Benchmarks make gap-down opening amid weak global cues

With a gap down opening Indian equity have extended their last session losses and are now trading with a cut of over quarter a percent, tracking the weak cues from global markets, as investors turned cautious ahead of the US Federal Reserve stance on interest rate, and November wholesale and consumer price inflation data scheduled for release later in the day. Further, depreciation in Indian rupee against dollar too weighed down the markets. The rupee weakened by 18 paise to 67.06 against the US dollar in early trade today at the Interbank Foreign Exchange, on strong demand for the American unit from importers. Selling witnessed in most of the key heavyweights dragged BSE’s -- Sensex -- and NSE’s -- Nifty -- to below their crucial 24,950 and 7,600 levels respectively. Meanwhile, the session was also negative for broader indices, which succumb to selling pressure. Shares of diesel fuelled automobile companies such as Tata Motors, M&M and Eicher Motors are trading lower after the National Green Tribunal (NGT) ordered immediate ban on registration of diesel-run cars in the national capital. The order further states that there won’t be any renewal of registration of vehicles that are older than 10 years in Delhi.

On the global front, the US stocks ended lower on Friday, with the S&P 500 ending its worst week since August, as plunging crude oil prices compounded investor nervousness on expectations for the first U.S. interest rate hike in nearly a decade. Asian markets were trading mostly in red as investors remain focused on the mid-week decision from the U.S. Federal Reserve.

Back home, most of the sectoral indices on BSE were trading in red, with prominent losers being the stocks from Auto, Realty, Bankex, Oil & Gas and PSU counters. On the flip side, stocks from TECK were the only gainers of the session. The market breadth on BSE was negative in the ratio of 681: 905 while 94 scrips remained unchanged.

The BSE Sensex is currently trading at 24918.70, down by 125.73 points or 0.50% after trading in a range of 24867.73 and 24993.68. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.13%, while Small cap index was lower by 0.26%.

The lone gaining sectoral index on the BSE was TECK up by 0.02%, while Auto down by 1.67%, Realty down by 0.92%, Bankex down by 0.75%, Oil & Gas down by 0.49% and PSU down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 0.77%, Infosys up by 0.66%, Maruti Suzuki up by 0.57%, Hindustan Unilever up by 0.35% and Lupin up by 0.29%. On the flip side, Tata Motors down by 4.23%, Mahindra & Mahindra down by 2.14%, Vedanta down by 1.32%, Axis Bank down by 1.21% and SBI down by 1.17% were the top losers.

Meanwhile, India’s industrial production grew at five-year high rate of 9.8 percent in October, a significant rebound from 3.84 percent growth recorded in September 2015 and a contraction of 2.7 percent in October last year. However, Chief Economic Advisor (CEA) Arvind Subramanian has cautioned that one has to be careful while interpreting the data as the spike could be on account of Diwali purchases. He said “Good number, hope this continues, but one shouldn't read too much into month to month number”.

The Index of Industrial Production (IIP) growth showed huge surge buoyed by demand in consumer products and capital goods during the festive season. While, the IIP for October grew by 9.8 percent, the cumulative IIP growth for April-October 2015-16 over the corresponding period last year stood at 4.8 percent.

Subramanian, who had headed a committee on suggesting GST rate, said the implementation of the GST will clean up the taxation regime and boost growth. He added that the simplification and uniformity in the new indirect tax regime will help in boosting country’s growth further and checking tax evasion and corruption. In principle, he said there should be no rise in prices post implementation of GST.

Meanwhile, India Inc has termed the surge in IIP as a booster for the economy, hoping that the strong growth trend would continue on the back of reforms. Assocham President Sunil Kanoria said that the industrial growth on the back of an impressive double digit expansion in manufacturing should no doubt be considered a morale booster for the economy.

The CNX Nifty is currently trading at 7578.35, down by 32.10 points or 0.42% after trading in a range of 7551.05 and 7596.85. There were 18 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Ambuja Cement up by 1.35%, Adani Ports &Special up by 1.04%, Sun Pharma Inds. up by 0.80%, Zee Entertainment up by 0.79% and Ultratech Cement up by 0.74%. On the flip side, Tata Motors down by 4.17%, Cairn India down by 2.47%, Mahindra & Mahindra down by 2.05%, PNB down by 1.79% and Axis Bank down by 1.40% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 decreased 409.4 points or 2.13% to 18,821.08, Hang Seng decreased 287.09 points or 1.34% to 21,176.96, Taiwan Weighted decreased 79.1 points or 0.97% to 8,036.79, Jakarta Composite decreased 39.12 points or 0.89% to 4,354.40, KOSPI Index decreased 19.5 points or 1% to 1,929.12 and FTSE Bursa Malaysia KLCI decreased 12 points or 0.73% to 1,628.14.

On the flip side, Shanghai Composite increased 18.58 points or 0.54% to 3,453.16.