Benchmarks pare some early losses; still continue to trade in red

Recovering from day’s low, benchmark equity indices have gained momentum however were still trading below the neutral line as retail investors started off-loading their bets, tracking a global sell-off on weak Chinese factory data. Sentiments came under pressure after the Asian Development Bank (ADB) lowered its growth projections for India for 2015-16 to 7.4 per cent, from the 7.8 per cent earlier, citing weak monsoon, poor external demand and inability of the government to push reforms. Besides, lack of confidence among market participants about prospects of a rate cut by the RBI at its policy meet next week has also dampened sentiment.  However, bargain buying which has emerged at lower levels has brought some recovery for Indian equity markets. Sentiment got some support with Finance Minister Arun Jaitley’s statement that we have learnt to live in the era of turmoils and the government is focussing on strengthening the country's real economy and harnessing its true growth potential of 8-9 per cent. Also, the enhanced activity of the southwest monsoon will bring good rainfall in several parts of the country for the next three-four days, giving breather to many regions reeling under severe water deficiency, according to the India Meteorological Department (IMD) report.

On the global front, Asian markets were trading in red as fears of an entrenched global economic slowdown gripped investors, underlined by a weak factory survey from China, while the greenback firmed as investors fled to relatively safe-haven assets. Overnight on Wall Street, the Dow Jones industrial average fell 1.09%, the S&P 500 lost 1.23%, and the Nasdaq Composite fell 1.5% to 4,756.72. Back home, continuing its slide for the third straight day, Indian rupee depreciated by another 19 paise to trade at 66.07 against the dollar in early trade on foreign funds outflows amid a lower opening in the domestic equity market.

Back on street, stocks from Realty, Consumer Durables and FMCG counters were supporting the markets’ uptrend, while those from Metal, Teck and Auto counters were adding to the underlying cautious undertone. Shares of metal companies were trading lower after China’s, the world's largest consumer of metals, Caixin PMI fell to a six and a half year low citing fears about the health of China's economy. In scrip specific development, Shares of Mindree have gained after the company launched Global Learning and Software Delivery Center in Bhubaneshwar. Furthermore, Visa Steel has surged after lenders of the company decided to invoke Strategic Debt Restructuring pursuant to RBI Circular dated 8 June 2015.

The market breadth on BSE was negative, out of 2075 stocks traded, 946 stocks advanced, while 1035 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25595.22, down by 56.62 points or 0.22% after trading in a range of 25386.48 and 25601.00. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mix; the BSE Mid cap index was down by 0.34%, while Small cap index up by 0.07%.

The top gaining sectoral indices on the BSE were Realty up by 0.73%, Consumer Durables up by 0.14% and FMCG up by 0.10%, while Metal down by 0.92%, TECK down by 0.50%, Auto down by 0.46%, Capital Goods down by 0.43% and infrastructure down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.82%, Mahindra & Mahindra up by 1.62%, Vedanta up by 0.97%, ITC up by 0.93% and Hero MotoCorp up by 0.51%. On the flip side, Tata Motors down by 1.95%, Wipro down by 1.88%, Tata Steel down by 1.77%, Bajaj Auto down by 1.44% and ONGC down by 1.39% were the top losers.

Meanwhile, the union cabinet has extended the time limit of the ‘control order’ for pulses, edible oils and oilseeds by another year, which will enable the state governments to take steps to curb unscrupulous trading and hoarding of pulses, edible oils and oilseeds. The validity of a central order has been extended from October 1 to September 30, 2016 in respect of pulses, edible oils and oilseeds. The extension will also help the states in tackling the problem of ensuring adequate availability of these commodities in the domestic market and keep prices under control.

In view of shortages, it was decided in 2014 that pulses, edible oils and edible oilseeds be brought under control order to ensure availability. The same order is expiring on September 30. They states can impose stock limits/licensing requirements etc to curb unscrupulous trading, hoarding and profiteering.

Communications and Information Technology Minister Ravi Shankar Prasad stated that the cabinet has also decided to put stock limit on registered warehouses with regards to pulses, edible oils and oilseeds. The government has taken a series of measures to enhance availability and moderate prices of essential commodities, especially pulses and onions. Future trade in pulses like urad and tur has already been suspended. Export of pulses has been banned and there is zero duty on import of pulses. In order to increase availability of pulses in the domestic market, 5,000 tonnes of urad and 5,000 tonnes of tur have been ordered to be imported. These imports are likely to reach shortly, which will ease the price situation.

The CNX Nifty is currently trading at 7772.20, down by 39.80 points or 0.51% after trading in a range of 7723.25 and 7783.05. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.86%, Cairn India up by 1.31%, Mahindra & Mahindra up by 1.23%, ITC up by 0.82% and BPCL up by 0.59%. On the flip side, Bosch down by 3.51%, NMDC down by 2.98%, Zee Entertainment down by 2.65%, Tata Motors down by 2.06% and Wipro down by 2.06% were the top losers.

Asian markets were trading in red; Hang Seng was down by 2.92%, Taiwan Weighted down by 2.12%, Shanghai Composite down by 2.11%, Jakarta Composite down by 1.8%, Straits Times down by 1.15%, KOSPI Index down by 1.54% and FTSE Bursa Malaysia KLCI down by 1.31%.