Benchmarks continue lackluster trade in late morning session

Indian equity benchmarks continued their lackluster trade gyrating around neutral line in the late morning session. Investors were cautious ahead of US elections which is due next week and US Federal Reserve meeting which starts today. The rupee strengthened against the US dollar on increased selling of American currency by exporters and banks. The infrastructure sector recorded a growth rate of 5% in September, the highest in three months, made the rupee stronger. The Core sector output rose to three months high by 5% in September, compared to growth of 2.4% in the year-ago period, on the back of a sustained growth in the steel sector and a rise in refinery products. A private report has highlighted that the Indian economy is well-prepared, even if not completely immune, for any external risk in case the US Federal Reserve normalizes rates in December. The report stated that while this is a source of concern for most emerging markets, the Indian economy is well-prepared even if not completely immune to any resultant volatility. Separately, according to Controller General of Accounts data, fiscal deficit was Rs 4,47,988 crore for the six-month period ending September, accounting for 83.9% of the Rs 5,33,904 crore budgeted for the entire year. The deficit widened to 83.9% for April-September 2016 against 68.1% in the corresponding previous period. This is on the back of higher government spending. Foreign institutional investors sold shares worth Rs 107 crore while domestic institutional investors bought shares worth Rs 13 crore in Sunday’s special trading session. Traders were seen piling position in Metal, Auto and Oil & Gas stocks, while selling was witnessed in IT, Consumer Durables and Realty sector stocks. In scrip specific development, Glenmark Pharmaceuticals was trading firm on debt reduction plan. There were reports that improved sales in the US market could help the firm substantially cut its Rs 4,600 crore debt in FY2016-17.

On the global front, Asian shares were trading mostly in red, following the US indices which closed marginally in the red after very range bound trade. Factory activity in China expanded at its fastest pace in more than two years last month, official and private measures both showed, boding well for the world’s second-largest economy. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,600 and 27,900 levels respectively. The market breadth on BSE was positive in the ratio of 1213:1159, while 75 scrips remained unchanged.

The BSE Sensex is currently trading at 27911.90, down by 18.31 points or 0.07% after trading in a range of 27872.15 and 27991.89. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.08%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were Metal up by 1.87%, Auto up by 0.15%, Oil & Gas up by 0.11% and PSU up by 0.07%, while IT down by 0.93%, Consumer Durables down by 0.90%, Realty down by 0.78%, TECK down by 0.75% and Capital Goods down by 0.34% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.97%, GAIL India up by 1.41%, Mahindra & Mahindra up by 1.29%, Tata Steel up by 1.03% and Power Grid up by 0.66%.

On the flip side, ONGC down by 1.91%, Axis Bank down by 1.66%, Infosys down by 1.16%, TCS down by 0.97% and Sun Pharma down by 0.89% were the top losers.

Meanwhile, the growth of eight core infrastructure industries rose to three months high by 5% in September 2016, as compared to growth of 2.4% in the year-ago period, on the back of a sustained growth in the steel sector and a rise in refinery products. The Eight Core Industries comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP). Its cumulative growth during April to September, 2016-17 was 4.6%.

As per the data of Ministry of Commerce & Industry, the combined Index of Eight Core Industries stood at 176.1 in September, 2016, 5% higher compared to the index of September, 2015. Among the eight sectors that make up the core sector, Steel production having weight of 6.68%, surged 16.3% in September, 2016 over September, 2015. Its cumulative index during April to September, 2016-17 increased by 7.2% over the corresponding period of previous year. Petroleum Refinery production having weight of 5.94% jumped 9.3% in September, 2016 over September, 2015. Its cumulative index during April to September, 2016-17 increased by 7.9% over the corresponding period of previous year.

Cement production having weight of 2.41% rose by 5.5% in September, 2016 over September, 2015. Its cumulative index during April to September, 2016-17 increased by 4.5% over the corresponding period of previous year. Electricity generation having weight of 10.32% increased by 2.2% in September, 2016 over September, 2015. Its cumulative index during April to September, 2016-17 increased by 5.1% over the corresponding period of previous year. Fertilizer production having weight of 1.25% increased by 2.0% in September, 2016 over September, 2015. Its cumulative index during April to September, 2016-17 increased by 5.6% over the corresponding period of previous year.

On other hand, Coal production having weight of 4.38% dropped by 5.8% in September, 2016 over September, 2015, while its cumulative index during April to September, 2016-17 increased by 1.2% over corresponding period of previous year. Crude Oil production having weight of 5.22% has declined by 4.1% in September, 2016 over September, 2015. Its cumulative index during April to September, 2016-17 declined by 3.3% over the corresponding period of previous year. The Natural Gas production having weight of 1.71% has declined by 5.5% in September, 2016 over September, 2015. Its cumulative index during April to September, 2016-17 declined by 4.4% over the corresponding period of previous year.

The CNX Nifty is currently trading at 8632.40, up by 6.70 points or 0.08% after trading in a range of 8614.50 and 8653.40. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.31%, Eicher Motors up by 3.01%, HDFC up by 2.46%, Bharti Infratel up by 2.30% and BHEL up by 1.62%.

On the flip side, Tech Mahindra down by 1.82%, ONGC down by 1.76%, Axis Bank down by 1.61%, Tata Power down by 1.60% and Kotak Mahindra Bank down by 1.27% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 17.12 points or 0.18% to 9,273.00, Nikkei 225 decreased 7.44 points or 0.04% to 17,417.58, KOSPI Index decreased 5.59 points or 0.28% to 2,002.60 and FTSE Bursa Malaysia KLCI decreased 0.06 points or 0% to 1,672.40.

On the other hand, Jakarta Composite increased 4.87 points or 0.09% to 5,427.41, Shanghai Composite increased 12.63 points or 0.41% to 3,113.12 and Hang Seng increased 271.25 points or 1.18% to 23,205.79.