Sensex, Nifty continue choppy trade in late noon deals

The local benchmarks continued their choppy trade in late noon session, on the back of mixed global cues. Sensex and Nifty were holding slight gains, while the broader indices were outperforming with BSE Small cap gained more than a percent. Sentiments were continued taking support from the Commerce & Industry Minister Suresh Prabhu’s statement that the government is working on a strategy to boost share of services in total exports from the country. Some comfort also came with Finance Minister Arun Jaitley’s statement that the Centre is in favour of bringing petroleum products under the goods and services tax (GST) regime, but is waiting for a consensus to emerge among states. However, traders remained cautions with Federation of Indian Chambers of Commerce and Industry’s (FICCI’s) latest quarterly survey indicating that manufacturing sector outlook is slightly less optimistic in third quarter of the current fiscal year (Q3), pointing to factors like rupee appreciation, subdued demands along with issues related to GST regime.

On the global front, European markets were trading mostly in red, as initial optimism sparked by progress on the US tax reform front dissipated and market sentiment waned. Asian markets were also trading in red. Back home, in scrip specific development, Cholamandalam Investment and Finance Company was trading higher after the company received an approval for setting up of a Housing Finance Company (HFC) as a subsidiary.

The BSE Sensex is currently trading at 33865.29, up by 28.55 points or 0.08% after trading in a range of 33767.72 and 33956.31. There were 15 stocks advancing against 15 stocks declining on the index, while 1 index remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index was up by 1.01%.

The top gaining sectoral indices on the BSE were Realty up by 3.45%, Industrials up by 0.90%, Capital Goods up by 0.85%, Metal up by 0.80% and Basic Materials up by 0.76%, while Bankex down by 0.14%, Energy down by 0.09% and PSU down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.39%, Hero MotoCorp up by 1.97%, ONGC up by 1.84%, Larsen & Toubro up by 1.45% and Tata Motors up by 1.29%. On the flip side, Dr. Reddy’s Lab down by 1.65%, Tata Steel down by 1.06%, Bajaj Auto down by 0.72%, HDFC down by 0.69% and Bharti Airtel down by 0.68% were the top losers.

Meanwhile, pointing to factors like rupee appreciation, subdued demands along with issues related to Goods and Services Tax (GST) regime, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest quarterly survey has said that manufacturing sector outlook is slightly less optimistic in third quarter of the current fiscal year (Q3).

It reported that overall the capacity utilization in manufacturing remains low. The average capacity utilization for the manufacturing sector is about 75% for Q-2 2017-18 as reported in the survey which is similar to that of Q-1 2017-18. While, inventory situation hasn't changed much, with  90% of the participants in Q-2 (July- September 2017-18) as compared to 92% in previous two quarters maintaining either more or same average levels of inventory.

As per the survey, percentage of respondents expecting higher production has fallen to 47% in Q3 from 50% in Q-2, while respondents expecting lower production come down to 15% in Q3 from 18% as reported in the previous quarter. Besides, the report also said that demand will remain subdued as percentage of respondents expecting higher order books also came down to 42% in Q3 as against 47% in Q2.

The survey which assessed the expectations of manufacturers of twelve major sectors, also found that appreciation of rupee to keep exports outlook less optimistic in Q3, while the most of the companies may also hire less workforce in next three months. However, FICCI Survey expects higher growth for Auto, Capital Goods, Metal and Metal Products in third quarter, while lower growth for Cement and Ceramics, Food Products, Leather & Footwear and Textiles & Technical Textiles sector.

The CNX Nifty is currently trading at 10471.00, up by 7.80 points or 0.07% after trading in a range of 10440.75 and 10494.45. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.98%, Hindalco up by 1.95%, ONGC up by 1.89%, Lupin up by 1.41% and Wipro up by 1.28%. On the flip side, Eicher Motors down by 1.84%, Dr. Reddy’s Lab down by 1.52%, HPCL down by 1.34%, Ambuja Cement down by 1.07% and Tata Steel down by 0.96% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite decreased 66.3 points or 1.08% to 6,101.36, Hang Seng decreased 19.57 points or 0.07% to 29,234.09, Shanghai Composite decreased 8.93 points or 0.27% to 3,287.61 and KOSPI Index decreased 6.16 points or 0.25% to 2,472.37. On the flip side, FTSE Bursa Malaysia KLCI increased 10.5 points or 0.6% to 1,747.45, Nikkei 225 increased 23.72 points or 0.1% to 22,891.72 and Taiwan Weighted increased 37.18 points or 0.36% to 10,504.52.

European markets were trading mostly in red; France’s CAC decreased 5.8 points or 0.11% to 5,377.11 and UK’s FTSE 100 decreased 4.65 points or 0.06% to 7,539.44. On the flip side, Germany’s DAX increased 31.62 points or 0.24% to 13,247.41.