Firm trade prevails in morning session; Sensex holds 33,500 mark

Indian equity benchmarks continued their firm trade in morning session on account of buying in frontline counters. The rupee opened higher against the dollar on account of sustained selling of American currency by exporters. Sentiments remained up-beat on World Bank report that India has jumped 30 spots to number 100 in the latest Ease of Doing Business report for 2018. The report highlighted that India stands out this year as one of the 10 economies that improved the most in the areas measured by Doing Business. The report, which ranks New Zealand, Singapore and Denmark as the easiest countries in the world to do business in, ranked China at 78, which is 22 spots above India. The report also recognized India as one of the top 10 improvers in this year’s assessment, having implemented reforms in eight out of 10 Doing Business indicators. Describing as significant the huge improvement in India’s position in the World Bank’s ease of doing business ranking, a top US-India business advocacy group said this would help the country attract more FDI. Additionally, core sector growth hit a six-month high in September. The index of eight core industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity - was up 5.2% in September, compared with 4.4% in August and 5.3% in September last year.

Separately, India’s fiscal deficit at the end of the first half of the current fiscal touched 91.3% of the budget estimate, mainly due to rise in expenditure. In absolute terms, the fiscal deficit was Rs 4.99 lakh crore during the April-September period of 2017-18.During the same period of last financial year, 2016-17, the deficit was at 83.9% of the target. Economic Affairs Secretary Subhash Chandra Garg said that the government is hopeful of sticking to the 3.2 per cent fiscal deficit target for the current fiscal, although a final view would be taken in December. Investors took note that India could review the application of the highest 28% slab under the Goods and services Tax (GST) and consider imposing a lower rate on items of frequent use. Items in the 28% slab include washing machines, refrigerators, electrical fittings, cement, ceiling fans, watches, automobiles, tobacco products, nutritional drinks, auto parts, plastic furniture and plywood. Some of the goods placed in that bracket are manufactured by MSMEs and they are feeling some pressure.

Traders were seen piling up position in Telecom, Realty and Bankex stocks, while selling was witnessed in IT sector stocks. In scrip specific development, Dabur India was trading in green after the company reported a net profit of Rs 362.7 crore on Tuesday against expectation of Rs 369 crore. At an operating level, the earnings before interest, taxes, depreciation and amortization (EBITDA) was reported at Rs 420 crore, while the operating margin came in at 21.4 percent. The company’s domestic volume growth beat expectations at 7.2 percent. IIFL Holdings was trading in green on reporting a 25 percent rise in consolidated net profit at 229.1 crore for quarter-ended September 30, this fiscal. The company’s net profit stood at Rs 183.1 crore, during July-September quarter of 2016-17.

On the global front, Asian markets were trading mostly in green. Soaring memory chip sales helped South Korea exports record 12 consecutive months of growth in October, evidence Asia’s fourth largest economy is stepping up a gear. While shipments growth moderated from September, October outpaced September in terms of average exports per working day, highlighting brisk business activity. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,500 and 10,400 levels respectively. The market breadth on BSE was positive in the ratio of 1615:733, while 101 scrips remained unchanged.

The BSE Sensex is currently trading at 33560.39, up by 347.26 points or 1.05% after trading in a range of 33340.62 and 33595.74. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.79%, while Small cap index was up by 0.81%.

The top gaining sectoral indices on the BSE were Telecom up by 3.61%, Realty up by 3.19%, Bankex up by 1.92%, Metal up by 1.55% and FMCG up by 1.00%, while IT down by 0.10% was the sole losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 6.70%, ICICI Bank up by 4.63%, SBI up by 3.17%, Axis Bank up by 2.50% and HDFC up by 1.75%.

On the flip side, Dr. Reddy’s Lab down by 2.38%, TCS down by 1.01%, Power Grid down by 0.87%, Maruti Suzuki down by 0.40% and Sun Pharma down by 0.31% were the top losers.

Meanwhile, growth in eight core sectors - coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity, which comprise nearly 40% of the weight of items included in the Index of Industrial Production (IIP), expanded at a faster pace to a six-month high of 5.2% in September 2017, from 4.9% in August. This was highest growth rate since April and the growth was due to robust performance of coal, petroleum refinery and natural gas segments. All the other sectors recorded positive growth, barring Fertilizer sector. According to that data released by the ministry of Commerce and Industry showed the combined Index of eight core industries stood at 122.5 in September, 2017, which was 5.2% higher as compared to the index of September, 2016 and its cumulative growth during April-September, 2017-18 was 3.3%.

Among eight core sectors, Coal production having 10.33% weight surged 10.6% in September, 2017 over September, 2016 and its cumulative index increased by 1.5% during April to September, 2017-18 over corresponding period of the previous year. Petroleum Refinery production having 28.04% weight jumped 8.1% in September, 2017 over September, 2016 and its cumulative index increased by 2.1% during April to September, 2017-18 over the corresponding period of previous year. Electricity generation having 19.85% weight spurted 5.2% in September, 2017 over September, 2016 and its cumulative index increased by 6.0% during April to September, 2017-18 over the corresponding period of previous year.

The Natural Gas production having 6.88% weight advanced 6.3% in September, 2017 over September, 2016 and its cumulative index increased by 5.0% during April to September, 2017-18 over the corresponding period of previous year. Steel production having 17.92% weight rose 3.7% in September, 2017 over September, 2016 and its cumulative index increased by 5.5% during April to September, 2017-18 over the corresponding period of previous year.

Crude Oil production having 8.98% weight inched up by 0.1% in September, 2017 over September, 2016, while its cumulative index declined by 0.2% during April to September, 2017-18 over the corresponding period of previous year. Cement production having 5.37% weight was up by 0.1% in September, 2017 over September, 2016, while its cumulative index was down by 1.9% during April to September, 2017-18 over the corresponding period of previous year. On the other hand, Fertilizer production having 2.63% weight dropped 7.7% in September, 2017 over September, 2016 and its cumulative index slipped 2.1% during April to September, 2017-18 over the corresponding period of previous year.

The CNX Nifty is currently trading at 10426.05, up by 90.75 points or 0.88% after trading in a range of 10383.05 and 10437.55. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 7.20%, ICICI Bank up by 4.50%, SBI up by 2.96%, Axis Bank up by 2.62% and Ambuja Cement up by 1.95%.

On the flip side, Dr. Reddy’s Lab down by 1.90%, UPL down by 1.41%, Bharti Infratel down by 1.39%, TCS down by 1.31% and BPCL down by 1.10% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 3.06 points or 0.09% to 3,396.41, Taiwan Weighted increased 6.97 points or 0.06% to 10,800.77, Jakarta Composite increased 9.43 points or 0.16% to 6,015.21, KOSPI Index increased 27.11 points or 1.07% to 2,550.54, Hang Seng increased 172.3 points or 0.61% to 28,417.84 and Nikkei 225 increased 368.02 points or 1.67% to 22,379.63.

On the other hand, FTSE Bursa Malaysia KLCI decreased 3.88 points or 0.22% to 1,744.04.