Markets continue to trade in green with modest gains

Indian equity benchmarks continued to trade marginally in green in early noon session, as investors got some encouragement with Department of Industrial Policy and Promotion stated that the Foreign Direct Investment (FDI) in services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, has surged by 20 percent to $1.46 billion (Rs 9,404 crore) during April- September 2015 as compared to $1.22 billion in the same period last fiscal. The services sector contributes over 60 percent to the India’s Gross Domestic Product (GDP) and receives high foreign inflows. Some support also comes with industrial output rebounded to a five- year high in October. Industrial output grew by 9.8 percent in October on the support of robust demand for manufactured products in the festival month compared to just 3.6 percent in September. However, there was some cautiousness too, as global markets turned circumspect ahead of the interest rate decision by the Federal Reserve. Meanwhile, shares of sugar companies surged by up to 5% on the bourses on reports that the government plans to increase the cess on sugar by almost Rs 100 per quintal to fund its ambitious programme of paying Rs 4.50 per quintal directly into the bank accounts of growers.

On the global front, Asian markets were trading mostly in red, as plunging oil prices added to investors' nervousness about riskier assets ahead of an expected U.S. rate rise later in the week. Back home, both sensex and nifty were trading above their crucial 25,000 and 7,600 levels, respectively. Market breadth was positive on the BSE with 1312 gainers against 908 losers.

In scrip specific development, share of Natco Pharma was trading higher after the company along with Alvogen which filed for generic versions of Tamilflu  oral capsules (oseltamivir phosphate) in dosages of 30mg, 45mg and 75mg, settled the patent infringement suit filed by Gilead Sciences, Inc., Hoffmann-La Roche Inc., F. Hoffmann-La Roche Ltd. and Genentech, Inc., in New Jersey District Court.

The BSE Sensex is currently trading at 25061.43, up by 17.00 points or 0.07% after trading in a range of 24867.73 and 25131.77. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index gained 0.25%.

The top gaining sectoral indices on the BSE were Metal up by 1.11%, Power up by 0.34%, IT up by 0.33%, TECK up by 0.28% and FMCG up by 0.20%, while Auto down by 0.88%, Oil & Gas down by 0.21%, Realty down by 0.17%, Consumer Durables down by 0.15% and Capital Goods down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.00%, Tata Steel up by 1.81%, BHEL up by 1.45%, Sun Pharma Inds. up by 1.26% and Infosys up by 0.87%. On the flip side, Tata Motors down by 2.66%, Mahindra & Mahindra down by 1.61%, ONGC down by 1.58%, TCS down by 0.91% and Axis Bank down by 0.65% were the top losers.

Meanwhile, Foreign Direct Investment (FDI) in services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, has surged by 20 percent to $1.46 billion(Rs 9,404 crore)  during April- September 2015 as compared to $1.22 billion in the same period last fiscal, as per latest data released by Department of Industrial Policy and Promotion (DIPP). The services sector contributes over 60% to the India’s Gross Domestic Product (GDP) and receives high foreign inflows.

The FDI inflows in services sector have been led by the steps taken by the government to improve ease of doing business and attract investments. The government has announced a series of steps like fixing timeliness for approvals to improve the ease of doing business in the country. In banking sector, the government has eased norms and permitted portfolio investors to buy up to 74 percent stake in local private banks with full fungibility. Earlier this year, the government hiked the FDI cap in insurance sector to 49 percent.

Besides, other sectors which have attracted healthy foreign inflows during the April- September period of the current fiscal include computer software and hardware with $3.05 billion, trading $2.3 billion and automobile $1.46 billion. Strong inflows in these sectors pushed the overall FDI into the country by 13 percent to $16.63 billion during April-September 2015. While sectors such as construction development, telecommunication and pharmaceuticals recorded low FDI during the same period.

Growth in foreign investments helps improve the country's balance of payments (BoP) situation and strengthens the rupee. In the next five years, India needs around $1 trillion FDI to overhaul its infrastructure sector such as ports, airports and highways, to boost growth.

The CNX Nifty is currently trading at 7628.60, up by 18.15 points or 0.24% after trading in a range of 7551.05 and 7643.60. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 3.55%, Tata Steel up by 2.01%, Hindustan Unilever up by 1.90%, Ultratech Cement up by 1.79% and Ambuja Cement up by 1.61%. On the flip side, Tata Motors down by 2.47%, Cairn India down by 2.19%, ONGC down by 1.51%, Mahindra & Mahindra down by 1.16% and TCS down by 0.92% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 414.16 points or 2.15% to 18,816.32, Hang Seng decreased 262.29 points or 1.22% to 21,201.76, Taiwan Weighted decreased 76.84 points or 0.95% to 8,039.05, Jakarta Composite decreased 48.22 points or 1.1% to 4,345.30, KOSPI Index decreased 23.23 points or 1.19% to 1,925.39 and FTSE Bursa Malaysia KLCI decreased 12.63 points or 0.77% to 1,627.51, while Shanghai Composite increased 12.25 points or 0.36% to 3,446.83.