Benchmarks trim gains; hover around neutral line

Indian equity benchmarks trimmed its gains and are hovering near the neutral line in the late afternoon session on account of selling in front line blue chip counters taking cues from European counterparts. The sentiments were under pressure after Moody’s poll stated that the greatest challenge facing the Indian economy is exposure to external shocks such as interest rate hike in the US and slowdown in China and the risk has risen since last year. Traders were seen piling position in Metal, Consumer Durables and IT stocks while selling was witnessed in Capital Goods, Oil & Gas and Power sector stocks. In scrip specific development, Cairn India was trading firm after a host of brokerages retained their ratings on the stock even as the company posted a 99% Y-o-Y drop in net profit to Rs 9 crore in the December quarter. The market may remain volatile as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. January 2016 series to next month i.e. February 2016 series. The near month January 2016 derivatives contracts will expire on Thursday i.e. January 28, 2016.

On the global front, the Asian markets were trading in green while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,400 and 24,400 levels respectively. The market breadth on BSE was positive in the ratio of 1669:816 while 154 scrips remained unchanged.

The BSE Sensex is currently trading at 24453.21, up by 17.55 points or 0.07% after trading in a range of 24450.81 and 24650.57. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.37%, while Small cap index up by 0.98%.

The gaining sectoral indices on the BSE were Metal up by 1.30%, Consumer Durables up by 1.18%, IT up by 0.12%, Realty up by 0.02% while, Capital Goods down by 0.90%, Oil & Gas down by 0.67%, Power down by 0.44%, PSU down by 0.23%, FMCG down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.47%, Sun Pharma up by 2.08%, HDFC up by 1.64%, ONGC up by 1.25% and Asian Paints up by 1.18%.

On the flip side, GAIL India down by 3.39%, Hero MotoCorp down by 3.32%, Larsen & Toubro down by 2.29%, Axis Bank down by 1.95% and NTPC down by 1.09% were the top losers.

Meanwhile, Indian economy is expected to get better in next six months, however lack of investment appetite in the private sector in the backdrop of lower capacity utilisation, excess supply and continuous pressure on profitability are the key areas of concern for the next few quarters, according to the Assocham-Bizcon survey. Assocham asserted that the India Inc. hopes to see better sales volume and improved capacity utilization in the next two quarters but does not expect any uptick in investment and corporate earnings even as the overall macro situation would change for better.

As per the Assocham-Bizcon survey, nearly 63 percent of the survey respondents felt the state of economy would be better in the coming six months. In terms of the domestic investment, 58.3 percent respondents felt there has been no change in the investment plans at the level of individual companies. Further, 62.5 percent respondents in the survey have said that the January-March quarter of 2016 would not see much change in investment levels. As many as 41.7 percent of respondents felt there was a decline in sales volume during October-December 2015 and expected better volumes during January to March 2016, while 45.8 percent expect their sales volumes to increase in future. In terms of future of capacity utilisation, 66.7 percent said the industry will be engaged at higher levels. Besides, 54.2 per cent said there was no change in the cost of credit during October to December 2015.

Sharing concerns brought out by the respondents in terms of pressure on profitability and lack of investment, Assocham secretary general D.S. Rawat has said that global deflationary situation creeping into India in several sectors is hitting investor sentiment. He added that the consumer confidence can return only if there are more job opportunities through higher investment into productive areas of the economy like construction, infrastructure and manufacturing.

The CNX Nifty is currently trading at 7421.90, down by 0.55 points or 0.01% after trading in a range of 7421.90 and 7487.15. There were 23 stocks advancing against 26 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Cairn India up by 5.23%, Ambuja Cement up by 2.15%, Sun Pharma up by 2.05%, Tata Steel up by 2.02% and HDFC up by 1.52%.

On the flip side, Hero MotoCorp down by 3.60%, GAIL India down by 3.45%, Larsen & Toubro down by 2.38%, Axis Bank down by 1.98% and BPCL down by 1.58% were the top losers.

The Asian markets were trading in green; KOSPI Index increased 14 points or 0.74% to 1,893.43, Shanghai Composite increased 21.95 points or 0.75% to 2,938.52, Jakarta Composite increased 49.23 points or 1.1% to 4,505.97, Taiwan Weighted increased 137.97 points or 1.78% to 7,894.15, Nikkei 225 increased 152.38 points or 0.9% to 17,110.91 and Hang Seng increased 259.63 points or 1.36% to 19,340.14.

Malaysian stock exchange was closed on account of ‘Thaipusam’ holiday.

The European markets were trading in red; France’s CAC decreased 9.89 points or 0.23% to 4,326.80, Germany’s DAX decreased 6.05 points or 0.06% to 9,758.83 and UK’s FTSE 100 decreased 3.19 points or 0.05% to 5,896.82.