Benchmarks continue to trade in red in late morning session

After getting a weak start, Indian frontline equity indices continued to trade in red in the late morning session as investors remained cautious ahead of the FOMC meet outcome due later today. Sentiments remained subdued with Finance Minister Arun Jaitley and his deputy Jayant Sinha admitted that meeting the Rs 69,500 crore disinvestment target for the fiscal year will be difficult, with both putting the blame on low commodity prices. Besides, caution ahead of expiry of October month contracts in the derivatives segment tomorrow also influenced the trading sentiment. Investors failed to draw any sense of relief with World Bank's report that India now ranks 130 out of 189 countries in the ease of doing business, moving up 12 places from 2014. According to World Bank's Chief Economist and Senior Vice President Kaushik Basu, a forward movement of 12 spots in the ease of doing business by an economy of the size of India is a 'remarkable achievement. Further, as part of its ongoing efforts to improve ease of doing business in the country, the Government has set up a new panel to simplify the country's 55-year-old income tax law.

On the global front, Asian stocks slipped in early trade, taking cues from an overnight decline on Wall Street and capped by caution ahead of a policy statement from the US Federal Reserve due later in the day. Further, US stocks slipped on Tuesday on uncertainty over the US rate outlook and disappointing results from Ford and other companies.

Back on street, stocks from Consumer Durables, FMCG and TECK counters were supporting the markets’ uptrend, while those from Banking, Oil & Gas and PSU counters were adding to the underlying cautious undertone. In scrip specific development, shares of Navin Fluorine International have rallied after reporting a more-than-doubled net profit at Rs 23.23 crore for the quarter ended September 30, 2015 (Q2), on back of strong operational performance. On the other hand, shares of Thermax have dipped after the company reported 25% year on year (YoY) drop in standalone net profit at Rs 65 crore for the second quarter ended September 30, 2015 (Q2) due to lower operational income.

The market breadth on BSE was negative, out of 2269 stocks traded, 1182 stocks advanced, while 945 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27106.66, down by 146.78 points or 0.54% after trading in a range of 27097.33 and 27163.98. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15%, while Small cap index up by 0.42%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.05%, FMCG up by 0.24% and TECK up by 0.10%, while Bankex down by 1.08%, Oil & Gas down by 0.66%, PSU down by 0.52%, Power down by 0.50% and Realty down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.14%, HDFC Bank up by 0.94%, BHEL up by 0.75%, Maruti Suzuki up by 0.52% and ITC up by 0.39%. On the flip side, Axis Bank down by 5.74%, ICICI Bank down by 2.59%, ONGC down by 1.49%, NTPC down by 1.36% and Dr. Reddys Lab down by 1.14% were the top losers.

Meanwhile, amid buzz of government finding it difficult to meet the disinvestment target, Finance Minister Arun Jaitley has said that there is no cause for concern on fiscal deficit and the government will meet its target for the current fiscal, though there are challenges on the disinvestment front. He said that lower receipts will not upset the fiscal maths and there will be no difficulty in achieving the fiscal deficit target of 3.9 per cent set for the current fiscal year.

Speaking at India Africa Forum Submit in New Delhi, the FM further said that “I had deliberately kept a very modest fiscal deficit target that is the movement from 4.1 per cent which eventually became 4 per cent to 3.9 per cent (in 2015-16). The manner in which tax revenues and expenditure are moving, I don't see there's going to be any difficulty'.

Acknowledging that disinvestment is a challenge mainly on account of global problem, Jaitley said that metal stocks which were the large part of the kitty that the government has planned for the current fiscal year are not performing well. Earlier, Union Minister of State for Finance Jayant Sinha too had said that the Government’s disinvestment target is fully dependent on market conditions.

Recently, it was reported that the department of disinvestment (DoD) has said that it wants the PSUs stake sale target to be more than halved to Rs 30,000 crore for the current financial year, stating that this target seems more reasonable given that there is no big stock to sell. For the fiscal year 2015-16, the government has targeted to raise Rs 69,500 crore through disinvestment, 180 per cent higher than the total amount garnered from PSU share sales in the previous fiscal. Out of the total budgeted target, Rs 41,000 crore is to come from minority stake sale in PSUs and the remaining Rs 28,500 crore from the strategic stake sale.

The CNX Nifty is currently trading at 8192.90, down by 40.00 points or 0.49% after trading in a range of 8181.00 and 8209.10. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.89%, GAIL India up by 1.05%, Bharti Airtel up by 1.04%, ACC up by 1.03% and Tech Mahindra up by 0.92%. On the flip side, Axis Bank down by 5.87%, Cairn India down by 3.01%, Adani Ports &Special down by 2.71%, ICICI Bank down by 2.66% and ONGC down by 1.53% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 0.56%, Taiwan Weighted down by 0.67%, Jakarta Composite down by 1.56%, Shanghai Composite down by 0.58%, KOSPI Index down by 0.35% and FTSE Bursa Malaysia KLCI down by 0.59%. On the flip side, Nikkei 225 was up by 0.5%.