Weak trade persists on D- Street; Metal stocks lose shine

Key Indian benchmarks continued their weak trade in late morning session, on the back of continuous selling in Telecom, PSU and Metal stocks amid mixed Asian cues. Investors remained concerned with Credit rating agency Care Ratings’ latest report stating that employment generation in the country has failed to keep pace with the gross domestic product (GDP) expansion in recent years. Traders were awaiting more corporate earnings and outcome of FOMC's two-day policy meeting that will begin tonight. Furthermore, market participants shrugged off SBI Research’s report which accessed that Indian economy is likely to improve to 6 percent in the second quarter of the current fiscal year 2017-18, as against 5.7 percent growth in the first quarter of FY18. Meanwhile, the index of mineral production of mining and quarrying sector for August increased by 9.4 per cent, while the total value of the mineral output was estimated at Rs 18,015 crore.

On the global front, Asian markets were trading mixed, following the negative lead overnight from Wall Street and as investors digested data that showed China's official manufacturing PMI for October missed economists' expectations. Investors are also cautious ahead of the Bank of Japan's monetary policy decision due later today. Back home, in scrip specific development, Subros gained after the company bagged further order from Indian Railways for around Rs 10 crore. This order will be executed within the current financial year.

The BSE Sensex is currently trading at 33219.63, down by 46.53 points or 0.14% after trading in a range of 33174.99 and 33294.30. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.01%, while Small cap index was up by 0.23%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.85%, Realty up by 0.74%, Bankex up by 0.25%, Power up by 0.18% and Healthcare up by 0.06%, while Metal down by 1.55%, Telecom down by 0.51%, TECK down by 0.51%, PSU down by 0.45% and Energy down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.91%, ONGC up by 1.04%, HDFC up by 0.97%, Hero MotoCorp up by 0.66% and TCS up by 0.44%. On the flip side, Tata Steel down by 1.92%, Infosys down by 1.81%, SBI down by 1.52%, Coal India down by 1.42% and Mahindra & Mahindra down by 1.33% were the top losers.

Meanwhile, moving ahead with reforms to revive the public sector banks (PSBs), the government has constituted a ministerial panel headed by Finance Minister Arun Jaitley that will oversee merger proposals of the country’s 21 state-owned banks. The other members of the panel include Railway and Coal Minister Piyush Goyal and Defence Minister Nirmala Sitharaman.

The decision comes less than a week after the government announced a Rs 2.11 trillion bank recapitalisation plan for public sector banks weighed down by bad loans, seeking to stimulate the flow of credit to spur private investment. Jaitley had said that capital infusion roadmap for PSBs will be accompanied by a series of banking reforms over next few months. The constitution of an Alternative Mechanism is a move in that direction. The cabinet had decided to set up an Alternative Mechanism to fast-track PSBs consolidation.

Besides, the consolidation of struggling state-run banks, which have a market share of about 70% and account for over 80% of bad loans in the Indian banking system, is aimed at building scale and bolstering their risk-taking ability.

The CNX Nifty is currently trading at 10340.40, down by 23.25 points or 0.22% after trading in a range of 10323.95 and 10367.70. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.93%, HCL Tech up by 1.66%, Ambuja Cement up by 1.32%, HDFC up by 0.94% and Indusind Bank up by 0.88%. On the flip side, Hindalco down by 2.42%, HPCL down by 1.91%, Bharti Infratel down by 1.89%, Tata Steel down by 1.73% and Infosys down by 1.66% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 1.55 points or 0.09% to 1,749.90, KOSPI Index increased 24.69 points or 0.99% to 2,526.62, Jakarta Composite increased 34.07 points or 0.57% to 6,008.15 and Taiwan Weighted increased 36.93 points or 0.34% to 10,793.80.

On the flip side, Hang Seng decreased 52.7 points or 0.19% to 28,283.49, Nikkei 225 decreased 22.98 points or 0.1% to 21,988.69 and Shanghai Composite decreased 4.69 points or 0.14% to 3,385.64.