Benchmarks turn green in noon deals

Trimming all their initial losses, Indian equity benchmarks entered into positive terrain as investors opted to go for beaten down but fundamentally strong stocks. Some support also came in on the back of slight recovery in rupee against dollar. The rupee was trading at Rs 63.19 compared with previous close of Rs 62.85 per dollar. Buying in Auto space too provided some strength to the bourses. Most two-wheeler stocks rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. However, gains remained capped as traders remained cautious ahead of the Reserve Bank of India’s (RBI) monetary policy review and outcome of US Federal Reserve meeting.

Sluggish opening in European counterparts too dampening the sentiments with CAC, DAX and FTSE all were trading in the red in early deals. Moreover, all 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, some support came in from buying in software and technology counters supported by depreciation in Indian rupee, while power, consumer durables and banking counters were reeling under pressure. Moreover, broader markets too were struggling to get some traction. The overall market breadth on BSE is in the favour of decliners which have thumped advances in the ratio of 1119:872; while 115 shares remained unchanged.

The BSE Sensex is currently trading at 19784.46 up by 41.99 points or 0.21% after trading in a range of 19809.28 and 19635.44. There were only 14 stocks advancing against 16 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.34%, while Small cap index down by 0.23%.

The top gaining sectoral indices on the BSE were, IT up by 1.61%, Teck up by 1.36%, Metal up by 0.77%, Auto up by 0.63% and FMCG up by 0.39%. While, Power down by 1.16%, Consumer Durable down by 0.90%, PSU down by 0.76%, Bankex down by 0.70% and Capital Goods down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were, Wipro up by 4.34%, Dr Reddys Lab up by 3.91%, Sesa Goa up by 3.13%, Maruti Suzuki up by 1.81% and Mahindra & Mahindra up by 1.26%. On the flip side, Sun Pharma down by 2.60%, NTPC down by 2.34%, ONGC down by 1.74%, Tata Power down by 1.31% and Hero Moto Corp down by 1.30% were the top losers on the Sensex.

Meanwhile, in a move to boost the country’s gems and jewellery exports, the finance ministry hiked the duty drawback rate on gems and jewellery by nearly 31 percent to Rs 227.20 per gram of net gold content, against Rs 173.20 in June. The incentive scheme now stands over 100 per cent higher than Rs 100.70 in 2012-13.

Duty drawback is the reimbursement of excise and customs duty and service tax on the imported inputs used in the manufacture of exported goods and the recent step will also provide relief to the jewellers by neutralizing the effect of increase in import duty on gold and silver. In order to contain rising gold imports, the government has recently raised import duty on gold to 10 per cent from 8 per cent set earlier. Further, import duty on silver was also raised to 10 percent from 6 per cent.

Indian total exports grew by nearly 13 per cent in August, but gems and jewellery exports still reflect negative numbers for the current fiscal. Meanwhile, the Federation of Indian Exporters (FIEO) expects that with the revision in drawback rates, annual exports of this sector will also register a positive growth in coming future. 

The CNX Nifty is currently trading at 5,847.20 up by 6.65 points or 0.11% after trading in a range of 5,853.95 and 5,804.90. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 4.03%, DR. Reddys Lab up by 3.98%, HCL Tech up by 3.67%, Sesa Goa up by 3.48% and UltraTech Cement up by 2.74%. On the flip side, Indusind Bank down by 3.14%, Bank of Baroda down by 3.04%, Axis Bank down by 2.91%, Sun Pharmaceuticals down by 2.76% and NTPC down by 2.48% were the major losers on the index.

All the Asian equity indices were trading in red; Seoul Composite down by 0.39%, Taiwan Weighted down by 0.07%, Shanghai Composite down by 2.02%, Hang Seng down by 0.33%, Nikkei 225 was down by 0.65%, Jakarta Composite down by 0.65%, KLSE Composite down by 0.02% and Straits Times down by 0.01%. 

All the European markets were trading in red; France’s CAC 40 was down by 0.26%, UK’s FTSE 100 down by 0.20% and Germany’s DAX down by 0.19%.