Indian Benchmarks pare some early losses; still continue to trade in red

Recovering from day’s low, Indian benchmark equity indices gained momentum however were still trading below the neutral line in red on absence of positive triggers and profit booking in frontline line blue-chip stocks which could take the markets higher. Sentiments remained subdued with the repot that foreign portfolio investors (FPIs) sold shares worth a net Rs 325.13 crore on October 24, 2016. Besides, weak trend in Asian stocks coupled with depreciation in rupee value also weighed on the domestic sentiments. Indian rupee lost 8 paise to 66.93 against the US dollar in the wake of increased demand for the American unit. However, losses remained capped with the report that Performance of States in improving the overall infrastructure for facilitating business has gone up, with a majority of them scoring over 80% in the World Bank-Department of Industrial Policy & Promotion ranking of States. The 'Make of India' programme of the government has spurred strong competition among Indian states in improving the ease of doing business in order to attract investments and drive the economies of their regions.  As many as 16 States had scored over 80% in the World Bank- DIPP ranking of States based on 340 parameters on ‘Ease of Doing Business’. Meanwhile, shares of Tata Group companies came under pressure after the board of Tata Sons announced the sudden removal of chairman Cyrus Mistry. In a dramatic development, Mistry was removed as Chairman of India’s largest conglomerate Tata Group and replaced by his predecessor Tata in the interim, a development that can trigger a confrontation between the single-largest shareholder and the company’s founding family. Mistry’s family firm Shapoorji Pallonji Group has 18.4% in Tata Sons. Further, Investors will be eyeing the quarterly results whereby in all 92 companies will announce their September quarter earnings scheduled for the day.

On the global front, Asian markets were trading mostly in red on Tuesday as upbeat reports on manufacturing in the US and Europe were followed by weak growth data from South Korea, Asia's fourth-largest economy. Investors remained cautious as oil prices dipped over disagreement within producer cartel OPEC on who should cut how much production in a planned coordinated reduction to prop up prices. However, Japanese shares hit a six-month top in the session as the dollar advanced on the yen, while risk sentiment got a lift after factory surveys in the United States and Europe boasted the best readings of the year so far.

Back on street, all sectoral indices on the BSE were trading in the red with Metal index emerging as the top loser down by over half percent followed by Oil & Gas, Realty and Consumer Durables indices among others. In scrip specific development, Idea Cellular slipped after the company reported 88% year-on-year (y-o-y) drop in its consolidated net profit at Rs 91.46 crore for the quarter ended September 30, 2016. On the other hand, Bharti Infratel has surged after the company reported 31% jump in net profit at Rs 774 crore for the quarter ended September 30, 2016.

The market breadth remained pessimistic as there were 1149 shares on the gaining side against 1282 shares on the losing side, while 181 shares remained unchanged.

The BSE Sensex is currently trading at 28108.84, down by 70.24 points or 0.25% after trading in a range of 28013.69 and 28211.41. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.26%, while Small cap index up by 0.04%.

The top losing sectoral indices on the BSE were Metal down by 0.77%, Oil & Gas down by 0.62%, Consumer Durables down by 0.48%, Realty down by 0.46% and FMCG down by 0.32%, while there were no gaining indices on the BSE sectoral front.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.10%, Sun Pharma Inds. up by 0.94%, Axis Bank up by 0.88%, Cipla up by 0.79% and Maruti Suzuki up by 0.66%. On the flip side, Tata Steel down by 2.46%, GAIL India down by 1.68%, Hindustan Unilever down by 1.37%, TCS down by 0.99% and Mahindra & Mahindra down by 0.78% were the top losers.

Meanwhile, the government is likely to impose anti-dumping duty on imports of certain flat steel products from countries including China and European Union, in a move to protect the domestic industry from cheap in-bound shipments.

The directorate general of antidumping and allied duties (DGAD) in its preliminary findings has recommended duty on imports of “colour coated / pre-painted flat products of alloy or non-alloy steel”. These steel products offers resistance to corrosion with barrier protection and it is used in many applications and sectors including construction, roofing, walling, paneling, cladding and decking, automotive, white goods, appliances and furniture.

The investigation was initiated on joint application for initiation of anti-dumping investigations by Essar Steel India and JSW Steel Coated Products. DGAD in its findings has also suggested that the duty should be the difference between the landed value of steel products and $849 per tonne. In its findings, DGAD has concluded that the product has been exported to India at below the normal value due to which the domestic industry has suffered material injury.

Imports of these steel products have drastically increased to 213,311 tonnes during the period of investigation (July- December 2015) from 60,771 tonnes in 2012-13. Government has already slapped anti-dumping duty on certain cold-rolled flat steel products from four nations, including China and South Korea.

The CNX Nifty is currently trading at 8696.70, down by 12.25 points or 0.14% after trading in a range of 8663.45 and 8722.65. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.39%, Ultratech Cement up by 1.47%, Tech Mahindra up by 1.26%, Dr. Reddys Lab up by 1.16% and Aurobindo Pharma up by 1.00%. On the flip side, Tata Steel down by 2.51%, GAIL India down by 1.79%, Idea Cellular down by 1.50%, Hindustan Unilever down by 1.49% and Tata Power down by 1.26% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 0.05%, KOSPI Index declined 0.44%, Shanghai Composite slipped 0.04%, FTSE Bursa Malaysia KLCI shed 0.1% and Jakarta Composite was down by 0.16%. On the flip side, Taiwan Weighted increased 0.68% and Nikkei 225 was up by 0.74%.