Benchmarks extend losses in noon session

Indian equity benchmarks extended their losses in the noon session with frontline gauges trading below their crucial 27,600 (Sensex) and 8,550 (Nifty) levels. Sentiments remained downbeat after rupee depreciated against dollar on account of increased demand for the American currency from importers. Traders were unable to get any respite with report that India’s export during September 2016 showed 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. Even they overlooked 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. Traders were still holding up positions in Banking, while selling was witnessed in Realty, Auto, Capital Goods, TECK and Metal sector stocks. In scrip specific development, oil marketing companies BPCL, HPCL and IOC are up about 1 percent each after hiking fuel prices. SpiceJet was up over 3 percent on news that the airline plans to add about three Bombardiers and 4 to 5 Boeings by the end of the current fiscal.

On the global front, Asian markets were trading mixed after comments from Federal Reserve Chair Janet Yellen boosted long-dated US bond yields. Back home, the BSE Sensex is currently trading at 27568.59, down by 105.01 points or 0.38% after trading in a range of 27532.81 and 27803.21. 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 0.78%, while Small cap index was down by 0.45%.

The lone gaining sectoral indices on the BSE were Bankex up by 0.45%, while Realty down by 1.53%, Auto down by 1.52%, Capital Goods down by 1.05%, TECK down by 0.71% and Metal down by 0.64% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 6.02%, NTPC up by 1.31%, Coal India up by 0.78%, Axis Bank up by 0.42% and Hindustan Unilever up by 0.40%. On the flip side, Mahindra & Mahindra down by 2.21%, Bharti Airtel down by 1.86%, HDFC Bank down by 1.79%, Hero MotoCorp down by 1.66% and Asian Paints down by 1.48% were the top losers.

Meanwhile, in order to further strengthen the global governance architecture, five-nation group BRICS (Brazil, Russia, India, China and South Africa) have agreed to set up an independent rating agency based on market-oriented principles. The BRICS groups had earlier expressed concerns against the working of the rating market, currently dominated by US-based agencies Fitch, Moody’s and S&P, stating that western credit rating agencies are unfair and have a pessimistic view towards developing nations and an optimistic one towards developed countries.

A joint declaration issued after the 8th BRICS Summit stated that “We welcome experts exploring the possibility of setting up an independent BRICS Rating Agency based on market-oriented principles, in order to further strengthen the global governance architecture.'Indian Prime Minister Narendra Modi said that to further bridge the gap in the global financial architecture, we agreed to fast track the setting up of a BRICS Rating Agency.

To meet the funding requirements of the members, the BRICS countries have already set up New Development Bank (NDB), which became operational last year. Batting for a new credit rating agency backed by BRICS group, NDB president K V Kamath expressed concerns over methodologies of the big three global agencies saying that these are constraining growth in emerging nations. Further, Kamath said that despite having deep capital buffers, the ratings of multilateral banks like the BRICS-promoted NDB are affected due to the parent countries' sovereign ratings. Citing the case of NDB itself, which is planning to get itself rated for bond-raising in many countries, he said that its rating will be affected because the promoter countries are not AAA-rated.

The CNX Nifty is currently trading at 8529.50, down by 53.90 points or 0.63% after trading in a range of 8521.45 and 8615.40. There were 6 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 6.06%, NTPC up by 1.41%, Coal India up by 0.70%, Hindustan Unilever up by 0.38% and Axis Bank up by 0.27%. On the flip side, Idea Cellular down by 2.88%, Eicher Motors down by 2.86%, Hindalco down by 2.46%, Tech Mahindra down by 2.23% and Zee Entertainment down by 2.21% were the top losers.

Asian markets were trading mixed; KOSPI Index increased 4.95 points or 0.24% to 2,027.61, Taiwan Weighted rose 11.05 points or 0.12% to 9,176.22, Jakarta Composite was up by 19.74 points or 0.37% to 5,419.63 and Nikkei 225 gained 43.75 points or 0.26% to 16,900.12. On the flip side, Hang Seng decreased 191.64 points or 0.82% to 23,041.67, Shanghai Composite declined 21.88 points or 0.71% to 3,041.93 and FTSE Bursa Malaysia KLCI was down by 2.03 points or 0.12% to 1,656.94.