Benchmarks listlessly await Bernanke's decision

Benchmarks were witnessing a lackluster session in line with other Asian peers amid caution ahead the Reserve Bank of India's monetary policy later this week. Meanwhile, the Federal Reserve Open Market Commitee (FOMC) meet on September 17-18 will be key in terms of any tapering of $85 billion monthly bond purchases that led to significant inflows in the emerging markets especially India so far.

Sentiments got dampened as the rupee lost some strength against the dollar in today’s trade tracking the non-deliverable forwards (NDF) market. One month NDF was quoting at Rs 64.06.Besides that there is also dollar demand from importers, which is putting pressure on the rupee. The partially convertible rupee was trading at 63.49 per dollar against the yesterday’s close of 62.85 on the Interbank Foreign Exchange.

Global cues too remained mixed with the US markets ending mostly higher, extending their gains into new week, markets were rejoicing the news that former Treasury Secretary Larry Summers has withdrawn his name from consideration to replace Federal Reserve Chairman Ben Bernanke. However, most of the Asian equity benchmarks were trading in the red at this point of time as Federal Reserve begins a two-day policy meeting at which it will decide the pace of reduction of its US bond buying.  .

Back home, traders were buying, IT, Teck and Auto while selling were seen in Power, Capital Goods and Bankex on the BSE.

BSE Sensex and NSE Nifty were comfortably trading near their psychological 5800 and 19,700 levels respectively. The market breadth on BSE remains strongly in favour of losers with advances to declines in the ratio of 636:886. The BSE Sensex is currently trading at 19717.07, down by 25.40 points or 0.13% after trading in a range of 19779.26 and 19635.44. There were 12 stocks advancing against 18 declines on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.42% and Small cap index lost 0.31%.

The few gaining sectoral indices on the BSE were, IT up by 1.19%, Teck up by 1.07%, Auto up by 0.58% and Metal up by 0.14%, while Power down by 1.73%, Capital Goods down by 1.12%, Bankex down by 1.05% , Realty down by 0.80% and PSU down by 0.65% were the losers on the sectoral index.

The top gainers on the Sensex were Wipro up by 3.19%, Dr Reddys Lab up by 2.96%, Coal India up by 1.59%, Sesa Goa up by 1.58%, Bharti Airtel up by 1.58%. On the flip side, Sun Pharma was down by 2.49%, NTPC was down by 2.27%, Tata Steel was down by 2.00%, Hero MotoCorp was down by 1.68% and BHEL was down by 1.62%, were the top losers on the Sensex.

Meanwhile, India's engineering exports, after declining for four months in a row, turned positive in August on the back of reviving demand in the traditional market Europe and emerging ones like Latin America and Africa. However, engineering’s exports registered a marginal growth of 2.18 per cent to $4.68 billion in the reported month on YoY basis. On cumulative basis, during April to August period, engineering exports declined by 4.2 percent to $22.72 billion over the same period of last fiscal.

Engineering goods exports which include exports of goods, transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners, constitute around one-fourth of the country's total merchandise shipments. The US and Europe together account for around 60 per cent of the country’s total engineering exports.

At present, the Engineering Export Promotion Council (EEPC) is concerned over the declining engineering exports as the domestic engineering sector suffers from severe technological obsolescence and lack of economies of scale. However, the council has sought setting up of a Technology Upgradation Fund Scheme (TUFS) to the tune of Rs 3,500 crore in order to boost the sector exports. Further, the government, in the annual foreign trade policy, had also announced a slew of measures including sops for Special Economic Zones (SEZs) and extension of the popular the Export Promotion Capital Goods (EPCG) scheme to all sectors to boost shipments.       

The CNX Nifty is currently trading at 5,823.35 down by 17.20 points or 0.29% after trading in a range of 5,846.40 and 5,804.90. There were 20 stocks advancing against 30 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 4.43%, %, Dr. Reddy's Laboratories up by 2.88%,HCL Tech up by 2.57, Grasim up by 1.92% and Sesa Goa up by 1.72%. On the flip side, Bank of Baroda down by 3.80%, Axis Bank down by 3.59%, IndusInd Bank down by 3.25%, Sun Pharmaceuticals down by 2.92% and NTPC down by 2.48% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 19.98 points or 0.90% to 2,211.42, Hang Seng dipped 79.49 points or 0.34% to 23,172.92, Jakarta Composite dropped 27.39 points or 0.61% to 4,494.85, Nikkei 225 slipped 46.23 points or 0.32% to 14,358.44, Seoul Composite shed 12.38 points or 0.61% to 2,000.99 and Taiwan Weighted was down by 25.89 points or 0.31% to 8,229.45.

On the flip side, KLSE Composite rose 0.46 points or 0.03% to 1,771.26 and Straits Times was up by 6.09 points or 0.19% to 3,185.57.