Markets trades marginally in red in early noon session

Indian equity markets erasing early gains are trading marginally in red in early noon session, due to profit-booking by investors after recent gains amid weak Asian cues. The sentiments were under pressure after Reserve Bank Governor Raghuram Rajan said that the country cannot have a GDP growth of 9 per cent until it makes 'tremendous investments' and improves supply situation that boosts demand, he also warned against populist policies. 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, there was some support with the monthly SBI Composite Index stating 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.

On the global front, Asian markets were trading mixed, after commodity prices languished in the wake of China growth woes. Back home, in scrip specific development, share of Hindustan Zinc was trading higher after the company reported a 5 per cent growth in its net profit at Rs 2,285.26 crore for the quarter ended September 30, 2015 helped by volume growth and cost optimization. 

The market breadth on BSE was positive, out of 2534 stocks traded, 1455 stocks advanced, while 921stocks declined on the BSE.

The BSE Sensex is currently trading at 27347.20, down by 17.72 points or 0.06% after trading in a range of 27323.45 and 27413.44. There were 11 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.62%, while Small cap index gained 0.60%.

The top gaining sectoral indices on the BSE were Power up by 1.63%, Consumer Durables up by 1.16%, IT up by 0.73%, Auto up by 0.66% and Capital Goods up by 0.65%, while Metal down by 0.97%, Oil & Gas down by 0.33%, FMCG down by 0.22%, Realty down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.48%, TCS up by 1.22%, NTPC up by 0.94%, Infosys up by 0.70% and Lupin up by 0.56%. On the flip side, Cipla down by 3.09%, Vedanta down by 2.36%, Hindalco down by 1.56%, ONGC down by 1.16% and Hindustan Unilever down by 0.95% 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 8272.05, down by 3.00 points or 0.04% after trading in a range of 8258.40 and 8290.00. There were 24 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 3.02%, Tata Motors up by 2.53%, Power Grid up by 1.87%, PNB up by 1.60% and TCS up by 1.22%. On the flip side, Cipla down by 3.39%, Vedanta down by 2.03%, Hindalco down by 1.90%, Cairn India down by 1.44% and Adani Ports &Special down by 1.43% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 9.51 points or 0.47% to 2,039.78, Jakarta Composite increased 21.09 points or 0.46% to 4,590.94, Taiwan Weighted increased 22.1 points or 0.26% to 8,653.60 and Nikkei 225 increased 66.26 points or 0.37% to 18,197.49, while Hang Seng decreased 154.69 points or 0.67% to 22,920.92, FTSE Bursa Malaysia KLCI decreased 4.41 points or 0.26% to 1,713.79 and Shanghai Composite decreased 2.28 points or 0.07% to 3,384.42.