Markets trade with small gains; Sensex above 28100 mark

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were now trading with small gains, as investors and foreign funds were adopting a cautious approach, amid derivatives expiry due this week. Investors got some confidence with Prime Minister Narendra Modi’s statement that the Goods and Services Tax law will boost domestic demand, create more opportunities for domestic business and drive job creation. He also said that India is the fastest growing major economy and one of the most attractive destinations for FDI. However, market participants remained cautious with the report that Private equity investments declined 53 per cent to touch $2.5 billion during July-September this year, lowest in the last nine quarters, largely owing to absence of big ticket deals. According to the report, there were 241 PE transactions worth $2,538 million in the September quarter this year, while there were 303 deals worth $5,446 million in the corresponding period last year. Also, the decline in PE activity is due to the reduced investment in the new economy companies in comparison to the previous year when such investments were in full swing. Meanwhile, telecom majors like Bharti Airtel came under pressure after India's telecoms regulator recommended the top three network operators be fined a combined Rs 30.5 billion ($455 million), saying they were denying new entrant Reliance Jio sufficient interconnection points. Airtel and Vodafone India were fined for 21 zones each, while Idea was fined for 19 zones. Going forward, market sentiment will be dictated by investment trend of overseas investors, movement of the rupee and crude oil prices. Foreign portfolio investors (FPIs) sold shares worth a net Rs 272.91 crore on October 21, 2016 as per provisional data released by the stock exchanges. Also, the frontline Indices may experience some volatility amid derivatives expiry due on Thursday.

On the global front, Asian markets were trading with some gains but lacked clear direction on Monday after Wall Street's sluggish performance late last week, while the dollar hit a near nine-month high as comments from a Federal Reserve official boosted bets of a rate hike by year-end. Global markets are bracing for a slew of data this week including consumer price data from Japan and some euro zone countries, third quarter US GDP and a number of purchasing managers' index (PMI) data from developed economies.

Back home, stocks from PSU, Banking and Oil & Gas counters were supporting the markets’ uptrend, while those from IT, Capital Goods and Consumer Durables counters were adding to the underlying cautious undertone. In scrip specific development, Mindtree slipped after the company’s consolidated net profit declined 23% to Rs 95 crore for the quarter ended September 2016 on sequentially. On the other hand, V-Guard Industries hits record high of Rs 199, after the company reported a robust 70% year on year jump in net profit at Rs 39 crore for the quarter ended September 2016, on back of strong operational performance.
The market breadth remained optimistic as there were 1565 shares on the gaining side against 887 shares on the losing side, while 180 shares remained unchanged.

The BSE Sensex is currently trading at 28117.20, up by 40.02 points or 0.14% after trading in a range of 28075.95 and 28192.20. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were PSU up by 0.66%, Bankex up by 0.65%, Oil & Gas up by 0.64%, Auto up by 0.59% and Realty up by 0.24%, while IT down by 0.93%, TECK down by 0.86%, Capital Goods down by 0.26%, Consumer Durables down by 0.17% and FMCG down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 2.50%, ICICI Bank up by 2.45%, SBI up by 1.84%, Tata Motors up by 1.51% and GAIL India up by 1.36%. On the flip side, Wipro down by 3.71%, Asian Paints down by 1.37%, Axis Bank down by 1.02%, Bharti Airtel down by 0.89% and TCS down by 0.69% were the top losers.

Meanwhile, the Finance Ministry has called a meeting with senior managers of banks, where it will discuss the bad loans issue existing in specific sectors. The meeting will focus on non-performing assets (NPAs) in sectors like steel, power and infrastructure, which accounts for bulk of gross NPAs which surged to 9.32 percent (Rs 4.76 lakh crore) in 2015-16.

The meeting would be attended by CEO and Executive Directors of various public sector banks as well as senior officials from the steel, power and road transport ministries. The meeting assumes importance in light of Finance Minister Arun Jaitley’s recent statement that banks should enforce their right and recover dues in the larger interest of the economy.

Terming the mounting bad loans as “next big challenge” for the country, Finance Minister Arun Jaitley said that now bank have to enforce their right in the larger interest of the economy because if money keeps lying and blocked with one particular section, then your capacity to lend to others itself is adversely impacted.
Jaitley added that as far as policy relation with regard to certain sectors are concerned that being done, empowerment of banks by virtue of legislation and RBI guidelines has been done, a long rope have be given to people to improve and sort matters out. They are now coming to a stage when a lot of effective steps both legislative and in terms of policy have been taken.

The CNX Nifty is currently trading at 8697.55, up by 4.50 points or 0.05% after trading in a range of 8684.15 and 8723.05. There were 22 stocks advancing against 28 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were ICICI Bank up by 2.58%, Adani Ports &Special up by 2.38%, Bank of Baroda up by 2.27%, SBI up by 1.91% and BPCL up by 1.74%. On the flip side, Wipro down by 3.77%, HCL Tech down by 2.63%, Idea Cellular down by 1.62%, Zee Entertainment down by 1.55% and Asian Paints down by 1.44% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI gained 0.35%, KOSPI Index increased 0.49%, Jakarta Composite jumped 0.19%, Taiwan Weighted rose 0.17%, Shanghai Composite surged 1.11%, Nikkei 225 added 0.23% and Hang Seng was up by 0.43%.