oils and pulses in those countries. Food Minister Ram Vilas Paswan had said that the government is considering barter trade of sugar against import of farm items like pulses from some countries.

At present export through normal route don’t looks feasible due to decline in global prices; the government is trying all options to push export of 4 million tonnes of surplus sugar. Sugar output has exceeded domestic demand for the last five years and the trend is expected to continue in this marketing year (October-September) too. The country is estimated to produce 28 million tonne sugar in 2014-15 marketing year, against annual demand of 24.8 million tonne.

The CNX Nifty is currently trading at 8519.00, down by 6.60 points or 0.08% after trading in a range of 8494.60 and 8556.25. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.26%, Cipla up by 1.57%, Infosys up by 1.56%, SBI up by 1.50% and TCS up by 1.01%. On the flip side, NMDC down by 2.01%, Hindalco down by 1.90%, Tata Motors down by 1.65%, ACC down by 1.63% and Tata Steel down by 1.59% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted was down by 0.7%, Jakarta Composite down by 2.33%, Straits Times down by 0.8%, KOSPI Index was down by 0.67%, Shanghai Composite down by 0.4% and FTSE Bursa Malaysia KLCI down by 0.84%. On the flip side, Hang Seng up by 0.92% and Nikkei 225 was up by 0.94%.