Feeble global cues drag benchmarks lower in early deals

Pressurized by feeble global cues, Indian equity benchmarks have made a weak start and are trading lower in early deals on Tuesday, with frontline gauges breaching their crucial 8,800 (Nifty) and 28,600 (Sensex) levels. However, losses remained capped as some support came with global rating agency S&P projecting India to clock 8% growth over next few years and stating that India's structural reform agenda has maintained strong momentum and should propel growth higher. Traders also got some sigh of relief with the Finance Ministry setting at rest confusion over levy of excise duty and stating that there is no 'legal infirmity' in the notifications issued by the government with regard to the GST Constitution Amendment Act.

Global cues remained dampened with most of the Asian peers were trading in red at this point of time on decline in oil and amid countdown for the policy decisions by the Bank of Japan and the Federal Reserve. The US markets continued their lackluster trade and ended modestly in red in the last session. Markets though moved higher in early deals on support of overseas markets strength but lost pace ahead of the Federal Reserve's monetary policy announcement later this week.

Back home, the telecom stocks edged lower despite reports that Seven telecom firms, which have applied to participate in the upcoming spectrum auction beginning October 1, making earnest money deposit of Rs 14,653 crore to acquire rights to use spectrum in seven frequencies, lower than the deposit of Rs 19,711 crore in February 2015 auctions, when lesser bands were up for grabs. Stocks related to Aviation space too were trading lower despite reports that domestic air passenger traffic increasing by 23.98 per cent during August to 83.81 lakh, further the data from Directorate General of Civil Aviation (DGCA) showed that the passenger traffic during January-August period grew by 23 per cent.

The BSE Sensex is currently trading at 28554.66, down by 79.84 points or 0.28% after trading in a range of 28517.70 and 28698.81. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.16%, while Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.48%, Oil & Gas up by 0.34%, Energy up by 0.14% and PSU up by 0.11%, while Realty down by 0.79%, IT down by 0.52%, TECK down by 0.45%, Bankex down by 0.45% and Capital Goods down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.22%, Dr. Reddys Lab up by 1.21%, Cipla up by 1.10%, Maruti Suzuki up by 0.84% and Asian Paints up by 0.63%. On the flip side, Adani Ports &Special down by 1.48%, Hero MotoCorp down by 1.14%, Infosys down by 0.85%, Bharti Airtel down by 0.79% and Bajaj Auto down by 0.71% were the top losers.

Meanwhile, World’s leading provider of independent credit ratings, Standard & Poor's (S&P) Global Ratings,  in its latest report titled ‘APAC Economic Snapshots--September 2016’ projected that India will clock a steroid-free growth of 8% over the next few years, backed by broadening of domestic consumption base. The report stated that India’s structural reform agenda has maintained strong momentum and should propel growth higher.

S&P said that country's structural reform agenda has maintained strong momentum, most recently with the Goods and Services Tax (GST) passage, and should propel growth higher. It also said that inflation remains a risk, given the large weights on food, fuel, and other volatile items in the Reserve Bank of India's (RBI) target basket.

The latest gross domestic production (GDP) data showed that India's growth slowed to 7.1% in the April-June quarter, from 7.9% in January-March period. Besides, RBI too has said that the near-term growth outlook for India seems brighter than last fiscal and the economy is likely to expand at 7.6% in 2016-17.

The CNX Nifty is currently trading at 8782.75, down by 25.65 points or 0.29% after trading in a range of 8767.45 and 8816.45. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.22%, Dr. Reddys Lab up by 1.16%, Cipla up by 1.05%, Aurobindo Pharma up by 0.84% and Maruti Suzuki up by 0.65%. On the flip side, Adani Ports &Special down by 1.56%, Hero MotoCorp down by 1.43%, Kotak Mahindra Bank down by 1.33%, Bharti Airtel down by 0.94% and Infosys down by 0.88% were the top losers.

Asian nmarkets were trading mostly in red; Hang Seng decreased 49.64 points or 0.21% to 23,500.81, Nikkei 225 slipped 21.59 points or 0.13% to 16,497.70, Jakarta Composite shed 13.79 points or 0.26% to 5,308.05, FTSE Bursa Malaysia KLCI fell 3.95 points or 0.24% to 1,647.76 and Shanghai Composite was down by 1.97 points or 0.07% to 3,024.08. On the flip side, KOSPI Index increased 3.09 points or 0.15% to 2,018.87 and Taiwan Weighted was up by 13.76 points or 0.15% to 9,166.64.