Benchmarks erase gains; Metal, Realty drag

Indian equity markets erased gains and started trading in red in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were under pressure after global rating agency Standard and Poor’s ruled out any rating upgrade for India, though it said that improvement in policy making have raised the country’s prospect for economic and fiscal performance. The rupee depreciated against the US dollar in early trade in line with most other Asian currencies, as currency markets across the globe await a speech by the US Federal Reserve chair Janet Yellen scheduled later in the day, further added some selling pressure. Traders were seen piling position in Power, Consumer Durables and IT stocks, while selling was witnessed in Metal, Realty and Oil & Gas sector stocks. In the scrip specific development, Gati was trading under pressure on back of disappointing September quarter numbers. The company reported 16.4 percent drop in consolidated net profit at Rs 5.79 crore for the quarter ended September 30.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,300 and 27,400 levels respectively. The market breadth on BSE was positive in the ratio of 1457:1155 while 185 scrips remained unchanged.

The BSE Sensex is currently trading at 27321.47, down by 43.45 points or 0.16% after trading in a range of 27298.98 and 27432.07. There were 7 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index up by 0.20%.

The gaining sectoral indices on the BSE were Power up by 1.44%, Consumer Durables up by 0.63%, IT up by 0.60%, Auto up by 0.56% and TECK up by 0.34%, while Metal down by 1.03%, Realty down by 0.56%, Oil & Gas down by 0.50%, Capital Goods down by 0.15% and FMCG down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.38%, TCS up by 1.03%, NTPC up by 0.98%, Infosys up by 0.61% and GAIL India up by 0.60%.

On the flip side, Vedanta down by 3.37%, Cipla down by 2.45%, Mahindra & Mahindra down by 1.59%, Tata Steel down by 1.51% and Hindalco down by 1.45% were the top losers.

Meanwhile, ratings agency, CARE Ratings in its report “Revised Prognosis for Indian Economy” has downgraded India's GDP forecast to 7.5-7.6% for the financial year 2015-16 from its earlier estimate of 7.8-8%. The cut in forecast takes into account global developments like China’s slowdown, Chinese Yuan devaluation, Fed impending rate hike, 16 percent deficient monsoon and low capital utilization.

The report stated that the global growth has lowered down and the initial anticipated growth is unlikely to materialize. In particular, China has slowed down and the prospects do not look too encouraging. China had devalued the Yuan which had an impact on various currencies, viz. the emerging and developing economy currencies, which also declined in harmony.

Besides, the report also factors in downbeat agriculture production which is pegged around a low of 0.5-1% this year assuming a normal Rabi crop that may compensate for the slippage in kharif crop output. The first advance estimates for kharif crop indicate a shortfall in case of food grains and cotton besides sugarcane. Industry has shown signs of pickup with industrial production up by 4.1% in the first five months though a clearer picture will emerge in the second half. However, the report states that it is the government's disinvestment target that could pose to be major risk for its fiscal position. The government has a target of Rs 69,500 crore and till August it has achieved Rs 13,000 crore .

Care Ratings further states that even as ratings agencies continue to cut India's GDP forecast, the government is following the fiscal consolidation road map and maintain that India will grow in excess of 7.5% in FY16 on the back of positive macroeconomic indicators such as declining inflation, Indirect tax revenues which are showing a positive trend and CAD which is under control.

The CNX Nifty is currently trading at 8258.35, down by 16.70 points or 0.20% after trading in a range of 8252.40 and 8294.05. There were 19 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 2.95%, Tata Motors up by 2.28%, Power Grid Corporation of India up by 1.61%, TCS up by 1.09% and NTPC up by 1.06%.

On the flip side, Vedanta down by 3.33%, Cairn India down by 2.72%, Cipla down by 2.67%, Hindalco down by 1.84% and Adani Ports & Special down by 1.73% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 9.09 points or 0.45% to 2,039.36, Taiwan Weighted increased 22.1 points or 0.26% to 8,653.60, Jakarta Composite increased 28.5 points or 0.62% to 4,598.34, Shanghai Composite increased 38.63 points or 1.14% to 3,425.33 and Nikkei 225 increased 75.92 points or 0.42% to 18,207.15.

On the other hand, Hang Seng decreased 86.39 points or 0.37% to 22,989.22 and FTSE Bursa Malaysia KLCI decreased 14.76 points or 0.86% to 1,703.44.

The European markets were trading in red; Germany’s DAX decreased 44.94 points or 0.44% to 10,119.37, France’s CAC decreased 35.59 points or 0.76% to 4,668.48 and UK’s FTSE 100 decreased 21.31 points or 0.34% to 6,331.02.