Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors indulged in booking profits at prevailing levels. Sentiments remained down-beat on the Crisil’s research report that Indian Inc is expected to report single-digit growth in revenues for the fifth consecutive quarter. This is mainly because of fragile consumption demand, especially in the rural areas, weakness in investment-linked sectors, and the meltdown in global commodity prices. Beside, mixed trend in Asian stocks coupled with depreciation in rupee also weighed on the sentiment. Meanwhile, some investors remained on the sidelines and refrained from any buying activity ahead of September earning season due to kick-off next week.

On the global front, Asian markets trading mixed, with mainland Chinese markets returning to the fray after missing the global equity rally due to a week-long holiday. Chinese shares surged as dealers returned from a week-long break that saw a global advance, but a regional rally faded as some investors took their cash off the table. Overnight US Markets closed with smart gains after data showed that US consumer borrowing advanced at a solid pace in August, as Americans took out more auto and student loans. Back on street, stocks from Realty, Metal and IT counters were supporting the markets’ uptrend, while those from FMCG, Banking and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of Man Industries have surged after the company has received orders worth approximately Rs 700 crore from international and domestic customers for supply of pipes for oil, gas and water sector projects. Further, Shares of Genesys International Corporation have rallied after the company announced that Quikr, an online cross-category classifieds company, is making an investment in Genesys' venture A.N.Virtual World Tech.

The market breadth on BSE was negative, out of 2220 stocks traded, 1113 stocks advanced, while 1004 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26949.53, down by 86.32 points or 0.32% after trading in a range of 26910.19 and 27120.11. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mix; the BSE Mid cap index was down by 0.22%, while Small cap index up by 0.07%.

The top gaining sectoral indices on the BSE were Realty up by 0.60%, Metal up by 0.60%, IT up by 0.43%, PSU up by 0.38% and TECK up by 0.19%, while FMCG down by 0.73%, Bankex down by 0.41%, Capital Goods down by 0.26%, Auto down by 0.19% and Oil & Gas down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 1.83%, Vedanta up by 1.82%, Tata Steel up by 1.73%, BHEL up by 1.13% and Wipro up by 0.97%. On the flip side, ITC down by 1.99%, Lupin down by 1.48%, Bharti Airtel down by 1.40%, NTPC down by 0.90% and ICICI Bank down by 0.81% were the top losers.

Meanwhile, in order to target the companies that are aligned with the India growth story for fetching foreign funds, Finance Ministry is looking to tweak the disinvestment strategies and wants to bring in front of the queue the companies particularly in the sectors such as infrastructure and defence where a substantial amount of foreign investment is expected.  Further the government may defer divestments in struggling sectors such as metals and commodities commanding poor valuations due to China slowdown, as the government looks to raise a record amount from disinvestment this year. 

Economic affairs secretary Shaktikanta Das recently said that an internal strategy for disinvestment has been discussed and the government will maximize the disinvestments receipts for the current financial year. Firms such as Engineers India Ltd (EIL), Bharat Electronics Ltd (BEL) and Container Corp. of India (Concor) are likely to be advanced on divestment schedule.

Reportedly the department of disinvestment had bundled stocks of 10 state runs firms into two baskets and asking the merchant bankers to bid for managing the share sale of all the companies in a group. The first basket includes Oil India, Concor, National Mineral Development Corporation (NMDC), Metals and Minerals Trading Corporation of India (MMTC) and India Tourism Development Corporation (ITDC) where the government has not yet appointed merchant banker. However, the second basket comprises of NTPC, EIL, BEL, National Aluminium Co (Nalco) and Hindustan Copper where merchant bankers have been appointed.

The government has started the road shows for four foreign locations which includes US and Britain, with the aim to attract buyers for the proposed disinvestment powers for India’s largest utility National Thermal Power Corporation Limited (NTPC) and defence company BEL. Under the road show the government could raise around Rs 5,300 crore from a 5 per cent stake sale in NTPC at current valuations. A 5 per cent stake sale in Concor and BEL may fetch a total of around Rs 3,000 crore.

The government's holdings in Concor and BEL are 61 are 61.79 per cent and 75.02 per cent, respectively.

The CNX Nifty is currently trading at 8156.25, down by 21.15 points or 0.26% after trading in a range of 8141.75 and 8196.75. There were 26 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 2.12%, Tata Steel up by 1.90%, Vedanta up by 1.82%, PNB up by 1.66% and Hindalco up by 1.65%. On the flip side, ITC down by 2.30%, Lupin down by 1.60%, Idea Cellular down by 1.57%, Bharti Airtel down by 1.28% and ICICI Bank down by 0.94% were the top losers.

Asian markets were trading mixed, FTSE Bursa Malaysia KLCI was up by 0.27%, Jakarta Composite up by 0.39% and Shanghai Composite was up by 3.8%. On the flip side Nikkei 225 was down by 0.98%, Hang Seng down by 0.69%, Taiwan Weighted down by 0.64%, Straits Times down by 0.32% and KOSPI Index down by 0.06%.