Markets trim gains in late afternoon session

Indian equity benchmarks pared some of their gain but manage to keep their head above water in late afternoon session, as some support came 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. Firm opening in European market too supported sentiment. European stocks were trading mostly higher on Tuesday after both Hillary Clinton and Donald Trump concluded the first U.S. presidential debate and industrial profits data out of China added to recent signs of economic stabilization.

Back home, the market may 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. Investors also remained wary ahead of the Reserve Bank of India's rate-setting meeting on October 4. In scrip specific development, Yes Bank move up after raising Rs 330 crore through an issue of a 7-year Green Infrastructure Bonds to FMO, the Dutch Development Bank, on a private placement basis.

The BSE Sensex is currently trading at 28332.60, up by 38.32 points or 0.14% after trading in a range of 28306.25 and 28432.74. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index was up by 0.53%.

The gaining sectoral indices on the BSE were IT up by 0.83%, TECK up by 0.61%, Consumer Durables up by 0.25%, Realty up by 0.17% and Auto up by 0.15%, while Capital Goods down by 0.51%, Oil & Gas down by 0.40%, PSU down by 0.25%, Bankex down by 0.13% and Power down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.65%, Lupin up by 1.50%, TCS up by 1.29%, Wipro up by 1.09% and Infosys up by 0.83%. On the flip side, Bharti Airtel down by 1.45%, Larsen & Toubro down by 1.30%, ONGC down by 1.00%, GAIL India down by 0.99% and Adani Ports &Special down by 0.83% were the top losers.

Meanwhile, global rating agency, Moody's Investors Service in its latest report stated that India's petroleum consumption will likely grow by 6 percent in 2017-18, double the rate at which fuel demand in China is projected to grow. Moody’s said that China's slowing economic growth will temper underlying product demand over the next 12-18 months. As per the estimations, China's demand for refined-oil products will grow around 3 percent annually in the next two years as compared with 4-5 percent on average over the past five years.

The rating agency said that slow but steady demand growth from China and India supports its stable outlook for the Asian refining and marketing (R&M) industry, despite a likely modest earnings contraction through 2017 and also anticipates EBITDA for the industry will decline by 1-3 percent through 2017. Further, the US Energy Information Administration (EIA) projects total liquid fuels consumption in the Asia Pacific to rise by 0.9 million barrels per day (bpd) in 2017 to 33.3 million bpd. China and India remain the fastest-growing product markets in Asia, collectively accounting for 80 percent of total demand growth in the region.

Moody’s said that Asian refiners have started to dial back their capacity additions and this trend is expected to continue in 2017-18, although the immediate impact on an oversupplied market will be somewhat limited. It further said that refiners have canceled, delayed or scaled back large- scale, greenfield refineries as well as capacity expansion projects that were originally planned to come on-stream over the next 18 months. It also believes that such project delays and cancellations are partly in response to the ongoing supply glut in Asia, following over 400,000 barrels per day (bpd) of new capacity from India over the past few months.

The report however stated that economic slowdown in China, industry cyclicality and capacity overhang continue to pressure Asian refiners, despite stable outlook. Moody’s may change their outlook to negative if net refining capacity additions and increasing refinery output in Asia materially outpace growth in demand, such that their projected EBITDA for the industry declines by more than 10 percent; or if demand from China and India contracts. On the other hand, it would consider a positive outlook if regional demand overwhelms capacity additions such that refining margins exceed $ 8 per barrel on a sustained basis and if it raises its EBITDA growth forecast to above 10 percent.

The CNX Nifty is currently trading at 8736.05, up by 13.00 points or 0.15% after trading in a range of 8726.05 and 8768.50. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 2.65%, Zee Entertainment up by 1.67%, Ambuja Cement up by 1.59%, Lupin up by 1.51% and Asian Paints up by 1.43%. On the flip side, Tata Power down by 1.91%, BPCL down by 1.61%, Bharti Infratel down by 1.41%, Bharti Airtel down by 1.31% and Larsen & Toubro down by 1.20% were the top losers.

Asian market were trading mostly in green; KOSPI Index increased 15.71 points or 0.77% to 2,062.82, Shanghai Composite was up by 17.74 points or 0.6% to 2,998.17, Jakarta Composite rose 19.81 points or 0.37% to 5,371.95, Nikkei 225 jumped 139.37 points or 0.84% to 16,683.93 and Hang Seng increased 253.98 points or 1.09% to 23,571.90. On other hand, FTSE Bursa Malaysia KLCI decreased 3.65 points or 0.22% to 1,665.85.

European markets were trading mostly in green; UK’s FTSE 100 was up by 1.23 points or 0.02% to 6,819.27 and France’s CAC increased 6.36 points or 0.14% to 4,414.21. On flip side, Germany’s DAX decreased 2.9 points or 0.03% to 10,390.81.