Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as investors turned cautious ahead of the two-day FOMC meet in which the US Federal Reserve is widely expected to raise interest rates. Sentiments remained down-beat on the report that retail inflation rose to 5.41 per cent in November, 4th straight month of uptick as prices of vegetables, pulses and fruits went up further to push the rate of price rise above the Reserve Bank’s comfort level. However, investors got some support from the report that Global rating agency Fitch has retained India's sovereign rating at BBB-/Stable -- the lowest investment grade and said that the country will continue to post good growth despite subdued prospect for the Asia Pacific region. Meanwhile, shares of Oil & Gas companies were trading higher on report that government will auction 28 oil and gas blocks off Mumbai and 14 in KG basin. Some public sector banks like Vijaya Bank and Indian Bank came into the buyers’ radar and made appreciable gains after the report that the finance ministry will inject Rs 5,000 crore in public sector banks (PSBs) to boost their capital but this will depend on improvements in performance and efficiency.

On the global front, Asian shares were mostly higher in early trade, as jittery investors took cues from gains on Wall Street and a rebound in oil prices, but volatility remains high ahead of Federal Reserve and Bank of Japan policy meetings. Furthermore, US stocks recouped intra-day losses to end higher on Monday amid a recovery in global crude oil prices. Back home, selling pressure was visible in FMCG, Oil & Gas and Realty stocks. At the same time, some amount of buying was seen in Banking, TECK and IT stocks. In scrip specific development, shares of Petron Engineering Construction have surged after the company received Letter of Intent (LoI) from Ramco Cements for Civil and Mechanical works for capacity up gradation of Line-1 Cement Plant and Captive Power Plant at Jayanthipuram for a contract value of Rs 22.50 crore. Furthermore, Hotel Leelaventure has rallied after the company has completed the Rs 725-crore sale of its Goa property to Ceres Hotels.

The market breadth on BSE was positive, out of 2135 stocks traded, 1219 stocks advanced, while 791 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25113.29, down by 37.06 points or 0.15% after trading in a range of 25075.54 and 25190.12. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.06%, while Small cap index up by 0.33%.

The top gaining sectoral indices on the BSE were FMCG up by 0.65%, Oil & Gas up by 0.62%, Realty up by 0.43% and Consumer Durables up by 0.27% while Bankex down by 0.62%, TECK down by 0.41%, IT down by 0.39%, Metal down by 0.38% and Auto down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.56%, ONGC up by 1.26%, Hindustan Unilever up by 1.25%, Sun Pharma Inds. up by 0.83% and Bharti Airtel up by 0.73%. On the flip side, ICICI Bank down by 1.89%, Tata Motors down by 1.52%, Wipro down by 1.06%, Hindalco down by 0.95% and BHEL down by 0.93% were the top losers.

Meanwhile, global rating agency Fitch has retained India's sovereign rating at BBB-/Stable -- the lowest investment grade and said that the country will continue to post good growth despite subdued prospect for the Asia Pacific region amid expected rise in US rates, dollar strength, and lower commodity prices.

Fitch said that sovereigns are generally much less reliant on foreign-currency financing, and many countries now have more flexible exchange-rate regimes in place of the more prevalent use of explicit pegs before 1997. Adding that this gives authorities greater scope to let exchange rates act as a buffer today compared with the mid-1990s

However, the rating agency expects Emerging Asia growth to slow to 6.3 per cent in 2016 from 6.5 per cent, driven almost entirely by a projected slowdown in China.  Excluding the two giants China and India, the region is projected to expand 5.2 per cent in 2016 from 5 per cent, the fastest of any emerging region, it said in its report 'Emerging Asia Sovereign Outlook 2016

Talking about the headwinds, the report said 'dollar strength in the context of an expected rise in US rates, still-sluggish global trade growth and lower commodity prices pose a challenging set of circumstances for Emerging Asia in 2016 - which partly explains why the high growth rates of the mid-2000s look out of reach.

The CNX Nifty is currently trading at 7638.45, down by 11.60 points or 0.15% after trading in a range of 7625.10 and 7663.95. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.61%, ONGC up by 1.31%, Zee Entertainment up by 1.26%, Hindustan Unilever up by 1.16% and Ultratech Cement up by 1.13%. On the flip side, Idea Cellular down by 3.63%, PNB down by 2.09%, ICICI Bank down by 1.83%, Tata Motors down by 1.52% and Hindalco down by 1.14% were the top losers.

Asian markets were trading mostly in green; KOSPI Index was up by 0.13%, Shanghai Composite up by 0.09%, Jakarta Composite up by 0.18%, Taiwan Weighted up by 0.84% and Hang Seng up by 0.55%. On the flip side, Nikkei 225 was down by 0.74% and FTSE Bursa Malaysia KLCI was down by 0.16%.