Benchmarks continue to trade in green in noon session

 Indian equity benchmarks continued to trade firm in the noon session on selective buying by funds and retail investors in heavy-weight stocks.  Sentiments remained up-beat with statement of Ravindra Dholakia, one of the three government appointees to the newly formed Monetary Policy Committee (MPC) that there will be no tug of war in the MPC. Besides, recovery in Asian counterparts coupled with the appreciation in rupee value against the dollar added some optimism on the street. Some support also came with the report that the government is working on a bouquet of reforms to play to the country's core strengths of technology, leisure travel and medical tourism.  The commerce department has circulated a cabinet note on domestic reforms to enhance earnings from services exports, detailing measures that can be implemented after due deliberations.  However, uncertainty about the election outcome has made global markets risk-averse. Investors from domestic markets are also looking ahead to the Reserve Bank of India's rate-setting meeting on October 4, amidst the backdrop of declining retail inflation. Meanwhile, telecom stocks like Bharti Airtel, Idea Cellular and MTNL came under selling pressure after telecom regulator TRAI said it will slap show cause notices on operators for call drops that are far exceeding the norm.  On the other hand, stocks related to oil & gas sector gained traction on Moody's Investors Service’s report that  India's petroleum consumption will grow at 6 percent in 2017-18, double the rate at which fuel demand in China is projected to grow. The market will remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. September 2016 series to next month i.e. October 2016 series. The near month September 2016 derivatives contracts will expire on Thursday i.e. September 29, 2016.

On the global front, several Asian markets advanced on Tuesday, erasing losses as US futures rose, with investors viewing Democratic candidate Hillary Clinton as having gotten the upper hand in the first U.S. presidential debate that pitted her against Republican hopeful Donald Trump. Markets participants also kept an eye on an informal OPEC meeting in Algeria.

Back home, stocks from information technology (IT), Realty and Auto counters were supporting the markets’ uptrend, while those from Capital Goods, Oil & Gas and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, IRB Infrastructure has surged after the company received letter of award from the National Highways Authority of India (NHAI) for Rs 2100 crore highway project in Rajasthan and Gujarat. Furthermore, Mukta Arts has rallied after the company said that it is planning to transfer its entire business of cinema division to its wholly-owned subsidiary Mukta A2 Cinemas.

The market breadth remained optimistic as there were 1399 shares on the gaining side against 914 shares on the losing side, while 177 shares remained unchanged.

The BSE Sensex is currently trading at 28379.94, up by 85.66 points or 0.30% after trading in a range of 28319.79 and 28432.74. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43%, while Small cap index up by 0.78%.

The few gaining sectoral indices on the BSE were IT up by 1.01%, TECK up by 0.76%, Realty up by 0.51%, Auto up by 0.44% and Power up by 0.38%, while Capital Goods down by 0.36%, Oil & Gas down by 0.20% and FMCG down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.63%, Asian Paints up by 1.30%, Power Grid Corpn. up by 1.26%, Lupin up by 1.13% and Infosys up by 1.09%. On the flip side, ONGC down by 1.24%, Bharti Airtel down by 1.22%, Larsen & Toubro down by 1.08%, Adani Ports &Special down by 0.85% and ICICI Bank down by 0.44% were the top losers.

Meanwhile, Asian Development Bank (ADB), the Manila-based lender in its latest report “Asian Development Outlook 2016 Update” has said that developing economies in Asia are holding steady and will grow at the earlier forecast rate of 5.7 percent this year and next, buoyed by resilience in the region’s two largest economies, China and India. The bank said that the region’s developing economies grew 5.9 percent in 2015, and the bank was retaining its March forecasts.

Regarding India, the report said that steady progress on reforms is helping India realize its growth targets, with earlier forecasts of 7.4 per cent growth in 2016 and 7.8 per cent in 2017 unchanged. For China’s economy -the second largest in the world - it said that it is forecast to grow by 6.6 percent in 2016 and 6.4 percent in 2017, or 0.1 percentage point more than was forecast in March, due to strong fiscal and monetary stimulus to boost domestic demand while external demand remains tepid.

The India forecasts take into account a boost in private consumption after recent wage and pension increases and expectations of a healthy monsoon lifting rural incomes. The report further stated that a recovery in private investment will help drive growth to 7.8 per cent in 2017.

However, the report also warned about climate-related risks to developing Asia like shorter rainy seasons, more withering drought and worsened pest and disease outbreaks, if uncontrolled, may lead to economic loss equivalent to 10 per cent of the region’s gross domestic product in 2010. The ADB also warned policymakers against any move towards protectionism which it said “would only undermine the recovery”.

The CNX Nifty is currently trading at 8751.30, up by 28.25 points or 0.32% after trading in a range of 8733.45 and 8768.50. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 2.70% and Zee Entertainment up by 1.86% and TCS up by 1.62% and Ambuja Cement up by 1.59% and Lupin up by 1.15%. On the flip side, BPCL down by 2.14%, Bharti Infratel down by 1.46%, Tata Power down by 1.38%, Bharti Airtel down by 1.20% and Larsen & Toubro down by 0.91% were the top losers.

Asian markets were trading mixed; KOSPI Index increased 0.68%, Nikkei 225 gained 0.46% and Hang Seng was up by 1.09%. On the flip side, Jakarta Composite slipped 0.16%, FTSE Bursa Malaysia KLCI shed 0.37% and Shanghai Composite was down by 0.15%.