Benchmarks witness consolidation on Tuesday

Indian equity benchmarks witnessed consolidation with frontline gauges ending almost unchanged on Tuesday, as traders opted to book some of their profit after three days of continuous rally. Markets traded choppy through the session with frontline gauges swinging between green and red for most part of the day, as sentiments remained downbeat on geopolitical tension after North Korea’s deputy U.N. ambassador warned a nuclear war may break out any moment. Traders also remained on sidelines ahead of second quarter results from Wipro and Axis Bank, slated to be released later in the day.  However, traders took some solace 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.

Some comfort also came with the International Monetary Fund suggesting India to consider setting up an independent fiscal council, saying this institution has contributed to better outcomes in the countries where it has been introduced. Some support also came with Economic Affairs Secretary Subhash Chandra Garg’s statement that getting investment in the infrastructure sector and bankruptcy reforms are the two issues which are on the top of the government's agenda. Besides, the private report stating that India’s foreign reserves, which touched a record $ 402.5 billion in September, are high enough to cushion the country against the external vulnerabilities, also helped the indices to trade in green territory.

On the global front, European markets made cautious start with UK’s FTSE trading flat before inflation data and a testimony by Bank of England Governor Mark Carney later in the day. Asian markets exhibited mixed on Tuesday. Japanese shares extended gains for an 11th straight day as the dollar held gains against the yen and euro and investors remained hopeful that Prime Minister Shinzo Abe will win Sunday’s Lower House election.

Back home, depreciation in Indian Rupee against the US currency dampened sentiments, following continued bouts of dollar demand from banks and importers amid higher dollar overseas. However, private report that WPI inflation is expected to moderate further in the coming months, and is likely to average 2.8% in 2018, lent some support to Indian equity markets. On the sectoral front, mixed reaction was witnessed in pharma stocks on report that the proposed amendment to Drug Price Control Order (DPCO) will put prices of non-scheduled drugs under check, kill competition, and prove negative for industry growth. National Pharmaceutical Pricing Authority (NPPA) and the Department of Pharmaceuticals (DoP) had put forward a proposal that suggests scrapping the current system of fixing the ceiling price of drugs on the National List of Essential Medicines (NLEM) by accepting simple average price of brands having a market share of over 1%.

Finally, the BSE Sensex lost 24.48 points or 0.08% to 32,609.16, while the CNX Nifty was up by 3.60 points or 0.04% to 10,234.45.

The BSE Sensex touched a high and a low of 32,699.86 and 32,556.74, respectively and there were 13 stocks on gaining side as against 18 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.40%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were Telecom up by 2.77%, Realty up by 0.79%, Oil & Gas up by 0.74%, Capital Goods up by 0.43% and PSU was up by 0.41%, while IT down by 0.24%, Bankex down by 0.24% and Consumer Durables was down by 0.20% were the few losing indices on BSE.

The top gainers on the Sensex were Cipla up by 4.09%, Bharti Airtel up by 2.86%, Asian Paints up by 2.06%, Bajaj Auto up by 1.09% and Hero MotoCorp up by 0.85%. On the flip side, Axis Bank down by 1.44%, Tata Motors down by 1.04%, Infosys down by 0.84%, Dr. Reddy’s Lab down by 0.62% and Kotak Mahindra Bank down by 0.44% were the top losers.

Meanwhile, Minister of State for Commerce and Industry C R Chaudhary has said that leather exports and production in India are likely to surge 10 percent by the year 2019. He also noted that presently, the country’s leather exports stood at $5.66 billion.

Chaudhary pointed out that the government is taking several steps to improve business environment for the sector as part of the exercise to push growth and added that the exports of leather goods is linked to demand in developed regions like Europe. He further said that all Footwear Design and Development Institutes (FDDIs) will become institutes of national importance from October 23 with the implementation of the FDDI Act, which was approved by Parliament.

The minister also expressed hopes that FDDIs will be able to give degrees, diplomas and certificates and they would also formulate their course and curriculum.  The approval of the FDDI Act by Parliament in July had ended the uncertainty among the students who were not sure whether they would get degree from the institute.

The CNX Nifty traded in a range of 10,251.85 and 10,212.60. There were 24 stocks in green as against 25 stocks in red, while one stock remained unchanged on the index.

The top gainers on Nifty were Cipla up by 4.14%, BPCL up by 3.13%, Bharti Airtel up by 2.58%, Hindalco up by 2.32% and Indiabulls Housing Finance up by 2.28%. On the flip side, Zee Entertainment down by 3.63%, Axis Bank down by 1.70%, Dr. Reddy’s Lab down by 0.97%, Infosys down by 0.88% and UPL down by 0.78% were the top losers.

European markets were trading flat; UK’s FTSE 100 rose 0.71 points or 0.01% to 7,527.68 and Germany’s DAX was up by 3.29 points or 0.03% to 13,006.99, while France’s CAC was down by 3.09 points or 0.06% to 5,359.79.

Asian equity markets made a mixed closing on Tuesday after major US indexes hit fresh record highs overnight, buoyed by rising oil prices and optimism about the economic outlook and the possibility of major tax reform. The dollar edged up after Fed Chair Janet Yellen reiterated that additional gradual interest rate hikes are likely to be appropriate over the next few years. Oil prices remained elevated due to supply worries after Iraqi forces seized the oil-rich city of Kirkuk from Kurdish fighters. Japanese shares extended gains for an 11th straight day as the dollar held gains against the yen and euro and investors remained hopeful that Prime Minister Shinzo Abe will win Sunday's Lower House election. Meanwhile, Chinese stocks ended on a flat note, heading into the National Congress of the Communist Party kicking off on Wednesday.