Markets erase all gains to trade marginally in red

Indian equity benchmarks have erased all the early gains and are trading marginally in red in early noon session, on back of selling in frontline blue chip counters. The sentiments were under pressure with the report that India is expected to clock 7.4 per cent growth rate this fiscal with a downside risk amid weak exports, slow pace of structural reforms and investment spending. Depreciation in Indian rupee against dollar also weighed down sentiments. The rupee depreciated by 14 paise to 64.97 against the US currency in early trade on Monday due to strong demand for the dollar from importers. The market is likely to remain volatile as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. October 2015 series to next month i.e. November 2015 series. The near month October 2015 derivatives contracts will expire on Thursday i.e. October 29, 2015.

On the global front, Asian markets were trading mostly in green, after another rate cut in China fueled risk appetite which were already given a boost by hints of further stimulus from the European Central Bank (ECB) last week. Back home, in scrip specific development, share of Asian Paints was trading down by 4.52% after the company reported a lower than expected 15% YoY rise in consolidated net profit at Rs 399 crore for the quarter ended September 30, 2015 (Q2), due to single digit growth in net sales.

The market breadth on BSE was negative, out of 2438 stocks traded, 874 stocks advanced, while 1456 stocks declined on the BSE.

The BSE Sensex is currently trading at 27442.65, down by 28.16 points or 0.10% after trading in a range of 27420.56 and 27618.14. There were 15 stocks advancing against 14 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.36%, while Small cap index down by 0.48%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.89%, Auto up by 0.57%, Power up by 0.16% and FMCG up by 0.15% while, Oil & Gas down by 0.93%, PSU down by 0.65%, Realty down by 0.62%, Metal down by 0.45% and Bankex down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.93%, Bajaj Auto up by 2.11%, Vedanta up by 1.61%, Maruti Suzuki up by 1.43% and Larsen & Toubro up by 1.06%. On the flip side, Bharti Airtel down by 2.12%, Coal India down by 1.79%, ONGC down by 1.11%, Reliance Industries down by 0.93% and Cipla down by 0.76% were the top losers.

Meanwhile, amid the skyrocketing retail prices of pulses and fear of spurt back in inflation, an Assocham study has stated that Inflation may have dropped significantly from last year, but most Indians still find prices of goods and services consumed on a daily basis growing beyond their comfort level.

The industry body in its study has said that despite fuel prices coming down and moderate rise in wages, the cost of education and health services, the two critical areas of interest to the middle class has gone up, much higher than the headline number of CPI for September of 4.41%. It noted that the CPI inflation for education was up close to 6 per cent and health 5.4 per cent for September, 2015. “With severe shortages of education and health facilities in the public sector, the middle class has to depend on the private sector schools, colleges and hospitals and their costs have become quite high.

The chamber's study showed that other items of use for the middle-class, like meat, fish, milk and milk products, have also seen significant price increase between 5 and 5.5 per cent.Assocham has further stated that 'While the RBI has in the last instance reduced the policy rate by 50 basis points, the average transmission is not above 30 bps despite so much of prodding by the government and the Reserve Bank of India (RBI)”.

Assocham Secretary General D S Rawat said that 'While the annual increase in prices of these services may not show huge rise, the base price of such facilities is so high that it is becoming increasingly difficult for a large number of people in cities and small towns to afford them.' He suggested that public expenditure on health and education be raised significantly, both at the Central and state government levels.

The CNX Nifty is currently trading at 8278.60, down by 16.85 points or 0.20% after trading in a range of 8272.05 and 8336.30. There were 21 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.91%, Bajaj Auto up by 2.01%, Vedanta up by 1.57%, HCL up by 1.47% and Maruti Suzuki up by 1.39%. On the flip side, Asian Paints down by 4.46%, Coal India down by 2.06%, Bharti Airtel down by 2.03%, Yes Bank down by 1.80% and Cairn India down by 1.61% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 3.73 points or 0.18% to 2,044.13, Shanghai Composite increased 33.64 points or 0.99% to 3,446.08, Jakarta Composite increased 35.66 points or 0.77% to 4,688.81, Hang Seng increased 36.26 points or 0.16% to 23,188.20, Taiwan Weighted increased 71.55 points or 0.82% to 8,745.36 and Nikkei 225 increased 156.84 points or 0.83% to 18,982.14, while FTSE Bursa Malaysia KLCI decreased 2.13 points or 0.12% to 1,708.80.