Benchmarks extend southward journey for sixth straight session

Extending their southward journey to sixth straight session, Indian equity benchmarks ended the session slightly in red on Monday. Sentiments remained downbeat after India’s manufacturing sector growth slipped further and touched a 22-month low in October largely due to a slower increase in new orders, but firms hired additional workers. Sentiments also remained dampened on report that foreign institutional investors (FIIs) have reduced their exposure in 35 Nifty companies during July-September quarter as they recast their portfolio primarily on account of global factors.

Domestic indices even went on to test important psychological 26,400 (Sensex) and 8,000 (Nifty) levels, but the key gauges got some support near those intraday low levels as they trimmed their losses from thereon as investors continued hunt for fundamentally strong stocks. Traders drew some solace with report that Global rating agency Moody's has upgraded its outlook for the Indian banking system to stable from negative on gradual improvement in operating environment. Some support also came with Finance Minister Arun Jaitley’s statement that the government was looking to ease foreign direct investment rules and reduce the number of approvals needed to speed up investment.

On the global front, European counters were trading mostly in green despite report of Spain's manufacturing sector growing at the slowest pace since December 2013 in October. However, Asian markets ended mostly in red after weak Chinese manufacturing data for October fuelled fears about the state of the world’s number two economy.

Back home, foreign portfolio investors (FPIs) sold shares worth a net Rs 1464.89 crore on Friday as per provisional data released by the stock exchanges. Depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 65.60 per dollar at the time of equity markets closing compared with its previous close of 65.27. 

Selling in banking counter also weighed sentiments despite Moody’s Investor Services revising outlook on the Indian banking system to stable from negative, owing to the changing operating environment of local banks, managed to end flat with a positive bias. Moody’s expects the recovery in Indian banks to be ‘U’ shaped rather than ‘V’ shaped. The ratings agency has also said that apart from improvement in operating environment for local banks, it also saw stability in drivers such as asset risk and capital, funding and liquidity, profitability and efficiency and government support. However, specific scrips viz. Tata Motors, M&M gained on higher October sales numbers. Total sale of Tata Motors passenger and commercial vehicles (including exports) were at 43,486 vehicles, higher by 1%, over 42,862 vehicles, sold in October 2014, while M&M registered 20% growth in October sales by selling 51,383 units as against 42,780 units during October 2014.

The NSE’s 50-share broadly followed index Nifty declined by fifteen points but managed to hold its crucial 8,050 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex declined by around one hundred points to end below its crucial 26,600 mark. Broader markets too struggled to get any traction during the trade and ended the session mixed. The market breadth remained in favor of decliners, as there were 1,156 shares on the gaining side against 1,541 shares on the losing side while 119 shares remain unchanged.

Finally, the BSE Sensex declined by 97.68 points or 0.37% to 26559.15, while the CNX Nifty lost 15.00 points or 0.19% to 8050.80. 

The BSE Sensex touched a high and a low 26824.30 and 26378.26, respectively. The BSE Mid cap index was up by 0.08%, while Small cap index was down by 0.20%.  

The top gaining sectoral indices on the BSE were Realty up by 0.91%, Consumer Durables up by 0.53%, FMCG up by 0.33%, Oil & Gas up by 0.30% and TECK up by 0.26%, while Metal down by 1.27%, Capital Goods down by 1.05%, Healthcare down by 0.72%, Power down by 0.18% and PSU down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.25%, Coal India up by 1.59%, Reliance Industries up by 1.19%, Maruti Suzuki up by 1.05% and ICICI Bank up by 0.83%. On the flip side, Bajaj Auto down by 4.85%, Hindalco down by 3.69%, Tata Steel down by 3.28%, Vedanta down by 3.10% and HDFC down by 2.80% were the top losers.

Meanwhile, India has become the world’s seventh most valued ‘nation brand ‘in 2015, moving up one position from 2014. There has been increase of 32 per cent in its brand value to $2.1 billion from that of $1.62 billion in 2014, as per report on world’s most valuable nation brands by global consultants Brand Finance. The surge of 32 per cent in India's 'nation brand value' is the highest among all the top-20 countries on the list. The report stated that India’s 'Incredible India' slogan has worked well.

As per the report, India is the only country among the Brics nations to have witnessed an increase in its brand value with others -- Brazil, Russia, China and South Africa - seeing a dip in their respective brand valuations. India is the second most valued among these emerging economies after China, followed by Brazil, Russia and South Africa.

On the global front, the US remains on the top position with a valuation of $19.7 billion, followed by China and Germany at the second and the third positions respectively. The UK is ranked 4th, Japan is at fifth position and France is sixth on the list. The US remains the world's most valuable nation brand. Its value comes in large part from the country's sheer economic scale. China has retained its second position despite a decline of one percent in its brand value to $6.3 billion.

Brand Finance has said that it measures the strength and value of the nation brands of 100 leading countries using a method based on the royalty relief mechanism employed to value the world's largest companies. The nation brand valuation is based on five year forecasts of sales of all brands in each nation and follows a complex process. The Gross domestic product (GDP) is used as a proxy for total revenues.

The CNX Nifty touched a high and low 8060.70 and 7995.60 respectively.

The top gainers on Nifty were Tech Mahindra up by 3.38%, Yes Bank up by 1.88%. ACC up by 1.78%,  Mahindra & Mahindra up by 1.76% and Coal India up by 1.64%. On the flip side, Bajaj Auto down by 4.68%, Tata Steel down by 3.28%, Vedanta down by 3.05%, Hindalco down by 2.80% and Sun Pharma down by 2.62% were the top losers.

European Markets were trading mostly in the green; France’s CAC was up by 0.25% and Germany’s DAX was up by 0.58%, while UK's FTSE was down by 0.45%.

The Asian equity markets ended mostly in red on Monday, after soft Chinese factory surveys stoked global growth concerns. Activity in China’s manufacturing sector unexpectedly shrank for a third straight month in October, fuelling fears that the economy may be cooling further in the fourth quarter despite a raft of stimulus measures. The official Purchasing Managers’ Index (PMI) was at 49.8 in October, the same pace as in previous month and lagging market expectations of 50.0. Japanese manufacturing activity in October expanded at the fastest pace in a year as new domestic and export orders increased. The Markit/Nikkei Japan Final Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 52.4 in October, slightly less than a preliminary reading of 52.5 but a solid improvement from the final reading of 51.0 in September. The index remained above the 50 threshold that separates expansion from contraction for the sixth straight month. October’s performance was the strongest in a year. The findings add to evidence that the world’s third-largest economy is recovering from a dip earlier this year as demand at home and abroad is starting to pick up. Indonesian Inflation fell to a seasonally adjusted 6.25%, from 6.83% in the preceding month. Thai CPI rose to a seasonally adjusted annual rate of -0.77%, from -1.07% in the preceding month.