Profit booking drag benchmarks lower in early deals

Indian equity benchmarks have made a weak start with frontline gauges trading slightly in red in early deals, as traders opted to book some of the profit after two sessions of continuous rally. Sentiments remained down-beat on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 537.46 crore yesterday, as per provisional data released by the stock exchanges. However, losses remained capped with market participants getting some support with report of good advancement of monsoon, which after a delay is now romping its way through central and north India, allowing farmers to finally begin sowing. Global cues too remained supportive with most of the Asian counters trading in green at this point of time on growing expectations that British voters will opt to remain in the European Union in this week's referendum. Back home, banking counters witnessed selling after the finance ministry in its quarterly revision on interest rates on small savings schemes kept the rates unchanged for Q2 September 2016. The government now announces revision in interest rates on small saving schemes on quarterly basis as against the earlier practice of annual revision. On the flip side, Pharma, defence and airlines stocks remained on buyers’ radar after government opened the floodgates to foreign direct investment.

The BSE Sensex is currently trading at 26806.66, down by 60.26 points or 0.22% after trading in a range of 26781.73 and 26925.64. There were 13 stocks advancing against 16 stocks declining on the index. While one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index up by 0.35%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.65%, PSU up by 0.60%, Metal up by 0.49%, Realty up by 0.42% and Utilities up by 0.34% while, Telecom was down by 0.56%, Bankex down by 0.42%, Capital Goods down by 0.40%, Consumer Durables down by 0.16% and FMCG down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 1.61%, ONGC up by 1.40%, Adani Ports &Special up by 1.19%, Bajaj Auto up by 0.92% and Mahindra & Mahindra up by 0.83%. On the flip side, Bharti Airtel down by 0.93%, Axis Bank down by 0.89%, HDFC Bank down by 0.81%, Larsen & Toubro down by 0.77% and Asian Paints down by 0.74% were the top losers.

Meanwhile, India Inc remains cautious about making fresh investment, with subdued demand being a key overhang for businesses, even as concerns grow over muted recovery in the industrial sector. According to the Ficci Business Confidence Survey in which 120 companies with a turnover from Rs 3 crore to Rs 65,000 crore, spanning across sectors participated, the global economic situation remains fragile and any firm recovery remains elusive as 64 per cent of the participants signalled that demand situation would remain worrisome.

The survey measured expectations of companies between April and September 2016, about 35 per cent respondents said they expect higher investments over April-September as against 41 per cent in the previous round. The companies stayed cautious about making fresh commitments and about 46 per cent saw no change in investment levels.

Infrastructure projects, including roads and highways, railways, renewable energy and defence reported good gain. However, the Overall Business Confidence Index was seven notches higher at 64.3 in the present round compared to 56.7 in the previous one. Moreover, the manufacturing growth numbers have not been very encouraging and the same is reflected in the financials of the companies as well. Besides, nearly 58 per cent of the participating companies foresee higher sales over the coming six months, as against 48 per cent earlier.

Ficci stated that 'Given the slew of measures undertaken in about past two years to kickstart investments, the respondents were asked to indicate if they have witnessed any improvement in investment activity in and around their area of operation - and a majority of them said they are yet to see investment fructifying.' Further, Ficci noted that 'The anticipated pick-up in sales despite investment intention remaining subdued indicates companies looking at rolling out unutilised capacity.'

The CNX Nifty is currently trading at 8218.10, down by 20.40 points or 0.25% after trading in a range of 8210.05 and 8257.25. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.23%, GAIL India up by 1.37%, Adani Ports & Special up by 1.21%, ONGC up by 1.12% and Mahindra & Mahindra up by 0.87%. On the flip side, Ambuja Cement down by 0.99%, Kotak Mahindra Bank down by 0.98%, Larsen & Toubro down by 0.92%, Indusind Bank down by 0.91% and Tech Mahindra down by 0.88% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 0.13 points or 0.01% to 1,634.36, Shanghai Composite gained 7.48 points or 0.26% to 2,896.29, Jakarta Composite increased 11.81 points or 0.24% to 4,875.34, Taiwan Weighted jumped 39.82 points or 0.46% to 8,665.74, Nikkei 225 added 74.77 points or 0.47% to 16,040.07 and Hang Seng was up by 97.32 points or 0.47% to 20,607.52. On the flip side, KOSPI Index was down by 3.03 points or 0.15% to 1,978.09.