Benchmarks pair some early gains in late morning session

The Indian equity markets have came off from their highs after witnessing a decent up move in early trade as investors turned cautious and booked profits at higher levels.  Sentiment on the street weakened after Indian manufacturing activity slowed more than expected to a seven-month low in September due to softening demand and output, a business survey showed on Thursday. The investors also remained concerned about the report that the monsoon season ended on Wednesday with a 14% deficit, making it the weakest monsoon since 2009. In terms of average countrywide rainfall during the season (June-September), this year was the third lowest since 1979, the other acutely deficient year being 2002. Also, the rating agency Fitch Ratings has lowered India’s GDP growth estimate for the current fiscal to 7.5 percent from 7.8 percent on average monsoon but said the country is poised to grow at 8 percent next fiscal on reform push.

On the global front, Asian stock markets traded higher in early trade, following solid U.S. payroll data, while caution remained over the outlook for emerging-market economies. Signs of improvement in the U.S. economy are positive for the global economic outlook, particularly for Japan and other advanced economies that export goods to the U.S. However, China's official PMI released separately inched up to 49.8 in September from the previous month's reading of 49.7, though it still showed contraction for the second straight month. Back home, Indian rupee appreciated by 9 paise to 65.49 against the dollar in early trade on sustained selling of the American currency by exporters and banks amid increased foreign fund inflows.

Back on street, stocks from Teck, Power and FMCG counters were supporting the markets’ uptrend, while those from Realty, Auto and Consumer Durables counters were adding to the underlying cautious undertone. In scrip specific development, shares of Kalpataru Power Transmission have surged after the company secured new orders of Rs 781 crore. Furthermore, Bharat Electronics gained on the report that the company is planning to set up new facility in Anantapur district of Rayalaseema region in Andhra Pradesh at an estimated investment of Rs 500 crore.

The market breadth on BSE was positive, out of 2170 stocks traded, 1153 stocks advanced, while 935 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26237.41, up by 82.58 points or 0.32% after trading in a range of 26199.32 and 26431.80. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15%, while Small cap index up by 0.40%.

The top gaining sectoral indices on the BSE were TECK up by 0.61%, Power up by 0.53%, IT up by 0.52%, FMCG up by 0.25% and Capital Goods up by 0.23%, while Realty down by 0.94%, Auto down by 0.43%, Consumer Durables down by 0.38%, Bankex down by 0.23% and Metal down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.39%, Sun Pharma Inds. up by 2.33%, Infosys up by 2.12%, Lupin up by 1.97% and TCS up by 1.30%. On the flip side, Tata Motors down by 1.91%, BHEL down by 1.87%, Maruti Suzuki down by 1.63%, HDFC down by 1.01% and ICICI Bank down by 0.56% were the top losers.

Meanwhile, Reserve Bank of India (RBI) governor Raghuram Rajan, acknowledging Prime Minister Narendra Modi’s initiative to market India as an investment destination has described him as being “ahead of us” and said that his visits abroad need to be backed up with “action on the ground” to reinforce the “good impression that is created”.  He said that “I think the world view of India in the aftermath of Modi’s foreign visits is changing positively.

Rajan said that we have to come up to speed in a number of dimensions. He added that it is known abroad that there are some issues that they have to deal with, but it should not be worse than their expectations. For example, if the idea of India as a strong economy is sold outside and they come in, and they don't find the ease of doing business, the permissions, etc people aren't (happy).”

The RBI chief also praised the government for effective food management, which he said helped keep food inflation in check despite two consecutive years of drought. Invoking PM Modi's advice to India Inc, Dr Rajan said investors must take a plunge with a 'hope and a prayer' and not wait for government actions. Rajan said he will be “accommodative” if data permits, signaling the possibility of further easing in interest rates.

The governor further said the relationship between the RBI and the government has been strong, but added that he did not always agree with the finance minister's point of view, adding that in a sense we have to be a gatekeeper and sometimes say no!

The CNX Nifty is currently trading at 7960.15, up by 11.25 points or 0.14% after trading in a range of 7942.85 and 8008.25. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.32%, Ultratech Cement up by 2.30%, Sun Pharma up by 2.26%, Infosys up by 2.15% and Ambuja Cement up by 2.04%. On the flip side, HCL Tech down by 9.69%, Tata Motors down by 2.01%, BHEL down by 1.80%, Yes Bank down by 1.51% and Maruti Suzuki down by 1.44% were the top losers.

Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 0.35%, Shanghai Composite was up by 0.48%, KOSPI Index up by 1 %, Straits Times up by 0.87%, Jakarta Composite up by 0.85%, Taiwan Weighted up by 1.54%, Hang Seng up by 1.41% and Nikkei 225 up by 2.48%.