Lackluster trade continues on Dalal street

Indian equity benchmarks continued their lackluster trade in early afternoon deals, due to selling in Auto, IT and TECK stocks. Traders remained cautious with SBI’s Research report that economy has been on a downslide since September 2016 and the slowdown is real and not technical, calling for more public spending to arrest the slide.  Besides, a mixed lead from global markets and a lack of fresh triggers from the domestic front also kept the investors nervous. However, broader indices managing to hold their heads above water and were trading with gains in the range of 0.07%-0.26%. On the sectoral front, telecom stocks such as Idea Cellular and Reliance Communications dropped after telecom regulator TRAI slashed mobile call connection charge to 6 paise per minute from 14 paise currently, effective October 1.

On the global front, Asian markets were trading mixed, as investors awaited monetary policy news coming at the conclusion of the US Federal Reserve's two-day meeting. Back home, the BSE Sensex is currently trading at 32404.71, up by 2.34 points or 0.01% after trading in a range of 32399.84 and 32499.88. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.07%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.92%, Energy up by 0.40%, Industrials up by 0.39%, Healthcare up by 0.35% and Realty up by 0.21%, while Auto down by 0.42%, IT down by 0.37%, TECK down by 0.36%, Consumer Durables down by 0.24% and Bankex down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 2.78%, ONGC up by 1.84%, Reliance Industries up by 1.28%, Larsen & Toubro up by 1.26% and SBI up by 1.25%. On the flip side, Hero MotoCorp down by 1.79%, Tata Motors down by 1.69%, Sun Pharma down by 1.34%, NTPC down by 1.15% and Coal India down by 1.12% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has stated that Indian steel mills are likely to enjoy better profitability in the near term with firm prices of metal and substantial export growth. It also said that buoyant international steel prices have benefited Indian mills to increasingly tap overseas markets, as reflected in a 57 percent Y-o-Y growth in exports during Apr-Aug 2017, helping the domestic steel industry operate at a capacity utilisation of above 80 percent in the financial year 2017-18.

As per the report, steel prices have reported a healthy growth of 14 percent since June 2017, on the back of a sharp recovery in international steel prices and improvement in local demand growth to 4.4 percent in April-August 2017, from 2.6 percent in FY17. It also noted that the Chinese hot rolled coil (HRC) export prices increased by about 40 percent since mid-May 2017, reaching $588 per metric tonne (MT) in the third week of September 2017, supported by China's resilient domestic demand and its supply-side reforms to check the domestic steel overcapacity.

The rating agency further said that operating margins of the steel industry contracted to 12.5 percent in Q1FY2018 from 15.7 percent in Q4FY2017 due to lower steel prices and increased raw material costs, especially for coking coal in Q1 FY2018. It also stated that while the prices of coking coal and iron ore have also increased recently, the extent of increase in domestic steel prices in Q2FY2018 remains higher than that in raw material costs, which points to a sequential expansion in gross contribution levels of steel players.

The CNX Nifty is currently trading at 10144.95, down by 2.60 points or 0.03% after trading in a range of 10137.70 and 10171.05. There were 19 stocks advancing against 31 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Dr. Reddy’s Lab up by 2.74%, ONGC up by 1.75%, Reliance Industries up by 1.44%, Larsen & Toubro up by 1.39% and SBI up by 1.21%. On the flip side, BPCL down by 2.51%, Hero MotoCorp down by 1.75%, Tata Motors down by 1.68%, Ambuja Cement down by 1.63% and Sun Pharma down by 1.27% were the top losers.

Asian markets were trading mixed; Shanghai Composite increased 6.36 points or 0.19% to 3,363.20, Nikkei 225 rose 11.08 points or 0.05% to 20,310.46 and Hang Seng added 67.73 points or 0.24% to 28,119.14. On the flip side, Taiwan Weighted decreased 56.97 points or 0.54% to 10,519.17, FTSE Bursa Malaysia KLCI was down by 4.33 points or 0.24% to 1,772.33, KOSPI Index dipped 3.85 points or 0.16% to 2,412.20 and Jakarta Composite shed 3.73 points or 0.06% to 5,897.60.