Benchmarks trade flat with positive bias in early deals

After moving higher for last five consecutive sessions, Indian benchmarks made flat start with a negative bias, but are now trading in green in early deals on Wednesday, on account of buying by fund and retail investors. The sentiments were supported by Indian rupee appreciation against the US Dollar. Further, foreign portfolio investors (FPIs) bought shares worth a net Rs 480.24 crore on October 6, 2015, as per provisional data released by the stock exchanges, also adding positive milieu. However, gains remained capped following IMF lowering global growth forecast, it also lowered India's growth forecast to 7.3 per cent this year, from its earlier estimate of 7.5 per cent, and said that a faster-than-expected deceleration in inflation provides leeway for modest cuts in interest rates. Oil exploration & production companies such as Oil and Natural Gas Corporation (ONGC), Cairn India and Oil India were trading higher by up to 6% on the BSE in early morning trade after a sharp jump in global crude prices.

On the global front, the US markets ended mostly lower with the S&P 500 snapping a five-day winning streak to close slightly lower, while the Dow Jones Industrial Average managed to eke out a modest gain. The Asian markets were trading mostly in green as oil prices showed some signs of life, supporting battered resource shares and emerging economy currencies, while Japanese markets were cautious ahead of a crucial Bank of Japan policy meeting.

Closer home traders were seen piling position in Oil & Gas, Consumer Durables, PSU, Auto and IT, while selling was witnessed in Bankex, Metal, Realty and TECK. The market breadth on BSE was positive in the ratio of 1115: 496 while 71 scrips remained unchanged. 

The BSE Sensex is currently trading at 26964.03, up by 31.15 points or 0.12% after trading in a range of 26877.51 and 27003.77. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index added 0.46%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.06%, Consumer Durables up by 0.87%, PSU up by 0.56%, Auto up by 0.50% and IT up by 0.16%, while Bankex down by 0.15%, Metal down by 0.11%, Realty down by 0.11% and TECK down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.77%, GAIL India up by 1.85%, Maruti Suzuki up by 1.55%, Vedanta up by 1.40% and Infosys up by 0.83%. On the flip side, Wipro down by 1.76%, Bharti Airtel down by 1.62%, ICICI Bank down by 1.31%, Hero MotoCorp down by 0.89% and Tata Steel down by 0.77% were the top losers.

Meanwhile, the International Monetary (IMF) while cutting its global growth forecast has said that Indian economy is expected to grow faster than other major emerging economies, projecting a growth rate of 7.5 percent in 2016. It said that India's growth is expected to strengthen from 7.3 percent this year and last year to 7.5 percent next year. Growth will benefit from recent policy reforms, a consequent pickup in investment, and lower commodity prices. The IMF’s forecast for 2020 sees India occupying the top slot among major economies with a growth rate of 7.7%. Though, IMF has pegged its estimate at 7.3% this year, that's lower than the 7.5% forecast in the July 2015 World Economic Outlook (WEO) Update.

The IMF has also said that India's near-term growth prospects remain favourable. The narrowing of the current account deficit has lowered external vulnerabilities while the faster-than-expected decline in inflation has created space for interest-rate reductions. It expects inflation to decline further in 2015 because of the drop in global oil and agricultural commodity prices. The IMF called for continued fiscal consolidation but urged that it should be more growth friendly, tied to tax reform and lower subsidies.

On the other hand, the fund has cut its global growth forecasts for a second time this year, citing weak commodity prices and a slowdown in China and warned that policies aimed at increasing demand were needed. The downgrades come after central banks in major industrial economies have cut rates to near zero and spent around $7 trillion in quantitative easing programs in the seven years since the global financial crisis. IMF ahead of its annual meet in Peru has forecast that the world economy would grow at 3.1 percent this year and by 3.6 percent in 2016. Both new forecasts are 0.2 percentage point below its July forecast and are 0.4 percentage point and 0.2 percentage point below its April outlook, respectively.

Among major economies, the IMF has said that United States is expected to grow by 2.6 percent in 2015 and by 2.8 percent in 2016, the Eurozone is forecast to grow by 1.5 percent and 1.6 percent, respectively, with Japan seen at 0.6 percent and 1.0 percent. The Fund sees growth in China slowing to 6.8 percent this year and 6.3 percent in 2016. The biggest hit to growth will come in emerging economies where the IMF has cut its growth forecast to 4 percent in 2015, due to a sharp slide in commodity prices.

The CNX Nifty is currently trading at 8164.10, up by 11.20 points or 0.14% after trading in a range of 8132.90 and 8170.25. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 5.10%, ONGC up by 2.83%, Vedanta up by 1.87%, Maruti Suzuki up by 1.49% and Asian Paints up by 1.45%. On the flip side, Wipro down by 1.39%, Hero MotoCorp down by 1.31%, HCL Tech. down by 1.15%, ICICI Bank down by 1.10% and Bharti Airtel down by 0.96% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI increased 3.27 points or 0.2% to 1,665.78, KOSPI Index increased 10.96 points or 0.55% to 2,001.61, Straits Times increased 12.96 points or 0.45% to 2,910.37, Jakarta Composite increased 30.5 points or 0.69% to 4,476.28, Taiwan Weighted increased 61.56 points or 0.73% to 8,455.66 and Hang Seng increased 224.32 points or 1.03% to 22,055.94.On the flip side, Nikkei 225 decreased 132.93 points or 0.73% to 18,053.17.