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

After trading on a cautious note through the morning session, Indian equity markets have now slipped into negative territory in absence of positive triggers which could take them higher, also there were profit booking in frontline line blue-chip stocks amid investors betting on a hike in interest rates by the US Fed before the end of the year. Sentiments remained down-beat on report that foreign institutional investors (FIIs) continued selling in equity markets. Foreign institutional investors were net sellers in equities worth Rs 946 crore on October 15, as per provisional stock exchange data. Besides, fall in foreign exchange reserve and weakness in the rupee against the dollar too dampened sentiment. Indian rupee turned weak by 12 paise to 66.83 against the dollar in early trade after the American currency gained ground following a spurt in demand from importers.  However, losses remained capped 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. Some support also came 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.

On the global front, Asian markets were trading mostly in green, as investors avoid taking risks after Federal Reserve Chair Janet Yellen's comments that aggressive steps may be required to address the lingering effects of the financial crisis on the US economy. Caution over a slew of Chinese economic data due out this week saw Hong Kong markets slip, but property stocks gained thanks to a strong weekend of sales. Japanese markets rose, as shares likely received a boost from a relatively weaker yen which is positive for exporters as it increases their overseas profits when converted back to local currency.

Back home, stocks from Banking, Consumer Durables and PSU counters were supporting the markets, while those from Auto, Capital Goods and Realty counters were adding to the underlying cautious undertone. In scrip specific development, ICICI Bank has rallied 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. Furthermore, Fortis Healthcare has surged after the company completed the acquisition of 51% stake in Fortis Hospotel and acquired compulsorily convertible preference shares issued by Escort Heart Institute and Research Centre. The market breadth remained optimistic as there were 1341 shares on the gaining side against 1153 shares on the losing side, while 162 shares remained unchanged.

The BSE Sensex is currently trading at 27650.75, down by 22.85 points or 0.08% after trading in a range of 27641.39 and 27803.21. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.33%, while Small cap index up by 0.20%.

The few gaining sectoral indices on the BSE were Bankex up by 1.00%, Consumer Durables up by 0.25% and PSU up by 0.10%, while Auto down by 1.21%, Capital Goods down by 0.74%, Realty down by 0.73%, TECK down by 0.56% and Oil & Gas down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 6.70%, NTPC up by 1.41%, Axis Bank up by 1.21%, SBI up by 0.87% and ONGC up by 0.51%. On the flip side, Mahindra & Mahindra down by 2.08%, Bharti Airtel down by 1.93%, HDFC Bank down by 1.42%, Asian Paints down by 1.34% and Hero MotoCorp down by 1.10% were the top losers.

Meanwhile, highlighting his government's initiatives to streamline and simplify governance, mainly in doing business in India, Prime Minister Narendra Modi has said that currently India has transformed into one of the world's most open economies. He further said that the country has moved up in almost all global indices that measure such performances. He indicated that the economic growth of the country is strong and they are taking steps to keep the momentum going.

The government has undertaken a slew of reforms like passing the indirect taxation legislation on goods and services tax which seeks to make the country a single market, passing the Bankruptcy Code which will help troubled/failed companies find an exit, and through flagship programmes on the administrative front like the ‘Make in India’ and the ‘Digital India’ initiatives. The government has also been consistently raising caps on foreign holding in domestic companies in a slew of sensitive sectors like defence insurance and defence. All this has had India's ranking in ease of doing business go up by multiple notches in a year to 39 according to the latest ranking by the World Bank.

Modi added that there were many “matching priorities” between the business council and that of his administration, including dismantling trade barriers, promoting skills development, establishing manufacturing supply chains and infrastructure development. He also said that there is need to create clear norms and structures to stop tax evasion, and fight against black money and corruption. He added that Infrastructure has been a key focus and investment of an estimated $1 trillion has been made to build roads/highways, airports and seaports over the next decade.

The CNX Nifty is currently trading at 8564.25, down by 19.15 points or 0.22% after trading in a range of 8564.25 and 8615.40. There were 9 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 7.01%, NTPC up by 1.38%, Axis Bank up by 1.34%, SBI up by 0.85% and Coal India up by 0.59%. On the flip side, Eicher Motors down by 2.36%, Tech Mahindra down by 2.28%, Mahindra & Mahindra down by 2.05%, BHEL down by 2.03% and Zee Entertainment down by 1.90% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 0.24%, Taiwan Weighted rose 0.12%, KOSPI Index gained 0.37%, Jakarta Composite added 0.33% and Nikkei 225 was up by 0.37%. On the flip side, Hang Seng decreased 0.75% and FTSE Bursa Malaysia KLCI was down by 0.07%.