Sensex, Nifty continue to trade in red terrain

Adding some losses, Indian bourses continued to trade in red terrain in afternoon deals, on account of selling in frontline blue chip counters. The sentiments remained sluggish after the commerce and industry ministry’s data showed that growth of eight infrastructure sectors slowed down to 4.3% in September, the lowest in the last four months, as production of crude oil and natural gas declined. Some concern also came with a private report stating that India, which is the second-most populated nation in the world and on the verge of becoming the youngest country, will start ageing in next 15 years. This 15-year window is the best time to create job opportunities and capitalize on country’s rich demographic dividend. However, losses were limited as some optimism remained among the traders with survey report that the Indian manufacturing sector strengthened further in the month of October, on account of stronger order inflows and job creation. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - improved to 53.1 in October from 52.2 in September.

On the global front, Asian markets are trading mostly in green, benefited from another strong performance on Wall Street. Back home, the BSE Sensex is currently trading at 34353.56, down by 88.49 points or 0.26% after trading in a range of 34303.38 and 34679.93. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.82%, while Small cap index up by 1.14%.

The top gaining sectoral indices on the BSE were Capital Goods up by 3.56%, Industrials up by 2.25%, Realty up by 1.84%, Basic Materials up by 0.99% and Metal up by 0.65%, while IT down by 1.96%, TECK down by 1.77%, FMCG down by 1.04%, Healthcare down by 0.54% and Utilities down by 0.26% were the losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 7.02%, Indusind Bank up by 4.05%, Larsen & Toubro up by 3.98%, Axis Bank up by 2.42% and Tata Motors up by 2.04%. On the flip side, Infosys down by 2.66%, Hindustan Unilever down by 1.72%, Wipro down by 1.72%, ITC down by 1.70% and NTPC down by 1.38% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that pharmaceutical industry in India is likely to register higher margins in Q2 (July- September) of 2018-19 on a year-on-year basis, on the back of rupee’s depreciation against the US dollar. It also said that about 9 percent year-on-year depreciation in the rupee in Q2FY19 will help pharmaceutical companies in passing on input cost hikes and manage the pricing pressure.

According to the report, although the pricing pressure in regulated markets, input cost inflation and increased competition continue are the key concerns for the remaining FY19, the rupee will continue to weaken against the dollar, and thus support topline growth of pharmaceutical companies and safeguard them from the margin pressure. It expects that the positive currency impact to continue and the rupee to average Rs 69.79 per US dollar in FY19, a fall of 8.3 percent. Besides, it said that the domestic market offers a relatively high scope to large-sized players to pass on increased input costs than a highly competitive regulated market such as the US.

For most large-sized players, Ind-Ra has stated that the benefits of a weak rupee and reduced remediation costs, along with traditional cost cutting measures, are likely to help in compensating margin contraction to a large extent in FY19. It pointed out that the domestic pharmaceutical market has so far briskly grown in FY19. However, it said that the majority of pharmaceutical companies focused on the domestic market will register muted growth in Q2FY19 on a year-on-year basis.

The CNX Nifty is currently trading at 10362.05, down by 24.55 points or 0.24% after trading in a range of 10341.90 and 10441.90. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 7.15%, Indusind Bank up by 4.34%, Larsen & Toubro up by 4.29%, Indiabulls Housing Finance up by 3.26% and HPCL up by 2.65%. On the flip side, HCL Tech. down by 3.58%, Tech Mahindra down by 3.45%, Infosys down by 2.72%, Dr. Reddys Lab down by 2.52% and Bharti Infratel down by 2.51% were the top losers.

Asian markets are trading mostly in green; Shanghai Composite was up by 3.50 points or 0.13% to 2,606.28, Jakarta Composite added 7.62 points or 0.13% to 5,839.27, Taiwan Weighted rose 42.61 points or 0.43% to 9,844.74, Hang Seng surged 388.23 points or 1.53% to 25,367.92 and Straits Times increased 36.20 points or 1.18% to 3,055.00.

On the flip side, KOSPI decreased 5.23 points or 0.26% to 2,024.46 and Nikkei 225 was down by 232.81 points or 1.07% to 21,687.65.