Benchmarks continue to trade in red in noon session

Recovering from day’s low, Indian equity indices gained momentum, however were still trading below the neutral line, on persistent profit-booking by funds and retail investors. Sentiments remained subdued with a World Bank research predicting that the proportion of jobs threatened in India by automation is 69 per cent and in China it is 77 per cent. Domestic sentiment was also hit as US equities ended lower after the wake of a report that the European Central Bank could start winding down its quantitative-easing program ahead of schedule. However, losses remained capped as International Monetary Fund (IMF) in its latest assessment of global growth said India’s economy is recovering strongly, bumping up the country’s growth forecast for the current and next year as it warned of subdued global growth that could fuel protectionism. In its update of the World Economic Outlook (WEO), the IMF has forecasted, India will grow 7.6% this fiscal and next, up from 7.4% estimated in July for both the years.  Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 344.13 crore on October 04, 2016. Meanwhile, steel stocks gained traction after the government has extended the minimum import price (MIP) on 66 steel products by another two months to protect the industry against cheap imports. Telecom stocks edged higher with reports that spectrum auction received additional bids worth Rs 3,100 crore on the third day to take total commitments to Rs 59,981 crore, leaving two-thirds of total quantum of on-offer airwaves unsold as bidders stayed away from high-cost 700 Mhz and 900 Mhz bands.

On the global front, Asian markets were trading mixed on Wednesday, reflecting renewed investor concerns that the US Federal Reserve would raise interest rates by the year’s end.  The regional markets were also rattled by a report flagging the possible withdrawal of the European Central Bank's bond buying program. However, Japanese market is extending gains from the previous session, with exporters advancing on a weaker yen. Meanwhile, US stocks closed lower on Tuesday, pressured by a rising dollar, while investors digested data from the International Monetary Fund and remarks from a Federal Reserve official.

Back home, stocks from Realty, Metal and FMCG counters were supporting the markets, while those from information technology (IT), Oil & Gas and Consumer Durables counters were adding to the underlying cautious undertone. In scrip specific development, Alembic Pharmaceuticals has surged after the drug maker receives Establishment Inspection Report (EIR) from US drug regulator for its formulation facility located at Panelav, Gujarat. Moreover, Eastern Treads has jumped the company secured the tender for supplying the tyre retreading materials to Kerala State Road Transport (KSRTC).

The market breadth remained optimistic as there were 1504 shares on the gaining side against 914 shares on the losing side, while 119 shares remained unchanged.

The BSE Sensex is currently trading at 28292.52, down by 42.03 points or 0.15% after trading in a range of 28231.96 and 28477.65. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index up by 0.53%.

The top gaining sectoral indices on the BSE were Realty up by 1.42%, Metal up by 0.86%, FMCG up by 0.30%, Auto up by 0.24% and Power up by 0.17%, while IT down by 0.69%, Oil & Gas down by 0.54%, TECK down by 0.38%, Consumer Durables down by 0.37% and Bankex down by 0.29% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.21%, SBI up by 1.35%, Hindustan Unilever up by 1.29%, Tata Motors up by 1.17% and Maruti Suzuki up by 0.90%. On the flip side, ONGC down by 1.55%, Dr. Reddys Lab down by 1.18%, Axis Bank down by 1.03%, Wipro down by 0.96% and Mahindra & Mahindra down by 0.91% were the top losers.

Meanwhile, in order to support the domestic steel industry, the government has decided to extend the Minimum Import Price (MIP) regime on 66 steel products by another two months till 4 December. The 66 products include semi-finished products of iron or non-alloyed steel, flat-rolled products of different widths, bars and rods.

The Directorate General of Foreign Trade, under the ministry of commerce and industry, notified that “As per the applicable laws and powers conferred to the department by the government of India, the period of MIP has been extended on 66 steel products by two months till 4 December.”

Government in February had imposed MIP, ranging between $341 to $752 per tonne on 173 steel products for a period of six months, in order to guard domestic steel producers against cheap in-bound shipments. Later, to save the domestic steel industry from cheap imports, especially from China, the government in August decided to extend the MIP on 66 steel products for a period of two months as against 173 items earlier.

Indian Steel Association (ISA), had asked the government to extend minimum import price (MIP) on certain products by saying its imposition has marginally improved the industry’s viability after a long period of subdued prices. Accelerating imports at predatory prices from steel surplus countries like China, Japan and Korea have been a major concern area for the domestic industry since September 2014.

The CNX Nifty is currently trading at 8756.85, down by 12.30 points or 0.14% after trading in a range of 8733.95 and 8806.95. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.82%, Asian Paints up by 2.22%, Bharti Infratel up by 1.71%, Tata Motors - DVR up by 1.69% and Tata Power up by 1.29%. On the flip side, ONGC down by 1.35%, Axis Bank down by 1.09%, Mahindra & Mahindra down by 1.07%, Dr. Reddys Lab down by 1.00% and Wipro down by 0.99% were the top losers.

Asian markets were showing a mixed trend, FTSE Bursa Malaysia KLCI gained 0.15%, Hang Seng was up by 0.44% and Nikkei 225 surged by 0.5%. On the other hand, Jakarta Composite declined by 1.25%, Taiwan Weighted lost 0.17% and KOSPI Index decreased by 0.09%.