Markers trade slightly in red in early deals

Indian equity markets are trading flat with negative bias in early deals on Tuesday, as traders booked some profits after three days of rally. Further, the sentiments were down by Indian rupee depreciating 15 paise to 64.95 against the US dollar in early trade. Meanwhile, Standard & Poor’s (S&P) has retained India’s rating at ‘BBB-’ with stable outlook, the lowest investment grade for India thus dashing the government’s hope for a rating upgrade for at least for two years - this year and the next. However, losses remained capped with the monthly SBI Composite Index stated that country's manufacturing sector growth improved in October largely driven by the manufacturing sector, but mining and electricity are still acting as a drag on the economic activity. Traders were seen piling up positions in IT, Consumer Durables, Power, TECK and Capital Goods, while selling was witnessed in Metal, Oil & Gas, Bankex, FMCG and PSU.

In the scrip specific development, Deep Industries rallied 6% to Rs 205, also its 52-week high on the BSE, after foreign fund house Swiss Finance Corporation (Mauritius) bought stake in the company from the open market.

On the global front, the US markets ended marginally higher as investors were cautious at the start of a heavy week of earnings, but advances in top tech names gave some support. The Asian markets were exhibiting a mixed trend on Tuesday amid continuing worries about China's slowing economy, while weak commodity prices weighed on resources stocks.

Closer home, the NSE Nifty and BSE Sensex were trading below the psychological 8,300 and 27,350 levels respectively. The market breadth on BSE was positive in the ratio of 1038: 605 while 91 scrips remained unchanged. 

The BSE Sensex is currently trading at 27335.37, down by 29.55 points or 0.11% after trading in a range of 27332.77 and 27409.45. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index gained 0.40%.

The top gaining sectoral indices on the BSE were IT up by 0.89%, Consumer Durables up by 0.68%, Power up by 0.59%, TECK up by 0.57% and Capital Goods up by 0.47%, while Metal down by 0.77%, Oil & Gas down by 0.28%, Bankex down by 0.23%, FMCG down by 0.16% and PSU down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.74%, TCS up by 1.21%, Lupin up by 0.94%, BHEL up by 0.89% and Infosys up by 0.84%. On the flip side, Cipla down by 1.98%, Hindalco down by 1.74%, Vedanta down by 1.57%, ONGC down by 1.40% and Hero MotoCorp down by 0.81% were the top losers.

Meanwhile, global rating agency Standard and Poor’s (S&P’s) don’t seems to be much convinced by the government’s argument that India deserves a stronger rating after efforts to keep historically high fiscal deficits in check and to improve economic fundamentals, as the rating agency has kept India's sovereign rating at the lowest investment grade of 'BBB-minus' and a 'stable' outlook, saying factors such as its sound external position were offset by low income and weak public finances.

It said that “We are affirming our 'BBB-' long-term and 'A-3' short- term sovereign credit ratings on India,' and added that the stable outlook balances India's sound external position and inclusive policymaking traditions against the vulnerabilities stemming from its low per capita income and weak public finances.

However, it added that upward pressure on the ratings could build if the government's reforms markedly improve its general government fiscal outturns and with them the level of net general government debt so that it falls below 60 percent of GDP. On the same time it also cautioned that downward pressure on the ratings could reemerge if growth disappoints (perhaps as a result of stalling of reforms), if, 'contrary to our expectations, the new monetary council is not effective in achieving its targets, or if the external liquidity position of the nation deteriorates more than we currently expect'.

The agency expects India's economy to grow 7.4 percent this year and average 'just under' 8 percent from 2015 to 2018, but sees ratings constrained by low per capita income, of $1,700 this year. 'BBB' is the lowest investment grade rating and stable outlook reduces risk of possible sovereign rating downgrade.

The CNX Nifty is currently trading at 8261.60, down by 13.45 points or 0.16% after trading in a range of 8258.40 and 8282.35. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.56%, Tata Power up by 1.51%, TCS up by 1.21%, HCL Tech. up by 0.85% and Infosys up by 0.82%. On the flip side, Cipla down by 3.47%, Hindalco down by 1.96%, Vedanta down by 1.53%, Adani Ports &Special down by 1.18% and ONGC down by 1.14% were the top losers.

Asian markets were trading mixed, Taiwan Weighted increased 1.11 points or 0.01% to 8,632.61, KOSPI Index increased 5.1 points or 0.25% to 2,035.37, Jakarta Composite increased 20.06 points or 0.44% to 4,589.91and Nikkei 225 increased 55.12 points or 0.3% to 18,186.35.

On the flip side, Hang Seng decreased 101.97 points or 0.44% to 22,973.64, FTSE Bursa Malaysia KLCI decreased 3.82 points or 0.22% to 1,714.38 and Shanghai Composite decreased 2.95 points or 0.09% to 3,383.75.