Benchmarks trade near low point of day; Realty stocks key dragger

Indian equity indices drifted further lower and are trading on a weak note hovering around the lowest point of the day, as investors indulged in trimming their bets after the minutes of the US Federal Reserve's September meeting indicated a possible rate hike this year. Sentiments remained subdued on the report that Industrial production data contracted once again for the month of August. IIP dipped 0.7 percent in August, due to a slump in manufacturing and mining, in the manufacturing space, capital goods brought about the maximum fall. Investors also worry over earnings season, which will commence from this week as Tata Consultancy Services is scheduled to announce its September quarter result today and Infosys will announce its results tomorrow. Besides in the macro-economic front, monthly inflation data based on consumer price index (CPI) for September is due on Thursday and wholesale price index (WPI) on Friday. Sentiment on the street weakened further on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 547.26 crore on October 10, 2016. However, losses remained capped with S&P Global Ratings, calling GST as the most important structural reform till date by the Modi government and stating that the passage of the indirect tax law gives it additional conviction of India clocking 8 percent growth in the next few years. Also, the government’s revenue collection in April to September -- the first half of the current fiscal -- saw indirect tax-mop up growing at an impressive 26 percent. The total direct and indirect tax collections at the end of September stood at Rs 7.35 lakh crore, almost half the Rs 16.26 lakh crore target for 2016-17.

On the global front, Asian markets were trading mostly lower on Thursday, turned jittery after China's September trade data showed a sharp decline in exports, raising fresh concerns about the health of the world's second biggest economy. Investors also weighed minutes from the Federal Reserve’s September meeting, which showed several policy makers said a rate increase was needed relatively soon. Risky assets have had a torrid start to the final quarter of 2016 after recent outperformance as concerns around the outcome of US elections, fallout from a 'hard Brexit' and struggling German banking sector spread turmoil in markets.

Back home, barring Oil & Gas index which gained 0.13%, all the other indices were in the negative, with Realty, Consumer Durables and Banking indices being significant losers. In scrip specific development, Cipla edged higher after the drug maker received Establishment Inspection Report (EIR) from the US Food and Drug Administration (USFDA) for its Indore facility indicating formal closure of the USFDA inspection conducted in July/August, 2015. Furthermore, Gruh Finance gained traction after the housing finance company has reported 20% year on year (YoY) rise in net profit at Rs 61.98 crore for the second quarter ended September 30, 2016.

The market breadth remained pessimistic as there were 862 shares on the gaining side against 1645 shares on the losing side, while 109 shares remained unchanged.

The BSE Sensex is currently trading at 27796.44, down by 285.90 points or 1.02% after trading in a range of 27780.70 and 28042.62. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.21%, while Small cap index down by 1.09%.

The sole gaining sectoral index on the BSE was Oil & Gas up by 0.13%, while Realty down by 2.18%, Consumer Durables down by 1.86%, Bankex down by 1.51%, Metal down by 1.39% and Power down by 1.16% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.70%, Infosys up by 1.59%, Cipla up by 1.23%, Asian Paints up by 0.38% and Mahindra & Mahindra up by 0.28%. On the flip side, Adani Ports &Special down by 3.20%, Tata Motors down by 2.97%, HDFC down by 2.79%, ICICI Bank down by 2.60% and SBI down by 1.88% were the top losers.

Meanwhile, the National Institution for Transforming India (NITI) Aayog has rejected Oil ministry’s demand for Rs 10,000 crore to build new reserves as the proposal strays from the agreed plan to rope in private sector investments for crude storage beyond the present 5 million tonnes. Niti Aayog  said that there was no plan fund allocated for the project as well as any funding tie-up for it from other resources. It also said that the ministry had decided to involve the private sector in building and operating strategic storage during the preparation of the 12th Five Year Plan. 

It further said that there is significant interest in global crude oil majors to create storages to secure markets and also on arbitrage on fluctuating prices. As regards energy security, as long as the crude is stored on their mainland, they will always have the first right. Niti Aayog, therefore, added that is not in agreement with the proposal and recommended that the ministry ought to come up with a policy to encourage private sector investment instead of deploying government funds.

Under the first phase, India built 5.33 million tonnes storages at Visakhapatnam, Mangalore and Padur to provide for 12 day supply cover. Of this, Visakhapatnam has been commissioned while the other two are slated to start by end of this year. Under Phase II, the petroleum ministry plans to build an additional 10 million tonnes of storage capacity at Bikaner (5.6 million) in Rajasthan and Chandikhol (4.4 million) in Odisha to take the strategic cover to 99 days from current 75 days (63 days at refinery plus 12 days strategic). For this purpose it had asked the Ministry of Finance to provide Rs 10,000 crore partly from plan funds and partly out of the oil industry development cess collected on crude oil production as there is no Budget provision for this project.

The CNX Nifty is currently trading at 8618.00, down by 90.80 points or 1.04% after trading in a range of 8613.35 and 8681.55. There were 8 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.99%, Infosys up by 1.88%, Cipla up by 1.35%, Ultratech Cement up by 0.78% and BPCL up by 0.56%. On the flip side, Adani Ports &Special down by 3.26%, Bank of Baroda down by 3.21%, Tata Motors down by 3.07%, Zee Entertainment down by 2.82% and HDFC down by 2.81% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 1.27%, Nikkei 225 decreased 0.44%, Taiwan Weighted dipped 0.36%, KOSPI Index dropped 0.67%, Jakarta Composite slipped 0.16% and FTSE Bursa Malaysia KLCI was down by 0.3%. On the flip side, Shanghai Composite was up by 0.08%.