Benchmarks end flat ahead of IIP data

Friday turned out to be a disappointing session for the Indian equity indices which ended on quiet note despite gap-up opening as investors remained on sidelines ahead of industrial production (IIP) number for July to be released later in the day. Earlier, sentiments remained up-beat with the statement of the group headed by Reserve Bank of India Governor Raghuram Rajan, which is one of the subcommittees of the Financial Stability and Development Council (FSDC) that there was no immediate cause of worry for India from global economic developments and financial volatility, though it has urged to be vigilant. Some support also came after Foreign Investment Promotion Board (FIPB) will be taking 25 Foreign Direct Investment (FDI) proposals, in its 224th meeting which will be held on September 22; under the chairmanship of Secretary (Economic Affairs).The proposal includes those of Aditya Birla Nuvo, Cipla, Sun Pharma Advanced Research and HDFC Capital Advisors.

But markets started paring profits as traders turned a bit cautious ahead of IIP to be announced later in the day. There was general expectation of a modest decline in the IIP numbers for July from its previous month figure of 3.8%, as the core sector data too had shown a dismal data earlier. Sentiments also remained dampened on report that June-September monsoon, which irrigates nearly half of the country's farmlands, has started withdrawing from the north-western region.

On the global front, European counters have made a weak start and were trading lower in early deals, extending the last session’s weakness on rising concerns on companies' exposure to Brazil. Asian markets exhibited mixed trend on Friday as Investors kept grappling with heightened global equity volatility as they awaited the Federal Reserve’s decision next week and watching developments in China.

Back home, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 66.52 per dollar at the time of equity markets closing compared with its previous close of 66.43. Sentiments also weighed on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 121.19 crore on September 10, 2015, as per provisional data released by the stock exchanges. However, some support came after NITI Aayog vice-chairman Arvind Panagariya made a strong pitch for 50-100 bps cut in the RBI’s key rates, seeking support for economic recovery.

Banking stocks witnessed good bounce back despite the Deputy Reserve Bank of India (RBI) governor S.S. Mundra stated that in the next few days, RBI will announce the names of successful applicants who are to be granted small finance bank licences. Select stocks related to auto space remained on buyers’ radar after Society of Indian Automobile Manufacturers (Siam) said sales of domestic cars in August grew 6% over the same month last year.

The NSE’s 50-share broadly followed index Nifty declined marginally to end near the psychological 7,800 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by tad above ten points and managed to hold its crucial 25,600 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of over half a percent. The market breadth remained in favor of decliners, as there were 1,470 shares on the gaining side against 1,181 shares on the losing side while 119 shares remain unchanged.

Finally, the BSE Sensex lost 11.96 points or 0.05% to 25610.21, while the CNX Nifty declined by 1.20 points or 0.02 % to 7789.30.

The BSE Sensex touched a high and a low 25875.96 and 25530.41, respectively. The BSE Mid cap index was up by 0.17%, while Small cap index was down by 0.63%.

The top gaining sectoral indices on the BSE were Realty up by 0.73%, IT up by 0.44%, FMCG up by 0.42%, Consumer Durables up by 0.30% and TECK up by 0.19%, while Metal down by 1.53%, Capital Goods down by 0.52%, Oil & Gas down by 0.32%, Auto down by 0.29% and Infrastructure down by 0.28% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.12%, Infosys up by 0.96%, Wipro up by 0.93%, HDFC up by 0.88% and Dr. Reddys Lab up by 0.75%. On the flip side, Tata Steel down by 3.02%, Vedanta down by 2.56%, GAIL India down by 2.48%, Tata Motors down by 2.46% and BHEL down by 2.22% were the top losers.

 Meanwhile, Department of Industrial Policy and Promotion (DIPP) has said that it will start working closely with banks across the country in both rural and urban India, especially in rural areas to push up the government’s Start-Up India initiative. Commerce and Industry Minister Nirmala Sitharaman said that if each of rural bank branches gives tribal or Dalit population something to start up with, it would take the whole startup and innovate India (initiative) thought to district level.

Sitharaman further said that the government would see to it that the startups don’t run out of money and that their equity requirements don't go unattended. Through 10,000 crore fund of fund for startups, the government will provide soft loans, capital for the one who want to start fresh enterprises.

Furthermore, she added that there is a need for greater participation of industry in driving ahead the movement of Skill India. DIPP is also working on various ways to reach out to the urban educated and the deprived section of the society in order to build entrepreneurship. Currently, the skill development and entrepreneurship ministry offers certified training in 31 different sectors under the Pradhan Mantri Kaushal Vikas Yojana.

 The CNX Nifty touched a high and low 7864.85 and 7759.90 respectively.

The top gainers on Nifty were BPCL up by 1.75%, SBI up by 1.34%, Wipro up by 1.25%, HDFC up by 1.20% and Infosys up by 1.06%. On the flip side, Cairn India down by 3.73%, BHEL down by 3.11%, Tata Steel down by 2.98%, Tata Motors down by 2.97% and Vedanta down by 2.51% were the top losers.

European Markets were trading in the red; France’s CAC was down by 0.71%, Germany’s DAX was down by 0.80% and UK's FTSE was down by 0.17%.

The Asian markets closed mostly in red on Friday, as uncertainty over whether the US Federal Reserve will raise interest rates next week gripped investors. Japanese business sentiment turned positive in July-September and companies stuck to upbeat spending plans, a government survey showed, offering some relief for policymakers worried about a hit from slowing Chinese growth and ensuing market turmoil. The poll, the first comprehensive business confidence survey for the current quarter, followed a recent run of gloomy data, including a survey showing the service sector’s mood worsening in August. An index gauging sentiment at large manufacturers stood at plus 11.0 in July-September, rebounding from minus 6.0 in the previous quarter. Japan’s Corporate Goods Price Index fell to a seasonally adjusted annual rate of -3.6%. South Korea’s central bank reassured investors that its future policy decisions would be based on economic data, but noted that another rate cut soon was unlikely because the economy was already recovering as expected. The Bank of Korea’s seven-member policy committee unanimously held the base rate steady at a record-low 1.50 percent, the third straight month it unanimously kept the rate unchanged after cutting it in June.