Benchmarks continue to trade choppy in noon deals

Indian equity benchmarks continue to trade choppy in noon deals with frontline gauges trading tad below their neutral lines as investors remained on sidelines ahead of derivatives expiry later this week and US Federal Reserve Meeting, which is scheduled to start from tomorrow. Depreciation in Indian rupee too weighed down sentiments. The rupee depreciated by 16 paise to 64.99 against the US currency in early trade today due to strong demand for the dollar from importers. Some cautiousness also crept in, as an Assocham study has said 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.

On the global front, Asian markets were trading mostly in green after China unexpectedly cut interest rates and lenders’ reserve requirements to support its ailing economy. Back home, on the sectoral front, capital goods, auto and power witnessed the maximum gain in trade, while fast moving consumer oil and gas, metal and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 919 shares on the gaining side against 1,532 shares on the losing side while 126 shares remain unchanged.

The BSE Sensex is currently trading at 27454.56, down by 16.25 points or 0.06% after trading in a range of 27420.56 and 27618.14. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.27%, while Small cap index down by 0.39%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.96%, Auto up by 0.42%, Power up by 0.35%, IT up by 0.15% and FMCG up by 0.10% while, Oil & Gas down by 0.69%, Metal down by 0.57%, PSU down by 0.50%, Realty down by 0.43% and Bankex down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.41%, Bajaj Auto up by 1.66%, Maruti Suzuki up by 1.45%, Vedanta up by 1.17% and Tata Steel up by 1.12%. On the flip side, Lupin down by 1.97%, Coal India down by 1.96%, Bharti Airtel down by 1.77%, Reliance Industries down by 1.16% and HDFC Bank down by 0.62% were the top losers.

Meanwhile, consumer price index (CPI) inflation will be at least 25 bps lower that the actual CPI numbers, considering the need to include prices offered by e-retail market players while calculating retail inflation as rising online shopping, normally driven by heavy discounts, according to SBI Research report. The report said that only by considering the discount prices that too for a select group of products, CPI inflation can be brought down.

According to the report, CPI inflation numbers may be understating due to a variety of inflation estimation biases, of which e-commerce is one of the reasons. The report highlighted that a potential source of bias can arise when shifts to lower price discount outlets are inadequately reflected and hence there is a need to include the prices charged by the e-retailers like Flipkart, Snapdeal, Amazon etc, while calculating the CPI index, and if done so there may be a downward bias.

The report further said that books, apparel and accessories and electronics are the largest selling products on the online retailing platforms, constituting around 80 per cent of the volume. Apart from the evergreen product categories like electronics (including mobiles) and apparel, there is an emergence of new categories like home and kitchen and furniture, which have seen huge traction in the current year. As per the SBI Research report, the e-retailing, which comprises online retail and online marketplaces, has become the fastest-growing segment in the larger market having grown at a CAGR of around 56 per cent during 2009-14. The e-retail market was around $6 billion in 2015.

The CNX Nifty is currently trading at 8281.70, down by 13.75 points or 0.17% after trading in a range of 8272.05 and 8336.30. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.29%, Bajaj Auto up by 1.56%, Maruti Suzuki up by 1.52%, Vedanta up by 1.37% and HCL Tech up by 1.35%. On the flip side, Asian Paints down by 4.89%, Coal India down by 2.09%, Bharti Airtel down by 2.01%, Lupin down by 1.99% and Yes Bank down by 1.74% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 3.9 points or 0.11% to 3,416.33, KOSPI Index rose 7.68 points or 0.38% to 2,048.08, Jakarta Composite gained 37.73 points or 0.81% to 4,690.88, Taiwan Weighted added 71.55 points or 0.82% to 8,745.36 and Nikkei 225 was up by 121.82 points or 0.65% to 18,947.12. On the flip side, Hang Seng decreased 78.42 points or 0.34% to 23,073.52 and FTSE Bursa Malaysia KLCI was down by 5.17 points or 0.3% to 1,705.76.