Benchmarks make flat but positive opening

Indian equity markets have made a flat but positive opening and are now trading with marginal gains at the start of the F&O expiry week amid positive global cues. Traders were getting support with former governor of RBI C Rangarajan’s statement that Indian economy will slightly perform better this year as the productivity level of capital may remain high. Though the growth rate of economy will be somewhere around 7.5 percent, the productivity of capital is less than investment growth and should catch up.  However up-side remained capped as investors patiently await for the US Federal Reserve unscheduled meet later today. Further, some cautiousness also came on reports that overseas investors have pulled out more than $1billion from the Indian capital markets since the beginning of the month due to lacklustre quarterly earnings and concerns over a possible rate hike by the US Federal Reserve. Also, expressing concern over slowdown in the pace of reforms, global rating agency Standard & Poor's has said that India's rating could come under stress if government fails to pursue reforms agenda and overshoots fiscal deficit target. On the sectoral front most of the sectoral indices on BSE were trading in green, with prominent gainers being the stocks from Capital Goods, Oil & Gas, Realty, Consumer Durables and Bankex counters. On the flip side, stocks from Metal, FMCG and IT counters were the losers.

In the scrip specific development, Vakrangee rallied 14 per cent on the BSE after the company announced alliance with Ricoh India, to provide Managed Print Service (MPS) on a Pay per Unit (PpP) model to the un-served and under-served geographies in India through various Vakrangee Kendras.

On the global front, the US markets ended higher on Friday with healthcare, technology and consumer stock making gains and investors looking beyond a widely-expected December interest rate hike. Asian markets were trading mostly in green following the positive lead from Wall Street and on dovish comments from European Central Bank President Mario Draghi that are seen as a sign that the ECB may ramp up its asset purchase program after its meeting next month. The Japanese market is closed on Monday for the Labor Thanksgiving Day holiday.

Back home, the NSE Nifty and BSE Sensex were trading near the psychological 7,900 and 25,900 levels respectively. The market breadth on BSE was positive in the ratio of 1151:457 while 86 scrips remained unchanged

The BSE Sensex is currently trading at 25896.49, up by 28.00 points or 0.11% after trading in a range of 25846.73 and 25958.04. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.81%, Oil & Gas up by 0.71%, Realty up by 0.66%, Consumer Durables up by 0.60% and Bankex up by 0.43%, while Metal down by 0.53%, FMCG down by 0.28% and IT down by 0.07% were the only losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.80%, Bajaj Auto up by 1.56%, Dr. Reddys Lab up by 1.16%, BHEL up by 1.08% and Bharti Airtel up by 1.04%. On the flip side, Hindalco down by 2.33%, Vedanta down by 2.25%, ITC down by 1.06%, Tata Steel down by 0.91% and NTPC down by 0.75% were the top losers..

Meanwhile, global rating agency Standard & Poor’s, despite government’s various measures of putting back the economy on track, has expressed concern over slowdown in the pace of reforms and said that India’s rating could come under stress if the Government fails to pursue reforms agenda and overshoots fiscal deficit target.

The global credit rating agency which would formally review India’s ratings in November 2016, has ruled out a rating upgrade for the country in the next 12-18 months but said that in case the Government is able to get the Goods and Services Tax (GST) bill passed in the forthcoming Winter Session of Parliament, it would be a credit positive and its passage would indicate that government's reform initiative is picking pace with a strong momentum

It said that GST will bring in a simple tax regime and a business friendly environment. Passage of GST bill will be credit positive for India. It would indicate that the Government’s reform initiative is picking up pace with a strong momentum. The agency will keep a close watch on the upcoming Budget to see how the government plans to maintain the deficit target and go ahead with the reforms. It added that reforms like land acquisition bill and GST have been stuck due to political logjam in Parliament.

S&P further said that it could consider a rating upgrade if fiscal deficit is brought down, debt to GDP ratio is below 60 percent and savings are properly channelized, but also cautioned that ratings could come under stress if it see that government is backing away from reform commitment and fiscal deficit is not in control. As per the revised roadmap, fiscal deficit is to be brought down to 3.9 percent of GDP in 2015-16, 3.5 percent in 2016-17 and 3 percent by 2017-18. The deficit in 2014-15 was 4 percent of GDP.

The CNX Nifty is currently trading at 7867.70, up by 11.15 points or 0.14% after trading in a range of 7850.85 and 7877.50. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 2.71%, Hero MotoCorp up by 1.81%, Zee Entertainment up by 1.77%, Asian Paints up by 1.75% and Kotak Mahindra Bank up by 1.40%. On the flip side, Hindalco down by 2.20%, Vedanta down by 2.04%, ITC down by 1.03%, Tata Steel down by 1.02% and Cipla down by 0.77% were the top losers.

Asian markets were trading in green, Taiwan Weighted increased 6.77 points or 0.08% to 8,472.22, FTSE Bursa Malaysia KLCI increased 11.04 points or 0.66% to 1,672.93, Hang Seng increased 11.37 points or 0.05% to 22,766.09, Shanghai Composite increased 14.2 points or 0.39% to 3,644.70, KOSPI Index increased 16.63 points or 0.84% to 2,006.49 and Jakarta Composite increased 17.02 points or 0.37% to 4,578.36.