Benchmarks continue to trade marginally in green

Indian equity benchmarks were trading marginally in green, hovering near the neutral line in the late afternoon session. The day marked the beginning of the November series of derivatives contracts, but it appeared that investors chose to play safe. Traders remained sideline with a mixed trend in Asia and expecting that US Federal Reserve will raise interest rates by the end of this year. Investors got some conform after government is considering further relaxing foreign direct investment (FDI) norms in several areas, including trading, with an eye on more inflows. On the sectoral front, Gems and jewellery stocks like Titan, Gitanjali Gems and PC Jewellers are shinning supported by festive buying on Dhanteras.  Sugar stocks remained in focus on government's decision to extend stock limits on sugar traders by another six months till April 2017 in order to check sweetener prices, which at present are ruling around Rs 40 per kg.

On the global front, European markets were trading lower as earnings season continues amid heightened expectations that the U.S. Federal Reserve will raise rates in the near-term.

The BSE Sensex is currently trading at 27942.16, up by 26.26 points or 0.09% after trading in a range of 27789.84 and 27991.74. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.88%, while Small cap index was up by 0.94%.

The top gaining sectoral indices on the BSE were Metal up by 1.83%, Auto up by 1.22%, Realty up by 1.20%, PSU up by 1.02% and Oil & Gas up by 0.72%, while IT down by 0.07% and TECK down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.51%, Tata Motors up by 2.50%, Dr. Reddys Lab up by 1.88%, Bajaj Auto up by 1.51% and Hero MotoCorp up by 1.43%. On the flip side, ICICI Bank down by 1.99%, Cipla down by 1.23%, Bharti Airtel down by 1.22%, Asian Paints down by 1.02% and GAIL India down by 0.68% were the top losers.

Meanwhile, in order to check sugar prices and discourage hoarding, Union Cabinet has approved extending the stock limit on sugar by six months from October 29, 2016 to April 28, 2017. A decision in this regard was taken in the Cabinet meeting chaired by Prime Minister Narendra Modi, stating that Cabinet has given its approval for extending the validity of the existing Central Order in respect of Sugar for a further period of six months from October 29, 2016 to April 28, 2017.

The official statement said that the main objective of the decision is to enable states to issue control order with the prior concurrence of central government, for fixing stock limits/licensing requirements in respect of sugar, whenever need is felt by them. This is expected to help in the efforts being taken to improve the availability of these commodities to general public at reasonable rates and control the tendencies of hoarding and profiteering. Sugar is currently quoting Rs 40-Rs 43 per kg in retail markets.

Earlier this year, the government had reimposed stock limits on sugar traders after a gap of five years due to rise in sugar prices following drop in domestic production, to ensure that sugar prices don’t surge due to manipulations by hoarders. Under this, each dealer or trader was allowed to stock up to 500 tonne in all states, barring parts of West Bengal. The stock-piling limit for a dealer in Kolkata and extended areas in West Bengal has been set at 1,000 tonne, which is the largest trading centre for the commodity in the country. After imposing a stock limit on traders and mills, the government had withdrawn the subsidy of Rs 4.5 per 100 kg on sugarcane production and imposed a 20% duty on export to rein in the rise in sugar prices.

The government has taken a series of measures in recent months to curb a rise in sugar prices, including suspending an earlier order for the compulsory sugar exports of 3.2 million tonne and putting curbs on stocks held by mills in the festive season. According to an estimate by the Indian Sugar Mills Association, Sugar production of India is likely to decline by 7% to 23.2 million tonnes in 2016-17 marketing year (October-September) from 25 million tonnes in the previous year.

The CNX Nifty is currently trading at 8637.85, up by 22.60 points or 0.26% after trading in a range of 8581.75 and 8649.40. There were 35 stocks advancing against 15 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Tech Mahindra up by 5.26%, Zee Entertainment up by 2.89%, Coal India up by 2.72%, Tata Motors - DVR up by 2.49% and Tata Motors up by 2.45%. On the flip side, ICICI Bank down by 2.08%, Cipla down by 1.38%, Bharti Airtel down by 1.24%, Eicher Motors down by 1.18% and Bosch down by 1.14% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 177.54 points or 0.77% to 22,954.81, Shanghai Composite dropped 8.08 points or 0.26% to 3,104.27, Jakarta Composite declined 6.84 points or 0.13% to 5,410.00 and KOSPI Index fell 4.7 points or 0.23% to 2,019.42. On the other hand, FTSE Bursa Malaysia KLCI increased 0.05 points or 0% to 1,669.08, Taiwan Weighted was up by 7.37 points or 0.08% to 9,306.92 and Nikkei 225 jumped 109.99 points or 0.63% to 17,446.41.

European markets were trading in red; Germany’s DAX decreased 94.61 points or 0.88% to 10,622.47, UK’s FTSE 100 declined 46.21 points or 0.66% to 6,940.36 and France’s CAC dropped 16.89 points or 0.37% to 4,516.68.