Benchmarks continue weak trade; IT, Banking drag

Indian equity benchmarks continued their weak trade in the afternoon session on account of selling in frontline blue chip counters tailing weak global counterparts. Investor sentiment was dampened as Nikkei India Services Business Activity Index eased to 52 in September from 54.7 in August, pointing to a slower and moderate rate of expansion. Sentiments also 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. However, losses remained capped on the back of sharp buying witnessed in Realty, Metal, FMCG, Capital Goods and Auto stock. Some support also came with International Monetary Fund (IMF) latest assessment of global growth stating that 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. In scrip specific development, Jindal Steel and Tata Steel rose about 1 percent each after the government extended the Minimum Import Price (MIP) regime on 66 steel items for a further period of two months.

On the global front, Asian markets were trading mixed on reports that the European Central Bank's governing council had reached an informal consensus on winding down its quantitative easing programme. Back home, the BSE Sensex is currently trading at 28261.33, down by 73.22 points or 0.26% 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 0.31%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Realty up by 1.45%, Metal up by 0.79%, FMCG up by 0.33%, Capital Goods up by 0.12% and Auto up by 0.09%, while IT down by 0.59%, Bankex down by 0.54%, TECK down by 0.33%, Consumer Durables down by 0.22% and Power down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.93%, Hindustan Unilever up by 1.35%, SBI up by 1.04%, Tata Motors up by 0.93% and Maruti Suzuki up by 0.86%. On the flip side, ONGC down by 1.41%, Axis Bank down by 1.24%, Mahindra & Mahindra down by 1.23%, Dr. Reddys Lab down by 1.18% and Adani Ports &Special down by 0.95% 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 product 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 8747.35, down by 21.80 points or 0.25% after trading in a range of 8733.95 and 8806.95. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.50%, Asian Paints up by 2.09%, Tata Motors - DVR up by 1.96%, Ultratech Cement up by 1.33% and Hindustan Unilever up by 1.28%. On the flip side, Axis Bank down by 1.29%, ONGC down by 1.19%, Bajaj Auto down by 1.19%, Mahindra & Mahindra down by 1.15% and NTPC down by 1.15% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 2.41 points or 0.15% to 1,663.66, Shanghai Composite increased 6.22 points or 0.21% to 3,004.70, Hang Seng increased 56.77 points or 0.24% to 23,746.21 and Nikkei 225 increased 83.59 points or 0.5% to 16,819.24. On the other hand, Jakarta Composite decreased 68.56 points or 1.25% to 5,403.76, Taiwan Weighted decreased 15.49 points or 0.17% to 9,272.28 and KOSPI Index decreased 1.86 points or 0.09% to 2,053.00.