Markets pare early gains to trade marginally in green

Indian equity markets have pared early gains and are trading at the lowest point of the day, though managing to hold in green. Some support to the market was coming with the report that the PE investments in the first nine months of 2015 have reached $13 billion from 504 deals, and are expected to cross previous annual milestone of $14.7 billion hit in 2007. Appreciation in the rupee too supported the sentiment. The Indian rupee strengthened by 4 paise to 65.34 against the dollar in early trade on sustained selling of the US currency by exporters and banks amid firm equity markets. However, gains remained capped on the report that India's pivotal services industry lost some momentum in September as demand weakened despite firms cutting prices for the first time this year. The Nikkei/Markit Services Purchasing Managers' Index eased to 51.3 in September from 51.8 of August but marked its third straight month above the 50-level that separates growth from contraction.

On the global front, Asian markets were trading in green; following another U.S. rally, while investors kept an eye on the region's central banks. Back home, in scrip specific development, share of Wockhardt was trading higher after the company said that UK’s health regulator Medicines and Healthcare Products Regulatory Agency (MHRA) has found ‘no critical observations’ at its L-1 Chikalthana drug manufacturing plant. Sun Pharmaceutical was trading up by 1.65 after the company has announced its US subsidiary, Ranbaxy Pharmaceuticals, and other partners have entered into a settlement, ending the patent litigation with drug maker Actavis over anti-acne drug Absorica (isotretinoin capsules). Among broader markets, BSE Midcap and Smallcap indices are up 0.30-70%. Markets breadth is positive with 1409 shares advancing and 861 shares declining.

The BSE Sensex is currently trading at 26869.11, up by 83.56 points or 0.31% after trading in a range of 26804.04 and 27010.27. 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 0.43%, while Small cap index gained 0.77%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.14%, Oil & Gas up by 1.70%, Realty up by 1.50%, Metal up by 1.37% and PSU up by 0.98%, while IT down by 0.51%, TECK down by 0.22% and Bankex down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.41%, GAIL India up by 2.93%, Coal India up by 2.85%, Cipla up by 2.56% and Dr. Reddys Lab up by 2.06%. On the flip side, BHEL down by 1.94%, Infosys down by 1.35%, HDFC Bank down by 0.87%, Maruti Suzuki down by 0.85% and Bajaj Auto down by 0.81% were the top losers.

Meanwhile, mirroring softer demand conditions across the country, the seasonally adjusted Nikkei Business Activity Index slowed to 51.3 in September from 51.8 in August, but remained above the 50-mark for the third straight month which separates contraction from expansion. Though, incoming new work at service providers rose for the third month in succession during September, but the rate of expansion eased since August. New order growth in the goods producing sector also softened and was the weakest since June.

As per the survey, economy lost steam in September with both services output and manufacturing production rising at slight and slower rates, the seasonally adjusted Nikkei India Composite PMI Output Index fell to 51.5 in September from 52.6 in August, highlighting the weakest rate of expansion in the current period of growth and reflecting weaker increases in both manufacturing and services output.

The level of outstanding business held by Indian service providers fell again in September. This was the third consecutive monthly drop in backlogs, although the rate of depletion was marginal overall. As a consequence of the slowdown, Indian service providers maintained employment levels broadly unchanged in September.

Though, the survey highlighted that input costs faced by services firms decreased in September for the first time in ten months, with survey participants reporting lower petrol prices. The decline in cost burdens was, however, only marginal. With purchase prices also falling at manufacturers, overall input costs across the private sector as a whole declined for the first time in six-and-a-half years. The prices charged sub-index slumped to a near 5-year low of 49.5 from 51.0 in August as falling commodity prices helped weaken input cost pressures.

Private sector businesses passed falling input prices on to clients as tariffs were lowered on average, although only marginal. The decline in charges was broad-based by sub-sector, with reductions seen in both manufacturing and services. Going forward, services activity is expected to rise over the coming 12 months, with firms linking optimism to favourable government policies, planned increases in marketing budgets and hopes of better economic conditions. Though, service providers expect further setbacks, as highlighted by the Future Output Index sliding to its lowest mark in the history of the series.

The CNX Nifty is currently trading at 8137.75, up by 18.45 points or 0.23% after trading in a range of 8113.30 and 8180.95. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.49%, Idea Cellular up by 2.99%, Cipla up by 2.84%, Coal India up by 2.82% and GAIL India up by 2.81%. On the flip side, BHEL down by 2.28%, Infosys down by 1.45%, Bank of Baroda down by 1.37%, Ultratech Cement down by 1.29% and HDFC Bank down by 1.03% were the top losers.

Asian markets were trading in green; KOSPI Index increased 8.56 points or 0.43% to 1,986.81, FTSE Bursa Malaysia KLCI increased 14.36 points or 0.87% to 1,661.95, Shanghai Composite increased 14.64 points or 0.48% to 3,052.78, Hang Seng increased 16.87 points or 0.08% to 21,871.37, Straits Times increased 30.23 points or 1.06% to 2,881.48, Taiwan Weighted increased 44.51 points or 0.53% to 8,396.87, Jakarta Composite increased 113.21 points or 2.61% to 4,456.92 and Nikkei 225 increased 197.09 points or 1.09% to 18,202.58.