Benchmarks trim losses; trade continues in red

Indian equity markets trimmed their losses and continue to trade weak in the late morning session on account of selling in frontline blue chip counters. Sentiments remained subdued after IT giant TCS Q2 results missed the street expectations following the IT bell weather Infosys indicating tough times in the latter half of the financial year for Indian IT companies. To add to the woes of the investors, Asian peers were showing weakness tracking losses on the Wall Street as the drop in crude prices along with the consumer price data from China. However, the downfall is arrested with Finance Finance Minister Arun Jaitley’s statement that reform measures would continue in order to boost economic activity. Also, Minister of State for Finance Jayant Sinha, allaying concerns of investors over pace of reforms in India has said the government has implemented “game- changing” measures to transform India's economic fortunes and improve the business environment in the country. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 272.61 crore on October 13, 2015.

On the global front, Asian markets declined in early trade, as Chinese factory-gate prices equaled their biggest slump since the global financial crisis. Faced with concerns about a global slowdown, the Monetary Authority of Singapore said that it will ease its monetary policy for the second time this year by slowing the pace of the Singapore dollar's appreciation. Overnight, US stocks closed in the red snapping the seven day uptrend. Decline in oil prices and further indications of slowdown in the Chinese economy weighed on the investor sentiments.  Back home, Indian rupee recovered by 9 paise to 65.09 against the dollar in early trade on fresh selling of the US currency by exporters and banks.

Back on street, stocks from Metal, Realty and Capital Goods counters were supporting the markets’ uptrend, while those from Auto, Consumer Durables and IT counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Indiabulls Real Estate have surged after the report that the company is looking to sell its stake in a property in London, which is acquired last year. On the flip side, Shares of private sector lender DCB Bank have declined after the bank posted 10% drop in the net profit from Rs 41 crore in Q2 FY15 to Rs 37 crore in the Q2 FY16 on the back of higher provisioning and tax expenses.

The market breadth on BSE was positive, out of 2268 stocks traded, 1362 stocks advanced, while 796 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26836.22, down by 10.31 points or 0.04% after trading in a range of 26713.28 and 26869.08. 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 0.05%, while Small cap index up by 0.53%.

The top gaining sectoral indices on the BSE were Metal up by 1.28%, Realty up by 0.96%, Capital Goods up by 0.25%, Power up by 0.24% and PSU up by 0.20%, while Auto down by 0.47%, Consumer Durables down by 0.34%, IT down by 0.31%, TECK down by 0.26% and FMCG down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 4.48%, Vedanta up by 3.39%, Tata Steel up by 2.49%, Infosys up by 1.19% and SBI up by 1.07%. On the flip side, TCS down by 3.67%, Tata Motors down by 1.93%, ICICI Bank down by 1.29%, Cipla down by 1.16% and Hero MotoCorp down by 1.06% were the top losers.

Meanwhile, encouraged by the almost three years high industrial production data in August, the Finance Ministry has said that reform measures would continue in order to boost economic activity. Economic Affairs Secretary Shaktikanta Das said that 'Improved IIP numbers are encouraging. Reform measures will continue. GST and Bankruptcy law are on top of reform agenda.'

The finance ministry has said that latest data for Index of Industrial Production (IIP) and Consumer Price Index (CPI)-New Series points at steady improvement in the Indian economy. It said that Industrial growth data is a reflection of recovery in the economy, predominantly led by domestic demand as the external sector environment continues to be sluggish.

Industrial output rose to nearly three-year high of 6.4 percent in August on improvement in manufacturing and capital goods, the more than 6% growth in IIP came after 34 months. Cumulative IIP growth in the first five months in 2015-16 at 4.1% was better than the growth of 3% in the same period last year.

The manufacturing sector grew at 6.9% in August spearheading the industrial production growth. The double digit growth in capital goods of 21.8% and consumer durables of 17% in August 2015 was helped by a favourable base effect, implying improvement in investment and consumption demand.

The CNX Nifty is currently trading at 8128.85, down by 2.85 points or 0.04% after trading in a range of 8096.35 and 8139.30. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.41%, Vedanta up by 3.48%, Tata Steel up by 2.82%, ACC up by 1.31% and Infosys up by 1.11%. On the flip side, TCS down by 3.68%, Zee Entertainment down by 1.99%, Tata Motors down by 1.65%, Hero MotoCorp down by 1.40% and ICICI Bank down by 1.36% were the top losers.

Asian markets were trading in red, Nikkei 225 was down by 2.03%, Hang Seng was down by 0.84%, Taiwan Weighted down by 0.38%, KOSPI Index down by 0.58% and Shanghai Composite was down by 0.01%.