Benchmarks trade flat with positive bias in early deals on Monday

After making a gap-up opening, Indian equity markets have pared almost their early gains, and are now trading near neutral line with positive bias, after the announcement of Infosys’s second quarter numbers. Though, the company reported 87.40% rise in its net profit at Rs 6306 crore for the quarter ended September 30, 2015, it announced the downward revision of its full-year revenue. The company said that for the fiscal year ending March 31, 2016, revenues are likely to rise by 6.4% - 8.4%, down from a previous estimate of 7.2% - 9.2% in dollar terms. Further, cautiousness also prevailed  in the markets ahead of the announcement of consumer price index (CPI) data for the month of September 2015  and  the industrial production data for August 2015 after market hours today. However, traders were getting encouragement with Chief Economic Advisor Arvind Subramanian’s statement that growth in collection of indirect taxes in the first half of the current fiscal shows robust GDP expansion. Indirect tax collection increased 35.8 percent in the April-September period of the 2015-16 fiscal to Rs 3.24 lakh crore.

In the scrip specific development, Bank of Baroda dipped 8% on the BSE in early morning trade on reports that the Central Bureau of Investigation (CBI) on Saturday carried out searches at the bank’s branches in New Delhi for alleged foreign exchange violations.

On the global front, The US markets ended higher on Friday. The Asian markets were trading in green following the modest gains on Wall Street Friday amid optimism that the U.S. Federal Reserve may not raise interest rates until early 2016. Higher commodity prices also boosted investor sentiment.

Closer home traders were seen piling up position in Metal, Auto, Oil & Gas, Capital Goods and Power, while selling was witnessed in IT, TECK and Realty. The market breadth on BSE was positive in the ratio of 849: 715 while 66 scrips remained unchanged. 

The BSE Sensex is currently trading at 27115.29, up by 35.78 points or 0.13% after trading in a range of 27024.91 and 27305.04. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.08%, while Small cap index down by 0.02%.

The top gaining sectoral indices on the BSE were Metal up by 1.46%, Auto up by 0.52%, Oil & Gas up by 0.49%, Capital Goods up by 0.38% and Power up by 0.25%, while IT down by 1.43%, TECK down by 1.07% and Realty down by 0.62% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 5.26%, Hindalco up by 2.09%, Tata Steel up by 1.42%, ONGC up by 1.24% and Tata Motors up by 1.15%. On the flip side, Infosys down by 3.25%, Cipla down by 0.70%, HDFC down by 0.29%, SBI down by 0.29% and Maruti Suzuki down by 0.25% were the top losers.

Meanwhile, after projecting Indian growth in current year to 7.3 percent, slightly lower from 7.5 percent forecasted in the 2015 April  at WEO, the International Monetary Fund (IMF) has recommended the country to launch next phase of economic reforms and improve its business climate for achieving faster and more inclusive growth.

IMF has said that in India, while several policy actions have been taken recently, further steps in relaxing longstanding supply bottlenecks, especially in the energy, mining, and power sectors, as well as labour and product market reforms, and improving the business climate are crucial to achieving faster and more inclusive growth. It said that the growth recovery has continued, supported by a pickup in domestic demand, on the back of strengthening industrial production and fixed investment.

It further added that the ongoing economic recovery is underpinned by robust domestic demand and with the revival of consumer and business sentiment; the incipient recovery of investment is expected to contribute more to growth going forward. Though, it also said that although lower oil prices are supportive of domestic demand, weakened exports as well as headwinds from weaknesses in India’s corporate and bank balance sheets will weigh on the economy.

Earlier, in its Asia and Pacific Regional Economic Outlook Update released in Peru, Lima on the sidelines of the annual fall meeting of the IMF and World Bank, the IMF had projected a slight drop in India's growth rate from 7.5 percent to 7.3 percent in 2015 and maintained the same growth rate of 7.5 percent for 2016 as it projected in this previous report in April.

The CNX Nifty is currently trading at 8203.10, up by 13.40 points or 0.16% after trading in a range of 8171.95 and 8244.50. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 5.31%, Hindalco up by 1.55%, Tata Steel up by 1.51%, ONGC up by 1.16% and Cairn India up by 1.10%. On the flip side, Bank of Baroda down by 4.94%, Infosys down by 3.07%, PNB down by 1.34%, Cipla down by 0.92% and HCL Tech. down by 0.61% were the top losers.

Asian markets were trading in green, KOSPI Index increased 6.94 points or 0.34% to 2,026.47, Jakarta Composite increased 44.51 points or 0.97% to 4,633.86, Shanghai Composite increased 107.47 points or 3.38% to 3,290.62, Taiwan Weighted increased 117.49 points or 1.39% to 8,563.45, Hang Seng increased 316.76 points or 1.41% to 22,775.56 and FTSE Bursa Malaysia KLCI decreased 3.68 points or 0.22% to 1,702.86.