Benchmarks trade in fine fettle; Sensex manages to hold 25,700 mark

Indian equity benchmarks are trading in fine fettle in noon deals, supported by positive economic data. Sentiments remained buoyed as industrial production expanded at better-than-estimated 4.2 per cent in July this year compared to the same month last year as manufacturing activity and offtake of capital goods improved. Sentiments also remained up-beat after Wholesale Price Index (WPI) inflation declined to (-)4.95 per cent in August from (-)4.05 per cent in July. It was primarily on account of a sharp cooling in fuel costs. The wholesale fuel prices tumbled 16.50 per cent from a year ago, while food prices dropped 1.13 per cent year-on-year.

On the global front, European counter have made a cautious start and were trading mostly in red in early deals. Asian markets were trading mostly in red at this point of time as investors remained on sidelines ahead of Fed FOMC meet where the US Fed Chair is expected to raise the interest rates for the first time in eight years. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. On the sectoral front, realty, power and banking witnessed the maximum gain in trade, while there were no losers on the BSE sectoral space. The market breadth on the BSE was positive; there were 1,467 shares on the gaining side against 846 shares on the losing side while 89 shares remain unchanged.

The BSE Sensex is currently trading at 25704.43, up by 94.22 points or 0.37% after trading in a range of 25531.07 and 25749.23. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.98%, while Small cap index up by 0.65%.

The top gaining sectoral indices on the BSE were Realty up by 1.32%, Power up by 1.22%, Bankex up by 0.90%, Metal up by 0.85% and TECK up by 0.72%, while there were no losers on the index.

The top gainers on the Sensex were Tata Steel up by 2.55%, NTPC up by 2.51%, Wipro up by 2.05%, Axis Bank up by 1.99% and GAIL India up by 1.30%. On the flip side, Bajaj Auto down by 0.76%, Reliance Industries down by 0.70%, Coal India down by 0.49%, Hindustan Unilever down by 0.45% and Dr. Reddys Lab down by 0.38% were the top losers.

Meanwhile, amid the flow of cheap imports from China, which can impact investments worth Rs 1.2 lakh crore, the representatives of the domestic aluminium industry have met Finance Minister Arun Jaitley urging him to raise the import duty on the metal. Primary producers are ruing that production cost of aluminium is around $2,000 per tonne, while prices at the London Metal Exchange (LME) have slumped to $1,600 a tonne. The government has asked the industry to provide the performance of various companies for it to study and to ensure whether a hike in import duty is really needed.

Aluminium industry can contribute to India's growth, but while domestic production costs are rising they are falling globally. According to data from the Aluminium Association of India, cheaper imports have badly impacted the domestic industry. The domestic capacity of 41 lakh tonnes an annum is currently operating at 50 per cent. Meanwhile, the market share of domestic manufacturers has dropped to 44 per cent in 2014-15 with imports nearly doubling to 15.63 lakh tonne from 8.81 lakh tonne in 2010-11.

India’s total imports mainly from China and Middle-Eastern countries have grown by more than 159 per cent to 1,563 kilo tonnes (KT) in 2015, compared to 881 KT in 2011.This led to imports accounting for 56 per cent of Indian aluminium consumption in 2014-15, while products of Indian producers account for only 44 per cent. Moreover, China, having more than 50 per cent of world aluminium production, is now exporting over 20 per cent of its products and their exports to India have surged by 200 per cent in FY15 as compared to FY11.

Primary aluminium producers -Vedanta, Hindalco and Nalco have invested around Rs 1.2 lakh crore to increase the production capacity from 2.1 million tonnes per annum (MTPA) to 4.1 MTPA by 2018-19 fiscal. But the falling price of the metal on the benchmark London Metal Exchange and rising imports have forced, Vedanta to shut down the rolling mill of group company BALCO and also to shut down its Lanjigarh alumina refinery process production stream, which lead to the Lanjigarh facility's output declining to half and impacting up to 2,000 jobs. In last three years, LME prices have come down by 35 per cent to $1,660 per tonne in June, 2015 from a peak of $2,555 a tonne in June, 2011.

The CNX Nifty is currently trading at 7812.95, up by 23.65 points or 0.30% after trading in a range of 7761.85 and 7830.45. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.62%, BPCL up by 2.60%, NTPC up by 2.55%, Yes Bank up by 2.41% and Asian Paints up by 1.96%. On the flip side, Cairn India down by 2.44%, Bajaj Auto down by 0.85%, Idea Cellular down by 0.77%, Dr. Reddys Lab down by 0.74% and Reliance Industries down by 0.73% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 298.52 points or 1.63% to 17,965.70, Shanghai Composite tumbled 102.6 points or 3.21% to 3,097.64, Hang Seng slipped 29.41 points or 0.14% to 21,474.96, Straits Times decreased 14.86 points or 0.51% to 2,873.17 and KOSPI Index was down by 9.91 points or 0.51% to 1,931.46. 

On the flip side, Taiwan Weighted increased 1.47 points or 0.02% to 8,307.29, FTSE Bursa Malaysia KLCI rose 20.72 points or 1.29% to 1,624.32 and Jakarta Composite was up by 22.04 points or 0.51% to 4,382.51.

European Markets were trading mostly in red; Germany’s DAX lost 0.10% and France’s CAC was down by 0.86%, while UK’s FTSE was up by 0.43%.