Benchmarks trade lower in early deals on F&O expiry day

After making flat opening, Indian equity markets have extended their losses in early deals on Thursday after the US Federal Reserve hinted at a interest rate hike in December, however, keeping them unchanged for now. The sentiments were under pressure on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 731.17 crore on October 28, 2015, as per provisional data released by the stock exchanges. Moreover, caution prevailed on the bourses with the October derivative contracts expire today. Traders also failed to get any sense of relief with Finance Minister Arun Jaitley’s statement after India jumped 12 positions to rank 130th in the world on ease of doing business, that the improvement in ranking does not fully reflect the reforms initiated and the position will improve further next year. On the Sectoral front, most of the indices on BSE were reeling under pressures, stocks from FMCG, TECK, Power, IT and Bankex counters were the prominent losers of the session. On the flip side, stocks from Realty, Consumer Durables, Healthcare and Auto counters were the only gainers of the session.

On the global front, the US markets ended higher as the Federal Reserve giving a vote of confidence in the US economy signaled a December interest rate hike. The Asian markets were trading mostly in red following the rekindled market expectations that Fed might still be on track to raise interest rates by year-end. Weak corporate earnings reports also weighed on investor sentiment.

In the scrip specific development, Torrent Power rallied 9%, its 52-week high on the BSE, after reporting a consolidated net profit of Rs 246 crore for the quarter ended on September 30, 2015.  TRF has surged 20% on the BSE after the company reported a consolidated net profit of Rs 4.14 crore for the quarter ended September 30, 2015 (Q2) against a loss of Rs 9 crore in the year ago quarter.

Closer home, the NSE Nifty and BSE Sensex were trading below the psychological 8150 and 27,000 levels respectively. The market breadth on BSE was positive in the ratio of 928: 591 while 83 scrips remained unchanged.

The BSE Sensex is currently trading at 26964.63, down by 75.13 points or 0.28% after trading in a range of 26946.34 and 27099.11. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.11%, while Small cap index was up by 0.34%.

The gaining sectoral indices on the BSE were Realty up by 0.82%, Consumer Durables up by 0.43%, Healthcare up by 0.21% and Auto up by 0.15%, while FMCG down by 0.64%, TECK down by 0.48%, Power down by 0.44%, IT down by 0.40% and Bankex down by 0.39% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.78%, Cipla up by 1.08%, Vedanta up by 0.90%, Tata Motors up by 0.79% and Lupin up by 0.69%. On the flip side, GAIL India down by 1.18%, Bharti Airtel down by 1.16%, Axis Bank down by 1.09%, ITC down by 1.06% and BHEL down by 0.99% were the top losers.

Meanwhile, a day after India’s ranking in the World Bank’s ease of doing business jumped 12 steps to 130th position, up from 142nd rank last year, Finance Minister Arun Jaitley has said that the improvement in ranking does not fully reflect the reforms initiated and the position will improve further next year. He said that a large number of steps which we have already taken are going to be reflected in the rankings next year. These rankings are only up to June 1 and some of those steps, whose impact is not seen on the ground, as yet have not been factored into this. But I am sure in the years our ranking will certainly improve.

Jaitley said that “I am grateful that the World Bank has recognised that India is now becoming an easier place to do business... I believe that this 12 point movement does not reflect the full pace of reforms that we have done.” He also said he believed that India still has a long way to go and it is 'work in progress' on improving environment for doing business in the country.

The finance minister also pointed that in recent days the government has taken a number of steps to further improve the ranking and is trying to make the Income Tax Act much simpler and in this regard have announced a Committee which will recast some of these provisions. The government has also brought in another ordinance two days ago for establishing a commercial court in each High Court of the country.

 Earlier DIPP Secretary Amitabh Kant too had said that though we had done a 12 points jump but Prime Minister’s target is that India must become the easiest and the simplest place to do business. This would require a lot of sustained work over a long period of time and we are determined to do this.

The CNX Nifty is currently trading at 8140.15, down by 31.05 points or 0.38% after trading in a range of 8136.00 and 8179.60. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 1.53%, Cairn India up by 1.20%, Vedanta up by 1.00%, Cipla up by 0.83% and ICICI Bank up by 0.74%. On the flip side, Ambuja Cement down by 1.94%, Power Grid Corpn. down by 1.68%, BPCL down by 1.58%, Indusind Bank down by 1.53% and Bharti Airtel down by 1.45% were the top losers.

Asian markets were trading mostly in red, Jakarta Composite decreased 80.08 points or 1.74% to 4,528.66, Taiwan Weighted decreased 68.4 points or 0.79% to 8,597.59, Hang Seng decreased 24.53 points or 0.11% to 22,932.04, Nikkei 225 decreased 17.18 points or 0.09% to 18,885.84, FTSE Bursa Malaysia KLCI decreased 10.5 points or 0.62% to 1,676.01 and KOSPI Index decreased 5.99 points or 0.29% to 2,036.52.

On the flip side, Shanghai Composite increased 4.18 points or 0.12% to 3,379.38.