Markets trade flat with positive bias; Nifty hovering around 8,650 level

In the extremely range-bound session of trade, Indian benchmarks altering between positive and negative territory, are now trading flat with bit of positive bias as investors and foreign funds were adopting a cautious approach, amid mixed trade in Asian markets. Sentiments remained upbeat after the 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. Adding optimism among investors Core sector output rising to three months high by 5 per cent in September, compared to growth of 2.4 per cent 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 that the Indian economy is well-prepared, even if not completely immune, for any external risk in case the US Federal Reserve normalises rates in December.

On the global front, Asian markets were trading mixed on Tuesday after the release of encouraging purchasing managers index data from China and as the Bank of Japan and Australia’s central bank largely held firm on their policies. 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, stocks from Metal, PSU and Oil & Gas counters were supporting the markets’ uptrend, while those from Consumer Durables, IT and Realty counters were adding to the underlying cautious undertone. In scrip specific development, Eicher Motors edged higher after the company registered 33% growth in motorcycle sales (Royal Enfield) to 59,127 units in October 2016 compared to 44,522 units in the same month last year. Further, Vedanta has surged after the company reported 17.14% rise in its consolidated net profit at Rs 1252.13 crore for the quarter ended September 30, 2016 as compared to Rs 1068.95 crore for the same quarter in the previous year.

The market breadth remained optimistic as there were 1363 shares on the gaining side against 1170 shares on the losing side, while 109 shares remained unchanged.

The BSE Sensex is currently trading at 27943.69, up by 13.48 points or 0.05% 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 in green; the BSE Mid cap index was up by 0.20%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Metal up by 2.43%, PSU up by 0.27%, Oil & Gas up by 0.26%, Auto up by 0.22% and Power up by 0.19%, while Consumer Durables down by 0.92%, IT down by 0.67%, Realty down by 0.62%, TECK down by 0.54% and FMCG down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.43%, GAIL India up by 1.09%, Mahindra & Mahindra up by 0.95%, Tata Steel up by 0.90% and Power Grid Corpn. up by 0.89%. On the flip side, Axis Bank down by 1.52%, Tata Motors down by 1.06%, Infosys down by 0.91%, ONGC down by 0.78% and TCS down by 0.71% were the top losers.

Meanwhile, in order to facilitate greater foreign direct investment (FDI) in the country, the government is considering further easing FDI norms in several sectors, including retail trading, with an eye on more inflows. The commerce and industry ministry is already on the job in this direction and they said that there are certain sticking points in single brand retail trading that need to be reviewed.

In retail trading sector, some clauses in the Legal Metrology (Packaged Commodities) Rules, 2011, are hampering overseas investments in the segment. Earlier, it lifted certain restrictions in over a dozen sectors which include civil aviation, food processing, defense and pharmaceuticals. The government may also consider easing certain FDI rules in the information and broadcasting sector, among others.

Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek has stated that the government is trying to address specific policy issues in various sectors. They are also trying to address specific policy issues in various sectors and they have identified a number of them that remain despite liberalization in FDI (policy). He said that there could be issues in various sectors. In 2015-16, FDI grew by 29 per cent to $40 billion.

The CNX Nifty is currently trading at 8641.35, up by 15.65 points or 0.18% after trading in a range of 8614.50 and 8653.40. There were 28 stocks advancing against 22 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Hindalco up by 5.11%, Eicher Motors up by 3.26%, HDFC up by 2.60%, BHEL up by 2.16% and Bharti Infratel up by 2.14%. On the flip side, Tech Mahindra down by 2.10%, Axis Bank down by 1.58%, Tata Power down by 1.47%, Tata Motors down by 1.00% and Kotak Mahindra Bank down by 0.93% were the top losers.

Asian markets were trading mixed; Jakarta Composite gained 0.09%, Shanghai Composite increased 0.43% and Hang Seng was up by 1.12%. On the flip side, Nikkei 225 declined 0.03%, Taiwan Weighted decreased 0.19%, KOSPI Index slipped 0.13% and FTSE Bursa Malaysia KLCI was down by 0.01%.