Markets trades flat with positive bias in noon session

Indian equity benchmarks continued to trade flat with positive bias in noon session, following firm global cues after a subdued U.S. jobs report diminished the likelihood of a rate increase in November. Sentiments remained up-beat with credit rating agency Crisil in its latest report stating that due to the improvement in urban and rural consumption and falling global commodity prices, the profits of companies in the key sector such as automobiles, IT services, power, steel products, telecom services, pharmaceuticals and FMCG are likely to grow 7 per cent in the July-September quarter, as compared to the a marginal 2 per cent in the year ago period. Some support also came from Finance Minister Arun Jaitley’s statement that India, 'aspiring to do better in an adverse' environment, is at the world's centre stage more than ever before, though he also cautioned that by its own yardstick, the country's current growth rate is not enough. Further, appreciation in the rupee value against dollar too supported the sentiments. In scrip specific development, ITC gained a percent after announcing divestment of its entire stake in King Maker Marketing to US-based Premier Manufacturing for an estimated amount of $24 million. Moreover, Dr Reddy's Laboratories too edged up after foraying into the Colombian market to sell cancer drugs.

On the global front, Asian markets were trading mostly in green with Japanese and Hong Kong markets closed for holidays. Back home, the BSE Sensex is currently trading at 28138.32, up by 77.18 points or 0.28% after trading in a range of 28083.39 and 28216.64. 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 0.22%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.87%, Metal up by 1.52%, IT up by 1.07%, TECK up by 0.90% and FMCG up by 0.49%, while Realty down by 0.69%, Oil & Gas down by 0.45% and PSU down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.25%, Tata Steel up by 1.97%, Asian Paints up by 1.54%, Infosys up by 1.46% and GAIL India up by 1.35%. On the flip side, HDFC down by 1.07%, ONGC down by 1.05%, Bharti Airtel down by 0.98%, Adani Ports &Special down by 0.84% and NTPC down by 0.34% were the top losers.

Meanwhile, Credit rating agency Crisil in its latest report on “Corporate Profitability: Review and Outlook” has said that due to the improvement in urban and rural consumption and falling global commodity prices, the profits of companies in the key sector such as automobiles, IT services, power, steel products, telecom services, pharmaceuticals and FMCG are likely to grow 7 per cent in the July-September quarter, as compared to the a marginal 2 per cent in the year ago period.

This will be the second best revenue growth in the last six quarters mainly on the back of low-base effect (revenue growth in the corresponding quarter last fiscal was stagnant), improvement in urban and rural consumption, and low commodity prices, though the report excludes banking, financial services and insurance (BFSI) and oil companies.

As per the report, during the April-June quarter (Q1FY17), India Inc. reported 5 per cent year-on-year revenue growth, compared with stable revenue in the Q1 of FY16. Crisil estimates a 50 bps increase in operating margin (operating profit/ net sales) in the July-September quarter at 19.8 per cent, from 19.3 per cent in the year ago quarter. During the second quarter, automobile, steel products, telecom services and FMCG (fast moving consumer goods) firms are expected to record better operating margin compared with last year. On the other hand, firms in the IT services, power and pharmaceuticals are likely to witness a contraction in operating margin.

Rating agency sees automobile companies reporting 13 per cent growth on the back of new launches and healthy rural demand following a good monsoon. Retail is expected to grow 12 per cent on the back of improvement in disposable incomes and India’s economic outlook, while pharmaceuticals, driven by new launches in the US, is likely to see 13 per cent growth. IT services sector is expected to grow 10 per cent, slower than in the past, aided by volume and rupee depreciation. Consumer discretionary sectors such as airlines, cars and two-wheelers and retail are expected to grow faster than industry because of improved volumes.

The CNX Nifty is currently trading at 8723.65, up by 26.05 points or 0.30% after trading in a range of 8708.60 and 8745.80. There were 36 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were ACC up by 2.51%, Cipla up by 2.18%, Tata Steel up by 1.98%, Ambuja Cement up by 1.84% and Hindalco up by 1.77%. On the flip side, BPCL down by 1.27%, HDFC down by 0.96%, ONGC down by 0.92%, Adani Ports &Special down by 0.88% and Bank of Baroda down by 0.85% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.55 points or 0.03% to 1,665.93, KOSPI Index increased 3.02 points or 0.15% to 2,056.82 and Shanghai Composite increased 36.29 points or 1.21% to 3,041.00.

On the other hand, Jakarta Composite decreased 6.18 points or 0.12% to 5,370.97. Hong Kong Stock Exchange, Tokyo Stock Exchange and Taiwan Stock Exchange were closed on account of National holiday.