Markets trade flat with positive bias

Indian equity markets made recovery and were trading flat with positive bias in late afternoon session. Traders took some support after a research report from the State Bank of India's Economic Research Department has said that there are merit and rationale for the Reserve Bank of India (RBI) to reduce the key benchmark lending rate by 25 basis points in the forthcoming monetary policy, as retail inflation is expected to remain benign even in the next financial year. However, ongoing concerns surrounding cost hike in H-1B visas by US has weighed on investors’ sentiments.  

On the global front, Asian equity markets were trading mixed as escalating tensions in Middle East weighed on trading sentiments. European equity markets were trading higher after a measure of Eurozone business activity hit a 16-month high in September.

The BSE Sensex is currently trading at 82207.80, up by 47.83 points or 0.06% after trading in a range of 81776.53 and 82370.38. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.17%, while Small cap index was down by 0.22%.

The top gaining sectoral indices on the BSE were Metal up by 1.16%, Auto up by 0.81%, Bankex up by 0.72%, Telecom up by 0.57% and PSU up by 0.54%, while FMCG down by 1.13%, Realty down by 0.81%, Consumer Durables down by 0.54%, Capital Goods down by 0.38% and Power down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.11%, Maruti Suzuki up by 1.85%, Axis Bank up by 1.78%, Bajaj Finance up by 1.69% and Mahindra & Mahindra up by 1.32%. On the flip side, Trent down by 2.18%, Ultratech Cement down by 1.85%, Hindustan Unilever down by 1.84%, Tech Mahindra down by 1.56% and Asian Paints down by 1.11% were the top losers.

Meanwhile, India’s flash Purchasing Managers’ Index (PMI) data showed the combined performance of India's manufacturing and service sectors strengthened during September, although the majority of the HSBC Flash PMI indices retreated from August's recent highs to signal a modest slowdown. A softer expansion in new business intakes accompanied slower increases in private sector output and employment, with international sales also rising at a weaker pace. The HSBC Flash India Composite Output Index - a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors - fell to 61.9 in September from a final reading of 63.2 in August, but still indicated a sharp rate of expansion. Prices trends were more benign as cooler input cost inflation allowed for selling charges to be lifted to a lesser degree. Nevertheless, business confidence strengthened at the end of the second fiscal quarter.

The data noted that the HSBC Flash India Manufacturing PMI - a weighted average of the New Orders, Output, Employment, Suppliers’ Delivery Times and Stocks of Purchases indices - slipped to 58.5 in September, from a final reading of 59.3 in August. The improvement in operating conditions signalled by the PMI was nevertheless robust by historical standards, with the respective index well above both the neutral mark of 50.0 and its long-run average of 54.2. September data showed another substantial increase in new business placed with Indian private sector companies. The pace of expansion was sharp and well above trend but receded from August. Several companies suggested that demand conditions remained favourable, but others indicated that competitive pressures restricted order intakes at their units. 

It further stated that although private sector workforces continued to increase at the end of the second fiscal quarter, the rate of expansion receded from August and was moderate overall. Slower rates of increase were noted across both the manufacturing and service sectors. In fact, the proportion of companies indicating job creation in the aforementioned segments stood at around 3% and 5% respectively. The vast majority of survey participants reported having sufficient labour for current requirements. Cost pressures remained more pronounced in India's service economy. That said, a slowdown here contrasted with a pick-up in the manufacturing industry. In addition to greater wage bills, panellists reported higher cotton, electronic component, oil, steel, vegetable and wood prices. Nevertheless, across the private sector as a whole, overall expenses saw a less pronounced increase in September.

The CNX Nifty is currently trading at 25206.95, up by 4.60 points or 0.02% after trading in a range of 25084.65 and 25261.90. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.93%, JSW Steel up by 2.15%, Adani Enterprises up by 2.11%, Axis Bank up by 2.03% and SBI up by 1.98%. On the flip side, Trent down by 2.05%, SBI Life Insurance Company down by 1.93%, Hindustan Unilever down by 1.88%, Ultratech Cement down by 1.85% and Tech Mahindra down by 1.66% were the top losers.

Asian equity markets were trading mixed; Straits Times rose 9.62 points or 0.22% to 4,306.99, Taiwan Weighted added 366.77 points or 1.4% to 26,247.37, Jakarta Composite gained 60.22 points or 0.74% to 8,100.26 and KOSPI increased 17.54 points or 0.5% to 3,486.19, while Hang Seng declined 142.14 points or 0.54% to 26,202.00 and Shanghai Composite weakened 34.27 points or 0.9% to 3,794.31.

European equity markets were trading higher; UK’s FTSE 100 increased 35.42 points or 0.38% to 9,262.10, France’s CAC rose 69.49 points or 0.89% to 7,899.60 and Germany’s DAX gained 183.55 points or 0.78% to 23,710.60.