Benchmarks keep head above water in early deals

Indian equity benchmarks have made a cautious start but managed to keep their head above water in early deals on Thursday as traders took some encouragement with a survey of Federation of Indian Chambers of Commerce and Industry (FICCI), which has said that India Inc believes the economy is faring better and is optimistic about demand rising. However, gains remained capped with global rating agency Standard & Poor's retaining India's rating at BBB- and ruling out any upgrade in India's sovereign rating through 2017 despite policy stability and reforms. S&P maintained the lowest investment grade rating of 'BBB-' with a 'stable' outlook saying it wants to see more efforts to lower government debt to below 60 percent of GDP and that it did not expect revenues to rise enough to meaningfully lower the deficit over the medium term.

Weak global cues too dampened sentiments with most of the Asian counters trading in red on concern of rate hike in US. The US markets once again ended lower in last session with some polls confirming tightened presidential race days ahead of the election and Federal Reserve’s signal that an interest rate hike is imminent. Back home, traders remained concerned with GST Council meet starting today as both the Centre and states seeming to harden their positions with respect to the issues they disagree on.  There is a raging debate on the Centre’s proposal for having multiple rates for GST.

The BSE Sensex is currently trading at 27554.37, up by 27.15 points or 0.10% after trading in a range of 27446.31 and 27574.04. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.42%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Metal up by 1.49%, Basic Materials up by 0.91%, Consumer Durables up by 0.80%, Capital Goods up by 0.55% and Realty was up by 0.50%, while Oil & Gas down by 0.55%, IT down by 0.25%, PSU down by 0.15%, TECK down by 0.15% and Energy was down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.23%, GAIL India up by 1.03%, Tata Steel up by 0.98%, Hero MotoCorp up by 0.74% and Reliance Industries up by 0.52%. On the flip side, ONGC down by 2.00%, Tata Motors down by 0.72%, Bharti Airtel down by 0.71%, NTPC down by 0.70% and Asian Paints down by 0.69% were the top losers.

Meanwhile, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest report stated that the Overall Business Confidence Index (OBCI) rose to a six quarter high and the index stood at 67.3 in the current survey as against 62.8 in the last round. In the October business confidence survey, which is based on enterprises' assessment of production and current position and expectations of industry analysts received optimistic views.

The report said that the proportion of respondents citing a ‘moderately to substantially better’ performance in the current conditions vis-a-vis last six months noted an increase at all the three levels - economy, industry and firm level. As per the survey, about 63% of the respondents reported current economic conditions as ‘moderately to substantially better’ compared to last six months. Likewise, the corresponding number at the industry and firm level was 63% and 60% respectively. About 75% of the participants foresee a better performance at the economy level in near term. Further, 63% of the respondents at the industry level and 70% of the respondents at the firm level were hopeful of a better performance going ahead.

The report also showed that the demand pulse is gradually gaining strength. Good monsoons and award of the seventh pay commission will give a further trigger to demand. In the current round, 46% of the participants reported weak demand to be an impediment to their business performance. Further, a higher proportion of respondents expected an improvement in the order book position over next two quarters. With respect to credit, an increase was noted in the proportion of respondents citing availability and cost of credit to be constraining factors. High interest cost has been one of the major areas of worry for the industry. It remains critical that the cost of capital is made competitive to propel investments. With regard to sales prospects, a majority of the respondents anticipated an improvement in performance over the next two quarters. On the investment front, a marginal increase was noted in the proportion of respondents expecting an uptick in investments.

The CNX Nifty is currently trading at 8522.20, up by 8.20 points or 0.10% after trading in a range of 8489.60 and 8531.80. There were 32 stocks advancing against 18 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Hindalco up by 3.99%, Bharti Infratel up by 1.77%, Tata Power up by 1.69%, ACC up by 1.29% and ICICI Bank up by 1.20%. On the flip side, ONGC down by 2.00%, BPCL down by 1.09%, Tata Motors - DVR down by 1.06%, Tech Mahindra down by 1.00% and NTPC down by 0.96% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 49.77 points or 0.54% to 9,089.27, Hang Seng slipped 28.29 points or 0.12% to 22,782.21, Jakarta Composite shed 26.32 points or 0.49% to 5,379.13 and FTSE Bursa Malaysia KLCI was down by 4.83 points or 0.29% to 1,654.77.

On the flip side, KOSPI Index increased 3.79 points or 0.19% to 1,982.73 and Shanghai Composite increased 17.79 points or 0.57% to 3,120.52.