Markets trade flat with positive bias; Nifty holds 8,550 mark

In the extremely range-bound session of trade, Indian equity indices altering between positive and negative territory, were now trading flat with bit of positive bias on the back of fresh buying by fund and retail investors on hopes of further rate cuts by the central bank after data showed that inflation based on consumer price index dipped to 13-month low in September. Data released by the statistics office showed consumer inflation at 4.31% in September compared with 5.05% in August and 6.07% in July. The decline was due to a steep drop in food inflation to 3.88% in September from 5.91% in August. The data raises hopes of more rate cuts as the outlook for inflation is benign for about six months and there’s good chance consumer inflation will stay below RBI’s 5% target for March 2017. Some support also came with reports that the government may seek parliamentary approval to spend about $7.5 billion more on roads, railways and other public programmes over the next five months. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 912 crore on October 13, 2016. Meanwhile, banking stocks gained traction after the central bank allowed banks to classify government securities borrowed from the central bank in the daily liquidity adjustment facility (LAF) under the statutory liquidity ratio (SLR), making liquidity management for banks easier. Furthermore, Cement stocks edged higher after the report that cement demand in the country is expected to touch 8 per cent in financial year (FY) 2017-18, helped by government's push in the infrastructure sector.

On the global front, Asian markets were trading mixed on Friday, with investors assessing price increase in China and the possibility of an interest rate hike in the U.S. later in the year. Japan's Nikkei received a boost from a relatively weaker Japanese yen, while equities in Thailand rose on prospects for a smooth transition following the death of King Bhumibol Adulyadej. Investors got some confidence after Chinese inflation data beat expectations, boosting optimism about the strength of the world’s second-largest economy.

Back home, stocks from Oil & Gas, Capital Goods and PSU counters were supporting the markets’ uptrend, while those from Consumer Durables, Metal and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, Infosys hit 52-week low of Rs 996, after the company lowered its revenue guidance for FY17 to 8%-9% from 10.5%-12% in constant currency terms. On the other hand, Granules India has gained after the company received approval from the US health regulator for anti-inflammatory drug Ibuprofen tablets in the US market.

The market breadth remained optimistic as there were 1494 shares on the gaining side against 810 shares on the losing side, while 169 shares remained unchanged.

The BSE Sensex is currently trading at 27677.65, up by 34.54 points or 0.12% after trading in a range of 27548.18 and 27763.54. 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 0.60%, while Small cap index up by 0.47%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.42%, Capital Goods up by 0.93%, PSU up by 0.79%, Power up by 0.45% and Bankex up by 0.17%, while Consumer Durables down by 0.50%, Metal down by 0.32%, TECK down by 0.30%, FMCG down by 0.26% and IT down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.90%, ONGC up by 1.67%, Larsen & Toubro up by 1.48%, Power Grid up by 1.38% and SBI up by 1.20%. On the flip side, Hindustan Unilever down by 2.30%, Lupin down by 1.38%, Bharti Airtel down by 1.03%, HDFC down by 0.82% and Bajaj Auto down by 0.56% were the top losers.

Meanwhile, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi has given its approval for nearly Rs 1,955 crore highway project for construction of a link between Sahibganj in Jharkhand to Manihari in Bihar, including for a bridge on the Ganga.  

The new link road project will be approximately 16 km long, starting from Sahibganj Pass in Jharkhand to another six-km stretch near Narenpur junction of NH-133B and NH-131A on Manihari bypass in Bihar. The project includes a four-lane bridge on the Ganga river and this will help in expediting the improvement of infrastructure in Bihar and Jharkhand and also in reducing the time and cost of travel, particularly heavy traffic in the area between the two states. Also, it would increase employment potential for local labourers for project activities.  

The estimated project cost of Rs 1,954.77 crore includes cost of land acquisition, resettlement and rehabilitation and other pre-construction activities. The total length of the road to be developed is approximately 22 kms and the concession period of the project is 19 years, including a construction period of four years.

The new highway project is a new formation of the missing link at NH-131A to NH-133B connecting Sahibganj in Jharkhand and Manihari in Bihar. At present, there is a missing link between Jharkhand to Bihar as there is no bridge on the Ganga at this point.  

The CNX Nifty is currently trading at 8574.70, up by 1.35 points or 0.02% after trading in a range of 8549.80 and 8600.20. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.97%, Larsen & Toubro up by 1.49%, ONGC up by 1.48%, Reliance Industries up by 1.24% and Power Grid up by 1.23%. On the flip side, Zee Entertainment down by 3.26%, Hindustan Unilever down by 2.28%, Lupin down by 1.38%, Eicher Motors down by 1.32% and Idea Cellular down by 1.18% were the top losers.

Asian markets were trading mixed; Taiwan Weighted decreased 0.59%, Shanghai Composite dropped 0.3%, FTSE Bursa Malaysia KLCI slipped 0.16% and Jakarta Composite was down by 0.05%. On the flip side, KOSPI Index increased 0.49%, Nikkei 225 gained 0.41% and Hang Seng was up by 0.57%.