Benchmarks gyrate around neutral line in late morning session

Indian equity benchmarks continued their lackadaisical trade gyrating around the neutral line in the late morning session in absence of any upside triggers. The domestic equity indices are likely to trade on a flat to positive note as investors react to Fed Chair Janet Yellen’s statement on the US economy and ahead of the quarterly numbers from a dozen domestic companies scheduled for release later in the day. There is no expectation of any significant changes in the earnings for the quarter except that the worst should be over for the banks. The sentiments got some support with Prime Minister Narendra Modi’s assertion that results of the reforms undertaken by his government were visible and the country has transformed into ‘one of the most open economies’ in the world with a strong growth rate. Sentiments also got some support with report that India’s export during September 2016 has shown sign of revival, registering a growth of 4.62 per cent in dollar term to $22.88 billion as compared to $21.86 billion in September 2015. However, Indian rupee opened lower against the US dollar on account of buying of American currency by banks and importers exerted some selling pressure. Traders were seen piling up positions in Bankex, PSU and Metal stocks, while selling was witnessed in Auto, Capital Goods and TECK sector stocks. In scrip specific development, ICICI Bank was trading in green after the Ruias of the Essar group signed a binding agreement with Russia’s Rosneft, United Capital Partners and Trafigura Group to sell 98% in its most priced asset, the 20 million tonnes per annum Vadinar refinery and Vadinar port in Gujarat. The proceeds of the sale will be used to repay loans of both foreign and local lenders, which was around Rs 88,000 crore. ICICI Bank has been closely working with various companies, including the Essar Group, to help them deleverage their stressed balance sheets.

On the global front, Asian shares traded mostly in green, while the dollar held firm near seven-month high against a basket of major currencies after comments from Federal Reserve Chair Janet Yellen boosted long-dated US bond yields. China reported higher than-expected inflation in September for consumers and producers alike, with producer prices rising for the first time since January 2012. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,550 and 27,700 levels respectively. The market breadth on BSE was positive in the ratio of 1465:816, while 136 scrips remained unchanged.

The BSE Sensex is currently trading at 27703.75, up by 30.15 points or 0.11% after trading in a range of 27663.82 and 27803.21. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.07%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Bankex up by 1.18%, PSU up by 0.44%, Metal up by 0.22%, Consumer Durables up by 0.11% and Oil & Gas up by 0.10%, while Auto down by 0.72%, Capital Goods down by 0.55%, TECK down by 0.33%, FMCG down by 0.17% and Power down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 5.56%, Axis Bank up by 1.81%, SBI up by 1.39%, NTPC up by 1.31% and Coal India up by 0.75%.

On the flip side, Bharti Airtel down by 2.45%, Asian Paints down by 1.21%, Adani Ports & Special Economic Zone down by 1.16%, Mahindra & Mahindra down by 1.09% and HDFC Bank down by 0.79% were the top losers.

Meanwhile, oil marketing companies (OMCs) have hiked prices of petrol and diesel by Rs 1.34 per litre and Rs 2.37 a litre respectively excluding state levies. This is the fourth consecutive price hike in petrol by the government.  The price changes effective from midnight of October 15 and October 16 were due to surge in global oil prices.

After including local VAT, Petrol will cost Rs 66.05 a litre in National capital as against Rs 64.72 per litre currently. Similarly, diesel will cost Rs 55.26 per litre in the national capital as against Rs 52.61 per litre currently.  Petrol price was last hiked by 14 paise per litre on October 5 and diesel by 10 paise a litre following an increase in commission paid to dealers. Prior to that petrol price had been hiked on three occasions, while diesel price was cut by 8 paise a litre on October 1.

According to IOC the country's largest fuel retailer, the hike in prices is due to the movement of prices in the international oil market and INR-USD exchange rate shall continue to be monitored closely and developing trends of the market will be reflected in future price changes. It further added that the current level of international product prices of petrol and diesel and INR-USD exchange rate warrant increase in selling price of petrol and diesel, the impact of which is being passed on to the consumers with this price revision.

The CNX Nifty is currently trading at 8576.55, down by 6.85 points or 0.08% after trading in a range of 8567.35 and 8615.40. There were 13 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 5.65%, Axis Bank up by 1.82%, SBI up by 1.39%, NTPC up by 1.38% and Coal India up by 0.73%.

On the flip side, Bharti Airtel down by 2.46%, Zee Entertainment down by 1.89%, Idea Cellular down by 1.61%, Tech Mahindra down by 1.54% and Eicher Motors down by 1.49% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 3.74 points or 0.12% to 3,067.55, Taiwan Weighted increased 6.4 points or 0.07% to 9,171.57, KOSPI Index increased 8.87 points or 0.44% to 2,031.53, Jakarta Composite increased 17.71 points or 0.33% to 5,417.59 and Nikkei 225 increased 45.4 points or 0.27% to 16,901.77.

On the other hand, Hang Seng decreased 127.65 points or 0.55% to 23,105.66 and FTSE Bursa Malaysia KLCI decreased 1.17 points or 0.07% to 1,657.80.