Bourses manage to keep their head above water in noon deals

Indian equity benchmarks managed to keep their head above water in early afternoon session, on the back of buying by funds and retail investors. Traders took some support with Union minister Ravi Shankar Prasad’s statement that the slowdown in the economic growth in Q1 of 2017-18 (April-June) is transitory and that will definitely pick-up pace in the next quarter as the macro fundamentals are strong. Besides, appreciation in Indian rupee coupled with buying appeared in Consumer Durables, FMCG, IT and TECK sector stocks, too supported the market. However, gains were limited as anxiety spread among the investors ahead of second-quarter earnings season that will begin this week. Traders also took note of Revenue Secretary Hasmukh Adhia’s statement that the government will clear pending GST refunds of exporters by November-end and over the next six months no tax will be levied on exports as the Council has decided to revert to the pre-GST era. In scrip specific development, Kalpataru Power Transmission was up by around a percent after securing new orders worth Rs 1,057 crore.

On the global front, Asian markets were trading mixed, as investors in Asia digested the release of China Caixin services PMI. The Caixin services purchasing managers’ index showed non-manufacturing activity in China expanded at its slowest levels in almost two years in September. The Caixin/Markit PMI stood at 50.6 last month, compared to the 52.7 figure seen in August.

The BSE Sensex is currently trading at 31835.98, up by 21.76 points or 0.07% after trading in a range of 31781.75 and 31935.63. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.17%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.33%, FMCG up by 0.41%, IT up by 0.40%, TECK up by 0.25% and Basic Materials up by 0.24%, while Power down by 0.89%, Utilities down by 0.85%, Oil & Gas down by 0.67%, PSU down by 0.62% and Realty down by 0.56% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 2.02%, Coal India up by 1.23%, Kotak Mahindra Bank up by 1.04%, Hindustan Unilever up by 0.92% and Tata Steel up by 0.66%. On the flip side, Power Grid down by 2.39%, Bharti Airtel down by 1.16%, ONGC down by 1.01%, Sun Pharma down by 0.85% and SBI down by 0.56% were the top losers.

Meanwhile, the Fitch group company, BMI Research in its latest report has said that the key policy rates may remain unchanged for rest of the fiscal year 2017-18, as the Reserve Bank of India (RBI) is likely to adopt a 'wait and see' approach due to rising inflation and downside pressure on the rupee. As per the report, retail Inflation, measured by consumer price inflation (CPI) is likely to head higher over the coming months, mainly due to rising food and housing prices.

The report has said that expectations of an economic recovery suggest that the RBI is likely to continue a ‘wait-and-see’ approach towards supporting growth, while rising inflation and a weakening rupee suggest that there is little room to loose monetary policy further. It also pointed out that the central bank is expected to keep interest rates on hold over the coming months in an effort to maintain the country's real yield advantage to prevent significant currency weakness due to capital outflows. It indicated that the rupee is currently hovering around Rs 65 level against the US dollar.

BMI Research has further stated that the government’s plans for fiscal spending to support economic growth along with farm loan waivers at the state level, which could top Rs 3.2 trillion, pose significant inflationary risks that are likely to prevent the central bank from adopting a looser monetary policy stance. Besides, the RBI left its benchmark repo rate steady at 6% in its latest monetary policy meeting.

The CNX Nifty is currently trading at 9982.85, up by 3.15 points or 0.03% after trading in a range of 9959.45 and 10015.75. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 2.26%, Coal India up by 1.19%, Bajaj Finance up by 0.92%, Hindustan Unilever up by 0.83% and Tech Mahindra up by 0.81%. On the flip side, Power Grid down by 2.30%, Aurobindo Pharma down by 2.01%, GAIL India down by 1.26%, HPCL down by 1.10% and BPCL down by 1.08% were the top losers.

The Asian markets were trading mixed; Jakarta Composite increased 16.1 points or 0.27% to 5,921.48 and Shanghai Composite increased 21.82 points or 0.65% to 3,370.77. On the flip side, Hang Seng decreased 150.74 points or 0.53% to 28,307.30 and FTSE Bursa Malaysia KLCI decreased 0.02 points to 1,763.98.