Indian equity markets continue trading in red; Bankex, realty drag

After getting weak start, Indian bourses continued to trade in red in the late morning session on back of sustained selling by cautious investors ahead of the Bihar elections result. The fifth and final round of voting for 57 seats across nine districts in the Bihar Assembly poll takes place today. Sentiments remained subdued with the private report that indicate that India may have to import a large quantity of 10 million tonnes of pulses if the domestic production-consumption mismatch has to be bridged, leaving the government with a daunting task. Globally, attention was drawn to Fed chair Janet Yellen’s testimony where said an improving economy has set the stage for a December interest-rate increase.  In testimony before the House Financial Services Committee in Washington, Yellen said, “At this point, I see the US economy as performing well. However, investors got some support with Finance Minister Arun Jaitley’s statement that introduction of the goods and services tax (GST), which will replace more than a dozen state levies, is only 'a question of time' as obstruction to the reform measure will not stand parliamentary vote. Further, some support also came with Union minister M Venkaiah Naidu statement that the government will soon provide a single-window clearance for urban development projects, a move that will help address the issue of delays in approvals. The broader markets also succumbed to the selling pressure seen on the benchmark indices with the BSE midcap and BSE smallcap indices slipping 0.68 and 0.72 per cent.

On the global front, Asian stocks traded mostly lower in early trade, following a weaker finish on Wall Street as increasing odds of a U.S. interest-rate rise in December sapped risk appetite. Wall Street shares slipped on Wednesday, with S&P 500 Index falling 0.4% from a three-month high touched on Tuesday, driven by losses in the energy sector after a fall in oil prices. Back on street, stocks from Auto, FMCG and PSU counters were supporting the markets’ uptrend, while those from Banking, Realty and Metal counters were adding to the underlying cautious undertone. In scrip specific development, shares of Pratibha Industries have rallied after the company secured order worth of Rs 1,024 crore from Government of Telangana for water supply. On the other hand, shares of Bank of Maharashtra have declined after the bank reported a 56% year-on-year fall in net profit for the quarter ended September, owing to a drop in net interest income (NII) and higher provisions for bad loans.

The market breadth on BSE was negative, out of 2142 stocks traded, 743 stocks advanced, while 1313 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26448.56, down by 104.36 points or 0.39% after trading in a range of 26373.48 and 26557.80. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.68%, while Small cap index down by 0.72%.

The top gaining sectoral indices on the BSE were Auto up by 0.18%, FMCG up by 0.06% and PSU up by 0.05%, while Bankex down by 1.14%, Realty down by 0.94%, Metal down by 0.51%, TECK down by 0.50% and IT down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.52%, Coal India up by 1.01%, NTPC up by 0.89%, Tata Motors up by 0.67% and Maruti Suzuki up by 0.48%. On the flip side, Vedanta down by 2.23%, Bharti Airtel down by 2.23%, Tata Steel down by 2.10%, Axis Bank down by 1.93% and Sun Pharma Inds. down by 1.61% were the top losers.

Meanwhile, in a pleasant surprise, India’s service sector expanded at its fastest speed in eight month in October on the back of significant rise in new business orders which hit its highest since February. The seasonally adjusted Nikkei Business Activity index tracking changes in activity at Indian services companies on a month-by-month basis surged to 53.2 in October, from 51.3 in September, marking a fourth month above 50 level that separates growth from contraction. India's economic growth has shifted into a higher gear in October, driven by the services sector.

As per the survey, even though the manufacturing production slipped in October, the seasonally adjusted Nikkei India Composite PMI Output Index which maps both manufacturing and services sectors rose to a 52.6 in October from 51.5 in September, mainly due to  rise in new businesses.

The survey reported that the services business sentiment regarding the 12-month business outlook remained positive in October. Services companies in India lowered their selling prices for the second successive month in October, though the pace of reduction was only marginal. Efforts to improve competitiveness were the main reason cited by respondents for the latest decline in tariffs. The sectors which registered falling charges were Post & Telecommunication, Transport & Storage and ‘Other Services’. The reduction in selling prices at services firms offset higher charges at goods producers, and tariffs across the private sector as a whole fell for the second month running.

Meanwhile, the October data indicated that services sector employment was unchanged. About 98 per cent of survey penallist reported no change in payroll members since the preceding month. Goods producers signaled higher staffing numbers, but the rate of job creation was only marginal. The Nikkei survey further highlighted that  amid reports of higher prices paid for petrol and food,  the average input costs  though remained sluggish but rose in both the services and manufacturing sectors.

The CNX Nifty is currently trading at 8002.40, down by 37.80 points or 0.47% after trading in a range of 7981.90 and 8031.20. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.30%, Power Grid up by 0.91%, Coal India up by 0.91%, Tata Power up by 0.73% and NTPC up by 0.67%. On the flip side, Bharti Airtel down by 2.53%, Vedanta down by 2.33%, Yes Bank down by 1.89%, Axis Bank down by 1.87% and Tata Steel down by 1.85% were the top losers.

Asian markets were trading mostly in red, Jakarta Composite was down by 0.37%, Taiwan Weighted down by 0.08% and KOSPI Index down by 0.16%. On the flip side, FTSE Bursa Malaysia KLCI was up by 0.46%, Hang Seng up by 0.23%, Shanghai Composite up by 2.69% and Nikkei 225 was up by 1.11%.