Benchmarks make cautious start; RIL drops after Q2 results

Indian benchmark indices were trading with a marginal gain after a cautious start as investors remained on the sideline ahead of TCS and HDFC second quarter result while, profit booking in Reliance Industries too dampened the sentiments. Though, the US markets surged on Friday making their best weekly close in more than two years while, all the Asian peers were trading in the positive terrain at this point of time, indicating strong investors sentiments. Back home, on the sectoral front realty witnessed the maximum gain in trade followed by banking and auto while, oil and gas, technology and software remained the only losers on the BSE sectoral space. However, PSU oil marketing companies like BPCL, HPCL and IOC all edged lower in the trade as the international crude prices surged on sign of demand improvement. The broader indices were outperforming benchmarks. Moreover, Onelife Capital Advisors (OCAL), the new listing got good response friom the traders and was trading with the gain of 30 percent. The market breadth on the BSE was positive; there were 1,259 shares on the gaining side against 581 shares on the losing side while 61 shares remained unchanged.

The BSE Sensex opened at 17,076.05; about 6 points lower compared to its previous closing of 17,082.69, and has touched a high and a low of 17,188.55 and 17,073.06 respectively.

The index is currently trading at 17,093.81, up by 11.12 points or 0.07%. There were 21 stocks advancing against 9 declines on the index.

The overall market breadth has made a positive start with 66.23% stocks advancing against 30.56% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices rose 0.63% and 0.78% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.09%, Bankex up by 0.96%, Auto up by 0.84%, CD up by 0.80% and Metal was up by 0.38%. While, Oil and Gas down by 0.89%, IT down by 0.50% and TECk down by 0.48% were the only losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.03%, Sterlite Industries up by 2.56%, SBI up by 2.09%, Hindalco up by 1.59% and DLF was up by 0.99%.

On the flip side, RIL was down by 1.91%, NTPC was down by 0.72%, Maruti Suzuki was down by 0.71%, Bharti Airtel was down by 0.65% and Sun Pharma was down by 0.60% were the top losers on the Sensex.

Meanwhile, the group of ministers (GoM) headed by the Union Agriculture Minister Sharad Pawar, after resolving all inter-ministerial differences at a meeting held on October 14, will be submitting  the final draft of National Manufacturing Policy which seeks to create 100 million jobs in the next ten years. Pawar said, 'in today's meeting we discussed in depth and found solutions for all the issues raised by environment, labour and MSME and I will be able to submit a final policy draft by this week. After that cabinet will take a final view.'

Earlier, the union cabinet had failed to clear the manufacturing policy in its meeting, after opposition from Environment and Labour Ministries. After which the draft policy was referred to the group of ministers to resolve the differences on the policy which had got in-principle approval from Prime Minister on June, 2011.

The Ministry of Labor had raised its concern over the recommend services entity to take care of labour related issues such as provident fund management of Small and Medium Enterprises (SME). The ministry is of the view that such functions cannot be outsourced. On the other hand, the Ministry of Environment has opposed the inclusion of state pollution board officials in the Special Purpose Vehicles (SPV) to be created to carry out environment impact assessments arguing that it would lead to conflicts between state and central governments. The GoM has now appeased both the ministries.

Sharad Pawar said, 'the head of SPV in a particular zone will be a government official and will be appointed after consultations with both Labour and Environment ministries'. By adding further he said '...and we have accepted that state pollution board representative will be there as well.'

The new manufacturing policy targets to increase the share of the manufacturing sector in India’s Gross Domestic Product (GDP) to more than 25% by 2022. Currently, the manufacturing sector accounts for 16% of country’s GDP. The GoM is of the view that the manufacturing sector is important for the continued growth of Indian economy, especially from employment point of view. The Indian economy is dominated by the service sector which account for more than 50% of the GDP growth.

The commerce ministry is also expected to meet the West Bengal’s new Chief Minister Mamta Banerjee and brief her about the policy. Earlier, the matter was also discussed with all state industry ministers.

The S&P CNX Nifty opened at 5,156.20; about 22 points lower compared to its previous closing of 5,132.30, and has touched a high and a low of 5,160.20 and 5,130.05 respectively.

The index is currently trading at 5,139.40, higher by 7.10 points or 0.14%. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were Tata Motors up by 2.83%, Sterlite Industries up by 2.23%, Axis Bank up by 1.80%, SBI up by 1.79% and Cairn up by 1.48%.

On the flip side, Reliance Industries down by 2.09%, Ranbaxy down by 1.00%, RCom down by 0.96%, HCL Tech down by 092% and Coal India down by 0.85%, were the major losers on the index.

All the Asian equity indices were trading in the green; Shanghai Composite was up 4.28 points or 0.18% to 2,435.66, Hang Seng was up 284.58 points or 1.54% to 18,786.37, Jakarta Composite was up 49.98 points or 1.36% to 3,714.66, KLSE Composite was up 14.40 points or 1.00% to 1,456.83, Nikkei 225 was up 122.25 points or 1.40% to 8,870.21, Straits Times was up 24.20 points or 0.88% to 2,768.37, Seoul Composite was up 20.89 points or 1.14% to 1,856.29 and Taiwan Weighted was up by 93.49 points or 1.27% to 7,451.57.