Benchmarks turn green in noon deals; Sensex regains 25,750 mark

Indian equity benchmarks, wiping all of their initial losses, staged splendid recovery in noon deals and entered into green terrain with frontline gauges recapturing their crucial 25,750 (Sensex) and 7,800 (Nifty) levels as investors opted to buy beaten down but fundamentally strong stocks. Traders were getting some support with Finance Minister expressing his confidence that India would sail through global turmoils without much adverse impact. Meanwhile, External Affairs Minister Sushma Swaraj, asserting that India offers immense opportunities, has sought investments from the US industry in both public and private sectors in the country for a “win-win” outcome.

Firm opening in European counters too supported the sentiment, CAC, DAX and FTSE all were trading in green with a gain of around half a percent in early deals. However, all the Asian markets were trading in red at this point of time 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. Back home, on the sectoral front, realty, banking and fast moving consumer goods witnessed the maximum gain in trade, while auto, power and technology remained the top losers on the BSE sectoral space. The broader indices too were trading in green, while the market breadth on the BSE was positive; there were 1243 shares on the gaining side against 1078 shares on the losing side while 115 shares remain unchanged.

The BSE Sensex is currently trading at 25750.48, up by 98.64 points or 0.38% after trading in a range of 25386.48 and 25754.42. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.11%, while Small cap index up by 0.34%.

The top gaining sectoral indices on the BSE were Realty up by 0.79%, Bankex up by 0.55%, FMCG up by 0.44%, Consumer Durables up by 0.42% and PSU up by 0.27% while, Auto down by 0.54%, Power down by 0.34%, TECK down by 0.23%, INFRA down by 0.17% and Metal down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.59%, ITC up by 1.39%, Mahindra & Mahindra up by 1.29%, NTPC up by 1.28% and Vedanta up by 1.25%. On the flip side, Tata Motors down by 1.88%, Bajaj Auto down by 1.47%, BHEL down by 1.41%, Wipro down by 1.24% and GAIL India down by 1.10% were the top losers.

Meanwhile, a sharp decline in demand for base metals and commodities from china has impacted exports of India’s engineering products to the neighboring country as per data compiled by Engineering Export Promotion Council of India (EEPC). The country’s engineering exports to China plunged by 38 per cent in August. Engineering products, which have been effected by demand slowdown in China include steel, iron, non-ferrous metals, industrial machinery, auto components and bicycle parts. Further, Chinese Yuan devaluation has also added dent in the competitiveness of Indian exports.

EEPC report further highlighted that the exports of engineering products, one of the essential groups of exported items from India sharing 21.15 percent in August 2015 on India’s total merchandise exports, registered a negative growth of 29.5 percent growth rate to $4.49 billion compared to $6.38 billion in same period previous fiscal. Though the exports figures bounced back positively in July after consecutive negative growth in the first three months of the new fiscal, the August figures considerably marked a sharp decline by 29 percent. While, the cumulative value of engineering exports recorded a dip by over 10 percent to $26 billion in the current fiscal 2015-2016 from $ 8.8 billion the same period last year.

Out of 33 engineering panels, 24 panels (72 percent) of the engineering panels recorded a negative growth and remaining 9 panels fared positive growth in the month of August 2015. Products of Iron and Steel have dropped by 21.5 percent in august 2015 over august 2014, which is more than the cumulative fall during April- August 2015 compared to April-August 2014. Aircraft and spacecrafts, Ships, boats and floating products registered a drastic fall in growth rates by 78 percent and 99.6 percent respectively in August 2015 over August 2014.All non ferrous metals and products barring Nickel and Zinc products witnessed deterioration in exports during August 2015 against same period last fiscal. The highest decline is seen in the exports of Copper and products falling by 32 percent during August 2015 over same period last year, followed by Aluminium and Tin products falling by 18 percent during August 2015.

Among the Industrial Machinery panel, products like IC engines, Pumps and valves, Air condition repair machinery, Machine tools and others witnessed decline in growth rates. The Industrial Machinery as whole declined sharply by 15.3 percent during the said period. Other panels like, accumulator and batteries, nuclear reactors, nickel and zinc products from Non ferrous panel and Cranes and winches registered positive growth against the same period last year.

Further the exports to UK, Italy and Turkey too recorded negative growth during August and the April-August period. For August, even the US, which is perceived to be showing an economic recovery, saw a 13.5% fall in imports of engineering goods from India. India's engineering exports to 21 countries fell in August, while just four - Singapore, Germany, Malaysia and the Netherlands - posted an increase. On top of the falling demand, the government's decision to give protection to the domestic steel manufacturers via safeguard duty and other support measures too has impacted the user industries and thereby exports.

The CNX Nifty is currently trading at 7829.65, up by 17.65 points or 0.23% after trading in a range of 7723.25 and 7829.85. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.75%, Cairn India up by 1.45%, ITC up by 1.39%, Indusind Bank up by 1.35% and PNB up by 1.26%. On the flip side, Bosch down by 3.61%, NMDC down by 3.27%, Power Grid down by 2.82%, Zee Entertainment down by 2.27% and Tata Motors down by 1.95% were the top losers.

All the Asian equity markets were trading in red; Hang Seng tumbled 618.66 points or 2.84% to 21,177.92, Taiwan Weighted dropped 172.5 points or 2.06% to 8,193.42, Jakarta Composite decreased 84.2 points or 1.94% to 4,259.84, Shanghai Composite fell 58.23 points or 1.83% to 3,127.39, KOSPI Index shed 37.42 points or 1.89% to 1,944.64, Straits Times dipped 21.32 points or 0.74% to 2,847.15 and FTSE Bursa Malaysia KLCI was down by 21.13 points or 1.29% to 1,614.24.

European Markets were trading in green; UK’s FTSE rose 0.37%, France’s CAC gained 0.31% and Germany’s DAX was up by 0.20%.