Benchmarks trim most of losses but remain in red terrain

Indian equity benchmarks trimmed most of their losses in late afternoon session to come off from day’s lows, taking support from higher opening in European markets. Traders took encouragement with World Bank President Jim Yong Kim’s statement that India has been growing pretty ‘robustly’ and predicted a strong global growth this year. Some support also came with Finance minister Arun Jaitley’s statement that the government would soon announce measures to revive economic growth that has decelerated to the slowest pace in three years. The markets were trying hard to recover from losses but US Federal Reserve’s hawkish tone by signaling another rate hike is likely this year, continued to weigh on the sentiments. Besides, the survey report stating that optimism level among India's chief financial officers during July-September touched a one and half year low amid concerns related to subdued demand and strain on corporate balance sheet, too kept the markets lackluster. 

On the global front, European markets were trading in green after the Federal Reserve announced a plan to begin unwinding its balance sheet and signaled one more interest rate hike for this year. However, Asian markets were trading in red. Back home, in scrip specific development, ITI has touched the roof after the company has been declared as L1 (lowest bidder) in ‘ASCON Phase IV Project’ by Ministry of Defence. The contract value of the project is around Rs 7000 crore. 

The BSE Sensex is currently trading at 32380.39, down by 20.12 points or 0.06% after trading in a range of 32164.42 and 32462.61. There were 11 stocks advancing against 19 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.23%, while Small cap index was down by 0.37%.

The only gaining sectoral indices on the BSE were Healthcare up by 2.77% and IT up by 0.14%, while Realty down by 1.83%, Consumer Durables down by 1.13%, PSU down by 0.75%, FMCG down by 0.73% and Bankex down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 7.08%, Cipla up by 3.83%, Lupin up by 3.27%, Sun Pharma up by 2.86% and TCS up by 1.39%. On the flip side, ICICI Bank down by 2.01%, Coal India down by 1.50%, Axis Bank down by 1.39%, ONGC down by 1.04% and Tata Motors - DVR down by 1.03% were the top losers.

Meanwhile, despite global lull in the automotive sector, the Indian car sales are likely to remain robust, global credit rating agency, Moody's Investors service in its latest report has said that the sales of Indian car industry will grow at 9 per cent in 2017 and 7 per cent next year, aided by Goods and Services tax (GST) regime coupled with new model launches.

The rating agency further said that the new tax regime had prompted a number of automakers to lower prices of their passenger vehicles, which had encouraged dealer to restocking and led to a subsequent boost in sales. Moody's is also expecting India’s auto sales to touch 3.6 million unit mark in 2017.

The report further noted that in key markets like China, Japan and India, the steady global GDP growth will drive a bigger demand for cars, while US car sales may weaken and may hamper growth of auto sector globally. Moody's further predicted that China’s auto sales will grow 3 per cent this year and 2 per cent in 2018, while Japanese car sales will grow by a robust 5.6 per cent this year and 2 per cent next year. It also said that automotive demand is poised to bounce back in Brazil, Argentina and Russia as their respective economies emerge from recession.

The CNX Nifty is currently trading at 10121.55, down by 19.60 points or 0.19% after trading in a range of 10058.60 and 10158.90. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 6.88%, Cipla up by 3.80%, Lupin up by 3.25%, Sun Pharma up by 3.17% and Tech Mahindra up by 1.73%. On the flip side, Zee Entertainment down by 2.72%, HCL Tech. down by 2.21%, GAIL India down by 2.11%, ICICI Bank down by 1.98% and ACC down by 1.73% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 17.47 points or 0.06% to 28,110.33, Shanghai Composite decreased 8.18 points or 0.24% to 3,357.81 and KOSPI Index decreased 5.7 points or 0.24% to 2,406.50. On the flip side, Nikkei 225 increased 37.02 points or 0.18% to 20,347.48 and Taiwan Weighted increased 59.27 points or 0.56% to 10,578.44.

All European markets were trading in green; UK’s FTSE 100 increased 10.4 points or 0.14% to 7,282.35, France’s CAC increased 30.21 points or 0.58% to 5,271.87 and Germany’s DAX increased 40.71 points or 0.32% to 12,609.88.