Benchmarks recover from day's low; bounce back into positive territory

Reversing gears, Indian equity markets have entered into positive territory in late morning deals on emergence of buying by funds and retail investors. Sentiments got boost with Finance Minister Arun Jaitley vowing a corruption-free governance, reasonable tax rates and non-discretionary allotment of natural resources to make it easier for companies to do business in India.  Some support also came with Credit Suisse’s report that Low inflation and optimism are encouraging urban consumers to spend more, in turn sending out early signs of a revival in the Indian economy. Also, front loaded stimulus this year by the central government now seems to be showing up in economic momentum in some of the segments like automobiles, power and oil. However, investors remained cautious with the Reserve Bank of India (RBI) governor Raghuram Rajan’s statement that the drop in public and private investments was the main concerns about the country's economic growth. RBI has cut its growth forecast for the current fiscal year to 7.4% from 7.6% previously, well below the government's target of 8 to 8.5%.

On the global front, Asian markets were trading mixed with Japan’s Nikkei down by half a percent as Bank of Japan maintained status quo on monetary policy. Lower commodity prices weighed on resource stocks. Further, Wall Street ended a little lower on Thursday as falling healthcare stocks offset gains in Intel and other technology names, while investors eyed an expected rate hike in December. Back home, all BSE sectoral indices were trading in the green. among them, Oil & Gas index gained the most, up by 1.89 per cent, followed by IT 1.20 per cent, TECK 0.96 per cent and Auto 0.77 per cent. Furthermore, consumer durables stocks also showed some buying interest on the expectation that the 7th Pay Commission recommendation which will benefit nearly 50 lakh central government employees along with some 54 lakh pensioners, will boost demand and sale in consumer durables and auto.

In scrip specific development, shares of Intellect Design Arena have surged after Intellect SEEC, the insurance software division of the company announced the launch of its Digital Distribution Suite for the UK Life and Pension markets. Furthermore, Jubilant Food Works has rallied after the company said that Domino's Pizza India has partnered with Zippr, a Hyderabad based startup that is solving the problem of complex addresses.

The market breadth on BSE was positive, out of 2208 stocks traded, 1340 stocks advanced, while 705 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25970.83, up by 128.91 points or 0.50% after trading in a range of 25769.81 and 25972.99. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.73%, while Small cap index gained 0.74%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.85%, IT up by 1.19%, TECK up by 0.99%, Auto up by 0.87% and Consumer Durables up by 0.69%, while there were no losers on the sectoral space.

The top gainers on the Sensex were GAIL India up by 7.73%, Wipro up by 2.48%, Mahindra & Mahindra up by 1.99%, Dr. Reddys Lab up by 1.80% and TCS up by 1.53%. On the flip side, Sun Pharma down by 1.15%, Bharti Airtel down by 0.80%, ITC down by 0.61%, Axis Bank down by 0.54% and Hindalco down by 0.32% were the top losers.

Meanwhile, Chief Economic Adviser Arvind Subramanian, highlighting India’s economic strength has said that the country’s inflation is totally under control and is also within the target of the Reserve Bank of India and not at 2 or 1 per cent or so. He further stated that India’s inflation had come down and is not at the levels of the US and China. The Reserve Bank has targeted an inflation level of 5.8 per cent by January 2016, lower from its earlier projection of 6 per cent.

The retail inflation for the month of October, surging for the third straight month, rose 5 percent, from a 4.41% in September and 4.62 percent in October last year, on the back of costlier pulses and other food items. Higher demand for consumer durables and food items during the festival season beginning in October also contributed to inflation.

Subramanian however said that the India needs to boost its growth with public spending and as well as private investment. In the budget it was announced that the private investment is going to be weak due to legacy issues and hence India need to work to have a growth. He further added that 'Not just by boosting government consumption, but actually by increasing public investment because that will crowd in private investment. And also, it is related to the Make in India supply side'.

The CNX Nifty is currently trading at 7872.95, up by 30.20 points or 0.39% after trading in a range of 7817.80 and 7880.05. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 7.71%, Wipro up by 2.83%, Mahindra & Mahindra up by 2.23%, Dr. Reddys Lab up by 1.99% and BPCL up by 1.70%. On the flip side, Sun Pharma down by 1.10%, Bosch down by 1.05%, Bharti Airtel down by 0.71%, HCL Tech down by 0.59% and PNB down by 0.54% were the top losers.

Asian markets were trading mixed, KOSPI Index was up by 0.04%, FTSE Bursa Malaysia KLCI up by 0.11%, Shanghai Composite up by 0.16% and Jakarta Composite up by 0.4%. On the flipside Nikkei 225 was down by 0.46%, Hang Seng down by 0.21% and Taiwan Weighted was down by 0.43%.