Benchmarks end flat amid mixed global cues

Indian stock markets finished the session on a dull note, as investors at large remained reluctant to build on long positions ahead of US elections which is due next week and US Federal Reserve meeting which starts today.  Sentiments remained down-beat with the repot that the Centre’s fiscal deficit ballooned to 83.9 per cent of the Budget Estimates (BE) in the first half of 2016-17, the highest in the first six months of a financial year since 1998-99, on account of elevated capital spending and higher salaries outgo. On revenue side, lower realisations from disinvestment and other streams hurt the exchequer. In absolute terms, fiscal deficit, the gap between expenditure and revenue, in first half of the current financial year was Rs 4.48 lakh crore. However, the downside risk for the frontline indices was limited by reports that manufacturing sector growth in India hit a 22-month high in October, driven by a sharp and accelerated increase in new orders, purchasing activity and output. The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) - a gauge of manufacturing performance - rose to 54.4 in October from 52.1 in September, indicative of a robust improvement in manufacturing business conditions in the country. Some support also came with the report that 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. Also, a private report has said Indian economy is expected to fare better in the second half of the current fiscal backed by uptick in sales and improved capacity utilisation, though fresh investments and new jobs creation may be a concern going forward. Meanwhile, Metal and mining stocks gained traction after the release of encouraging purchasing managers index data from China, the world's largest consumer of steel, copper and aluminum. Further, mixed reactions were witnessed in auto companies stocks after reporting October sales numbers. Maruti Suzuki India, country’s largest car maker, has registered a fall of 0.3% in its total car sales (Domestic + Export) for the month of October 2016 at 133,793 units, as against 134,209 units in October 2015. Ashok Leyland has reported an increase of 28% in October 2016 sales to 12533 units, as against 9803 units sold in the same period of last year. Atul Auto has reported a sale of 5,037 units, showing a rise of 9.52% for the month of October 2016 as compared to 4,599 units sold in October 2015.

On the global front, Asian markets ended mostly lower on Tuesday, as a sell-off in oil futures, the uncertainty surrounding the US election and expectations of a December Fed rate hike offset fresh signs of strength in the world's second-largest economy. Chinese stocks ended higher after an official survey showed the country's manufacturing sector expanded at a faster pace than expected in October. The official manufacturing PMI rose to 51.2 in October from 50.4 in September, adding to signs that the world’s second-largest economy is stabilizing. Looking ahead, the market was watching out for the U.S. ISM manufacturing PMI data coming out later tonight, U.S. jobs data scheduled to be released on Friday and, of course, the U.S. presidential election next week.

Back home, the benchmark got off to a soft start as the indices showed signs of consolidation in early trade as investors and foreign funds were adopting a cautious approach amid mixed trade in Asian markets. Thereafter, the key indices remained in tight range near neutral line through the morning trades but saw a sudden spurt in buying in noon trades post the report that India Manufacturing Purchasing Managers' Index (PMI) climbed to a 22-month peak in October 2016. The key indices soon capitalized on the momentum and touched intraday highs in early afternoon session but the indices failed to hold onto the highs and slipped into the red again in afternoon trades. Finally, the NSE’s 50-share broadly followed index Nifty, ended flat with positive basis, while Bombay Stock Exchange’s Sensitive Index, Sensex slipped by over fifty points and closed below the psychological 27,900 mark. Moreover, the broader markets too failed to show any kind of fervor and settled with small cuts of around quarter percent.

The market breadth remained optimistic as there were 1470 shares on the gaining side against 1442 shares on the losing side, while 102 shares remained unchanged.

Finally, the BSE Sensex declined by 53.60 points or 0.19% to 27876.61, while the CNX Nifty up 0.55 points or 0.01% to 8,626.25. 

The BSE Sensex touched a high and a low of 28029.80 and 27845.63, respectively and there were 12 stocks on gainers side against 18 stocks on the losers side on the index. The broader indices made a negative closing; the BSE Mid cap index ended lower by 0.24%, while Small cap index was down by 0.19%.

The top gaining sectoral indices on the BSE were Metal up by 3.34%, Power up by 0.66%, PSU up by 0.47% and Auto up by 0.40%, while IT down by 1.19%, Consumer Durables down by 1.10%, TECK down by 1.06%, FMCG down by 0.76% and Capital Goods down by 0.64% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.23%, HDFC up by 2.59%, NTPC up by 2.45%, Coal India up by 1.18% and Power Grid up by 1.14%. On the flip side, Axis Bank down by 2.53%, TCS down by 1.96%, Sun Pharma down by 1.92%, Infosys down by 1.36% and Cipla down by 1.09% were the top losers.

Meanwhile, the government has marginally hiked import tariff value on gold and silver to $414 from $410 per 10 grams and $577 from $576 per kg respectively. In the global market, gold prices ruled steady on October 31, due to a strong US dollar. Spot gold was unchanged at $1,276.16 an ounce, while the US gold futures were little changed at $1,277.10. In the domestic market, gold prices drifted lower by Rs 110 to Rs 30,590 per 10 gram in the national capital, while silver prices were ruling steady at Rs 42,700 per kg.

The country's gold imports have declined by 10.3% to $1.80 billion in September 2016, from $2 billion in the year ago period due to sliding prices of the precious metal in both global and domestic markets.The import tariff value is the base price at which the customs duty is determined to prevent under-invoicing. It is normally revised on a fortnightly basis. The change in tariff value of these precious metals has been notified by the Central Board of Excise and Customs.

Gold is the second-largest import item for India after petroleum. Higher gold import bill adversely affects the country's current account deficit, which occurs when value of import of goods and services is more than exports.

The CNX Nifty traded in a range of 8,669.60 and 8,614.50. There were 27 stocks in green against 24 stocks in red on the index.

The top gainers on Nifty were Eicher Motors up by 5.16%, Hindalco up by 4.77%, Tata Steel up by 3.19%, NTPC up by 2.85% and HDFC up by 2.79%. On the flip side, Axis Bank down by 2.58%, Sun Pharma down by 1.88%, Kotak Mahindra Bank down by 1.86%, Cipla down by 1.43% and ZEEL down by 1.40% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 7.99 points or 0.11% to 6,962.21, Germany’s DAX increased 6.04 points or 0.06% to 10,671.05 and France’s CAC increased 0.04 points to 4,509.30.

Asian equity markets ended mostly in red on Tuesday, as a sell-off in oil futures, the uncertainty surrounding the US election and expectations of a December Fed rate hike offset fresh signs of strength in the world's second-largest economy. Chinese stocks ended higher after an official survey showed the country's manufacturing sector expanded at a faster pace than expected in October. The official Purchasing Managers' Index (PMI), a measure of manufacturing activity, stood at 51.2 in October, the fastest pace in over two years, compared with the previous month's 50.4 and above the 50-point mark that separates growth from contraction. Separately, the Caixin manufacturing PMI for China came in at 51.2 in October, up from 50.1 in September. Japanese shares edged higher in choppy trade after the Bank of Japan held policy steady, as expected, while disappointing earnings forecasts from some bellwether companies capped gains.