Benchmarks gyrate around neutral line in morning session

Indian equity benchmarks traded on lackluster note gyrating around neutral line in morning session in absence of buying triggers. The sentiments were cautious after North Korea’s deputy UN ambassador warned that the situation on the Korean peninsula has reached the touch-and-go point and a nuclear war may break out any moment. The rupee opened down against dollar on account of buying of American currency by banks and importers. Foreign Portfolio Investors stood net sellers in domestic equity markets on Monday and sold shares worth Rs 1,555 crore with gross purchases and gross sales of Rs 5,505 crore and Rs 7,060 crore, respectively.

The downside was capped with statement of NITI Aayog Vice-Chairman Rajiv Kumar, who has pitched for fiscal stimulus to boost growth with a rider that additional expenditure should be used only for increasing productivity and capital expenditure. He said that faced with slowing economic growth, the industry has been clamouring for a stimulus package from the government. Investors took note that to strengthen the fiscal responsibility frameworks, the International Monetary Fund (IMF) has suggested India to consider setting up an independent fiscal council, as introduction of this institution contributed to better outcomes in the countries where it has been introduced.

Traders were seen piling up position in Telecom, Oil & Gas and Realty stock, while selling was witnessed in IT, Auto and Metal sector stocks. In scrip specific development, Voltas was trading in green after the company on Monday announced the succession plan with chief operating officer and air-conditioner business head Pradeep Bakshi elevated as the managing director and chief executive officer of the company when current MD Sanjay Johri superannuates next February. Snowman Logistics was trading firm after bagging an exclusive deal from IKEA, the global home furnishing retail major, to manage backend operations of its in-store restaurants business in India.

On the global front, Asian markets were trading mostly in green. Confidence among Japanese manufacturers rebounded in October to match a peak last seen in mid-2007, a poll found, further evidence that the economic recovery is gathering momentum helped by a weak yen and strong overseas demand. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,600 and 10,200 levels respectively. The market breadth on BSE was positive in the ratio of 1244:897, while 88 scrips remained unchanged.

The BSE Sensex is currently trading at 32606.24, down by 27.40 points or 0.08% after trading in a range of 32556.74 and 32659.32. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.44%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Telecom up by 1.23%, Oil & Gas up by 0.93%, Realty up by 0.80%, PSU up by 0.68% and Utilities up by 0.54%, while IT down by 0.13%, Auto down by 0.06% and Metal down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.21%, Asian Paints up by 1.09%, Sun Pharma up by 0.78%, Axis Bank up by 0.63% and Bajaj Auto up by 0.56%.

On the flip side, Tata Motors down by 0.87%, Infosys down by 0.78%, Mahindra & Mahindra down by 0.75%, Tata Motors - DVR down by 0.73% and Hindustan Unilever down by 0.64% were the top losers.

Meanwhile, seeking quick remedies to address exporters’ concerns, Commerce Minister Suresh Prabhu has written to Finance Minister Arun Jaitley. Prabhu stressed on improving usability of the scrips earned under the MEIS - the most popular incentive scheme for exporters covering more than 7,000 items - as post-GST the scrips can be used for payment of only customs duties. This has reduced the premium on the scrips (valued at 2-5 per cent of export amount) as earlier it could be used for payment of all input taxes such as central excise duty and service tax.

The Commerce Minister proposed that the MEIS scrips should be allowed to be used for payment of GST and also proposed that the rate of MEIS be increased from 5 per cent to 7 per cent for labour-intensive sectors such as leather, footwear, handloom, handicraft, Ayush, marine products, electronic components and the MSME sector, which suffer the most during a downturn.

The other proposals of the Commerce Ministry includes, an enhanced rate from 3 per cent to 10 per cent in the Services Export from India Scheme (SEIS) for hotels and restaurants, reducing GST rate on sale of MEIS/SEIS scrips to zero per cent, increasing the rate of interest subvention from 3 per cent to 5 per cent for labour intensive sectors, have capital infusion of Rs 2,000 crore in ECGC scheme, address working capital blockage due to pay first and then refund principle of GST, exempting merchant exporters from payment of GST and enhancing support for the trade-related Infrastructure for Export Scheme and Enhanced Support For Market Access Initiative schemes.

The CNX Nifty is currently trading at 10234.15, up by 3.30 points or 0.03% after trading in a range of 10212.60 and 10239.25. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.50%, HPCL up by 1.99%, Indian Oil Corporation up by 1.66%, Indiabulls Housing up by 1.46% and Bharti Infratel up by 1.29%.

On the flip side, Tata Motors down by 1.09%, Eicher Motors down by 1.07%, Bosch down by 0.97%, Zee Entertainment down by 0.92% and Dr. Reddy’s Lab down by 0.89% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 2.26 points or 0.07% to 3,380.73, KOSPI Index increased 4.61 points or 0.19% to 2,484.66, Hang Seng increased 45.82 points or 0.16% to 28,738.62 and Nikkei 225 increased 47.44 points or 0.22% to 21,303.00.

On the other hands, Taiwan Weighted decreased 29.15 points or 0.27% to 10,745.06, Jakarta Composite decreased 17.63 points or 0.3% to 5,932.07 and FTSE Bursa Malaysia KLCI decreased 1.05 points or 0.06% to 1,753.32.