Benchmarks make negative opening on Tuesday

With a negative opening Indian equity markets have extended their last session losses and are now trading with a cut of over a quarter percent on sustained selling by fund and retails investors. Weakness in the other Asian peers weighed on the sentiments, as investors remained on sidelines ahead of the two-day policy review by the US Federal Reserve that begins later in the day. However, foreign portfolio investors (FPIs) bought shares worth a net Rs 724.51 crore on October 26, 2015, as per provisional data released by the stock exchanges capped some losses. On the sectoral front, most of the sectoral indices were trading in red with prominent losers being stocks from Metal, Realty, PSU, Consumer Durables and FMCG counters. On the other hand, stocks from Capital Goods, Power and Auto counters were the only gainers of the session. Meanwhile, IndiGo’s parent InterGlobe Aviation will hit the capital markets today to raise Rs 3,018 crore through its initial public offering (IPO). The operator of the profitable no-frills carrier IndiGo has set a price band for the public offer at Rs 700 - 765. IndiGo raised Rs 832 crore from 43 anchor investors, ahead of its Initial Public Offering.

On the global front, the US markets ended lower after data showed new home sales stood at 4,68,000 in September, which was significantly less than market expectations. The Asian markets were trading in red as investors awaited monetary policy announcements from central banks and the outcome of China's economic planning meeting.

In the scrip specific development, Den Networks rallied 7% on the BSE after the Reserve Bank of India (RBI) allowed foreign investors to raise their stake up to 74% in the company. on the other hand, Hitachi Home and Life Solutions dipped 10% on the BSE in early morning trade after the company reported disappointing set of numbers with net loss of Rs 11 crore for the quarter ended September 30, 2015 (Q2) against profit of Rs 9 crore in the same quarter year ago.

Closer home, the NSE Nifty and BSE Sensex were trading below the psychological 8,200 and 27,250 levels respectively. The market breadth on BSE was negative in the ratio of 760: 759 while 76 scrips remained unchanged. 

The BSE Sensex is currently trading at 27281.21, down by 80.75 points or 0.30% after trading in a range of 27250.40 and 27296.30. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.07%, while Small cap index down by 0.03%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.35%, Power up by 0.15% and Auto up by 0.12%, while Metal down by 0.89%, Realty down by 0.50%, PSU down by 0.37%, Consumer Durables down by 0.33% and FMCG down by 0.25% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 0.85%, Larsen & Toubro up by 0.73%, Bajaj Auto up by 0.69%, NTPC up by 0.64% and Mahindra & Mahindra up by 0.54%. On the flip side, ONGC down by 2.60%, HDFC down by 2.19%, Lupin down by 1.74%, Vedanta down by 1.34% and Hindalco down by 1.29% were the top losers.

Meanwhile, Moody's Investors Services, projecting Indian economy’s growth at 7 per cent in the current fiscal and 7.5 per cent in the next one has said that improving economic growth along with low oil prices will support higher consumption of refined petroleum products in India over the next 18 months.

In its latest report titled 'Refining and Marketing - Asia Outlook Stable on Modest EBITDA Growth, Easing Supply Overhang' the agency said that “We expect the Indian economy to grow at a faster pace, with GDP growth for the fiscal year ending March 2016 at 7 per cent and 7.5 per cent for the following year.' As per the report, refined products demand grew 6.7 percent year-over-year in April to August 2015, significantly better than the 2 percent growth rate achieved in the fiscal year ended March 2015.

Moody’s added that lower crude prices will reduce refiners' feedstock costs and minimise working capital requirements, which together with healthy earnings, will boost cash flows and allow refiners to reduce borrowings.

However, the agency has cautioned that economic slowdown in China, industry cyclicality and capacity overhang continue to pressure Asian refiners, it said that despite our stable outlook we could change our outlook to negative if net refining capacity additions in Asia materially outpace growth in demand, such that our projected EBITDA for the industry declines by more than 10 percent; or if demand from China and India contracts. On the same time it said that it would consider a positive outlook if regional demand overwhelms capacity additions such that refining margins exceed $8 per barrel on a sustained basis; or if Iranian sanctions are lifted such that low Brent crude prices in the $50 per barrel range become the new norm, leading to raise EBITDA growth forecast above 10 percent.

The CNX Nifty is currently trading at 8235.95, down by 24.60 points or 0.30% after trading in a range of 8227.85 and 8240.95. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.21%, Maruti Suzuki up by 0.82%, Larsen & Toubro up by 0.78%, Asian Paints up by 0.74% and Yes Bank up by 0.70%. On the flip side, ONGC down by 2.44%, HDFC down by 2.22%, Lupin down by 1.90%, Vedanta down by 1.53% and Tata Steel down by 1.12% were the top losers.

Asian markets were trading in red, Hang Seng decreased 201.1 points or 0.87% to 22,915.15, Nikkei 225 decreased 117.48 points or 0.62% to 18,829.64, Taiwan Weighted decreased 65.69 points or 0.75% to 8,679.67, Jakarta Composite decreased 62.29 points or 1.33% to 4,629.42, Shanghai Composite decreased 62.25 points or 1.82% to 3,367.33, FTSE Bursa Malaysia KLCI decreased 9.65 points or 0.57% to 1,697.14 and KOSPI Index decreased 7.22 points or 0.35% to 2,040.86.