Benchmarks end choppy day of trade with marginal losses

Tuesday’s trading session turned out to be a choppy day of trade for Indian equity benchmarks where key indices ended with marginal losses. Buying in last leg of trade mainly prevented a down day of trade at Dalal Street as markets for couple of times surrendered to selling pressure. Sentiments remained down beat after India’s retail inflation based on the consumer price index (CPI) for September increased to 4.41%, from 3.74% recorded for the previous month, on the back of higher food prices. Investors also remained on sidelines ahead of the September quarter results of IT-major Tata Consultancy Services (TCS), which is set to announce later today.

However, downside remained capped with the report that Centre and States have completed the drafting of model Goods and Services Tax law as well as an integrated-GST or iGST law, which will be put up in public domain by early November and the Empowered Committee of state Finance Ministers is likely to meet this month to discuss the legislations -- CGST, SGST and iGST. Some support came in with report that Industrial Production grew by 6.4% for the month of August, an improvement over the 4.2% growth registered in the previous month of June.

Global cues too remained sluggish with European counters making weak start and CAC, DAX and FTSE were trading with a cut of around a percent in early deals, led by the drop in commodity stocks after the International Energy Agency said that global oil markets will remain oversupplied next year. Asian markets ended mostly in red after Chinese trade data signalled weakening global and domestic demand, the latest evidence that the world’s second largest economy is stalling.

Back home, depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 65.11 per dollar at the time of equity markets closing compared with its previous close of 64.75. Selling in software space too weighed on sentiments as investors eying TCS’ Q2 numbers. It is being expected that India's biggest outsourcer will post a 3.6 per cent sequential growth in dollar revenues. Traders will be eyeing the management commentary for the second half as it is traditionally a weaker period for IT companies.

Telecom stocks remained in limelight after, DoT released Spectrum Trading norms. It permitted Spectrum trading in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands and said that spectrum trading shall only be allowed between two access service providers and bands earmarked for access services by licensor to be called tradable bands. Though, DoT has not permitted spectrum leasing.

The NSE’s 50-share broadly followed index Nifty declined by over ten points to end below the psychological 8,150 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around sixty points to end below its crucial 26,900 mark. Broader markets however, managed to end the session marginally in green. The market breadth remained in favor of advances, as there were 1,538 shares on the gaining side against 1,229 shares on the losing side while 106 shares remain unchanged.

Finally, the BSE Sensex declined by 57.58 points or 0.21% to 26846.53, while the CNX Nifty lost 11.90 points or 0.15% to 8131.70.

The BSE Sensex touched a high and a low 26918.52 and 26719.10, respectively. The BSE Mid cap index was up by 0.02%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Realty up by 1.31%, Power up by 0.29%, FMCG up by 0.14%, Metal up by 0.08% and Auto up by 0.02%, while IT down by 1.03%, TECK down by 0.87%, Oil & Gas down by 0.56%, Capital Goods down by 0.21% and PSU down by 0.19% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.79%, BHEL up by 1.39%, Bajaj Auto up by 1.30%, Maruti Suzuki up by 1.02% and ITC up by 0.98%. On the flip side, ONGC down by 3.49%, Hindalco down by 2.99%, Vedanta down by 2.80%, Tata Steel down by 2.37% and Infosys down by 2.12% were the top losers.

Meanwhile, security and Exchange Board of India (SEBI) Chairman UK Sinha has asserted that curbing black money or collecting revenue is not the primary responsibility of SEBI, there are agencies in the country who are being paid for this job. SEBI’s job is to protect the interest of investors and curb manipulation in the market. It has from time-to-time passed on information to the concerned authorities to clamp down on such illegal activities.

Sinha further said that there have been rising concerns over illegal fund flows in the system and there have been instances that came to the notice of SEBI where stock market was used to carry out illicit money transactions. He highlighted that SEBI started surveillance system on its own, pointing out an instance in the past there where change in the unique plan code was being used to manipulate and evade tax and said that the SEBI took action on frequent changes in the unique plan code and also passed on the information to tax authorities.

Talking about Participatory Notes (PNs) which are being misused, Sinha said the regulator has all the data about entities who are using PNs, who can issue it, who can subscribe to it, all that is very well documented. Furthermore, he noted that people are perhaps missing out that there is a huge difference in participatory notes system today from that of 3-4 years back.

The CNX Nifty touched a high and low 8150.25 and 8088.60 respectively.

The top gainers on Nifty were Ultratech Cement up by 1.94%, Coal India up by 1.75%, Bajaj Auto up by 1.75%, BPCL up by 1.59% and Yes bank up by 1.39%. On the flip side, Idea Cellular down by 3.80%, ONGC down by 3.55%, Hindalco down by 2.99%, Vedanta down by 2.98% and HCL down by 2.82%, were the top losers.

European Markets were trading in the red; France’s CAC was down by 1.55%, Germany’s DAX was down by 1.15% and UK's FTSE was down by 0.77%.

The Asian equity markets ended mostly in red on Tuesday, after Chinese trade data signaled weakening global and domestic demand, the latest evidence that the world’s second largest economy is stalling. Japanese Finance Minister Taro Aso stated that the economy is clearly in recovery as corporate profits are at a record high and wages are rising. Aso hopes private-sector companies understand the need to invest their large cash reserves by raising capital expenditure or workers’ salaries. Japanese Household Confidence rose to a seasonally adjusted annual rate of 40.6, from 41.7 in the preceding month. China may cut its GDP growth target to 6.5 percent from the present seven percent in its next five-year plan in view of the continued slowdown of the world’s second largest economy. Chinese imports slumped by nearly 18 percent year-on-year in September, in the latest poor figures from the world’s second-largest economy. The country has also been hit by falling demand in some key markets for its manufactured goods, and September exports slipped by 1.1 percent to 1.30 trillion yuan. The trade surplus for the month nearly doubled to 376.2 billion yuan.