Benchmarks recuperate from intra-day’s low; FMCG counter outperforms

Showcasing some resilience, benchmark equity indices recuperating from intra-day’s low level have reclaimed some lost ground in light of pessimistic European counterparts. Bargain buying at lower level by market-men, keen enough to ride in the newly formed bulls market, has mainly took 30 share index, Sensex, above its psychological 18700 level and 50 share index, Nifty,  near of reclaiming the crucial 5700 crucial level. Similarly, broader indices too gaining some additional traction have widened gains of over 0.15%. Lending maximum spurt are stocks belonging from Fast Moving Consumer Goods, Health Care and Consumer Durable counters, however, stocks from  metal, Auto and Public Sectoral Undertaking, continuing to be on seller’s radar, are limiting the gains of bourses.

In sector specific action, Power stocks after trading jubilant since morning deals have surrendered to selling pressure, Power stocks put forth an electrifying show in early deals post government on Monday cleared Rs 1.90 lakh crore debt restructuring for power distribution companies, the second such move in less than a decade for entities that keep running up losses due to severe political interference even in regulatory agencies that fix tariffs. Meanwhile, Sugar stocks, viz, Bajaj Hindusthan , Balrampur Chini Mills  and Balrampur Chini Mills lost sweetness after Government deferred a decision on scrapping subsidy on levy sugar under the public distribution system (PDS) quota, as removing the subsidy would have meant a steep hike in the price of the commodity to Rs 23 per kg from Rs 13.50/kg. The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1275:1266, while 117 shares remained unchanged.

The BSE Sensex is currently trading at 18,705.42, up by 32.08 points or 0.17% after trading in a range of 18,790.01 and 18,636.16. There were 13 stocks advancing against 17 declines on the index.

The broader indices too gained traction, with both BSE Midcap and Small cap indices trading higher by 0.17% and 0.28% respectively.

On the BSE sectoral space, FMCG up by 1.15%, HC up by 0.86%, CD up by 0.62%, IT up by 0.48% and TECk up by 0.36% were the top gainers. While, Metal down by 1.00%, Auto down by 0.47%, PSU down by 0.31%, Oil & Gas down by 0.17%, and Bankex down by 0.12% were the top losers.

The top gainers on the Sensex were Cipla up by 2.30%, HDFC up by 1.34%, TCS up by 1.26%, HUL up by 1.20% and ITC up by 1.19%. On the other hand, Jindal Steel down by 2.71%, Tata Steel down by 1.93%, Sterlite Industries down by 1.49%, Maruti Suzuki down by 1.48% and Tata Motors down by 1.24% were the top losers on the Sensex.

Mean while, the steel imports surged by 40% to 3.354 Million Tonnes (MT) during April -August period of current fiscal due to increased demand from sectors including automobiles and consumer durables. Joint Plant Committee (JPC) of the Steel Ministry said “demand remains firm with sectors like consumer durables, machinery and equipment, electricity and motor vehicles. The present import growth may well be due to the combined demand momentum provided by these sectors”.

China is the largest exporter for steel with a share of 24% of the total imports at 0.809 MT followed by South Korea at 0.657 MT, Japan at 0.528 MT, Ukraine at 0.188 MT and Germany at 0.140 MT, respectively.

JPC added that policy provisions associated to concessional import duty to items from South Korea and Japan under Comprehensive Economic Partnership Agreement (CEPA) is also instrumental in a significant growth in imports from these nations, at present in decline mode with supply exceeding demand. Price concern is another key factor influencing trends in imports with the comparative strength in domestic prices in relation to import prices.

The S&P CNX Nifty is currently trading at 5669.95, up by 0.35 points or 0.01% after trading in a range of 5,702.70 and 5,652.75. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Cipla up by 2.35%, Ranbaxy up by 1.66%, Kotak Bank up by 1.64%, HCL Technologies up by 1.38% and ITC up by 1.35%. While, Cairn India down by 3.04%, Axis Bank down by 2.89%, Jindal Steel down by 2.69%, Tata Steel down by 2.26% and Sterlite Industries down by 1.93% were the major losers on the index.

The Asian markets were showing mixed trend, Shanghai Composite declined 0.25%, Hang Seng shed 0.04%, Kospi Composite lost 0.60% and Taiwan Weighted edged lower by 0.44%,

On the other hand, Jakarta Composite gained 0.24%, KLSE Composite added 0.21%, Nikkei 225 rose 0.25% and Straits Times advanced 0.26%. 

European markets got off to a poor start as investors reacted to news of sliding business confidence in eurozone economic engine Germany with UK’s FTSE 100 managing to gain by 0.03%, Germany’s DAX surrendering 0.23% and France’s CAC 40 declining 0.15%. German business confidence fell for the fifth month in a row in September to the lowest level since February 2010, data showed on Monday, suggesting that the eurozone debt crisis was increasingly hurting the German economy.