Indian benchmarks trade mixed in early deals on Tuesday

Indian equity benchmarks are exhibiting mixed trend in early deals on Tuesday. Investors across the globe remained on sidelines ahead of US jobs data that could shape expectations as to whether the Federal Reserve will start withdrawing stimulus this year. The US markets ended flat overnight shrugging off the report that existing home sales fell 1.9 percent to a seasonally adjusted annual rate of 5.29 million in September. Moreover, Asian markets were trading mostly in the red at this point of time with Shanghai Composite declining over half a percent, led by property developers, on concern that the government may introduce measures to contain housing prices after they climbed in all but one city the government tracks.

Back home, buying momentum continued in beaten-down midcap and smallcap stocks as investors looked for better bargains. Some support came in from Planning Commission deputy chief, Chairman of the Economic Advisory Council to Prime Minister C Rangarajan’s statement that Current Account Deficit (CAD) will go down well below $70 billion this fiscal. There is some good news for the manufacturing sector, as the Commerce and Industry Ministry is working on a proposal on giving interest subsidy to the sector and the Department of Industrial Policy and Promotion (DIPP) is considering an interest subvention of 3-4 percent, which could help in shoring up growth in the sector.

On the sectoral front, software witnessed the maximum gain in trade followed by technology and metal, while oil and gas, fast moving consumer goods and banking remained the few losers on the BSE sectoral space. The broader indices, however, outperforming benchmarks, while the market breadth on the BSE was positive; there were 824 shares on the gaining side against 402 shares on the losing side while 55 shares remain unchanged.

The BSE Sensex opened at 20863.15; about 30 points lower compared to its previous closing of 20893.89, and has touched a high and a low of 20948.91 and 20849.78 respectively. The index is currently trading at 20881.23, down by 12.66 points or 0.06%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a strong start with 64.32% stocks advancing against 31.38% declines. The broader indices were trading in green; the BSE Mid cap up by 0.59% and Small cap indices up by 0.72%. 

The top gaining sectoral indices on the BSE were, IT up by 0.84%, Teck up by 0.72%, Metal up by 0.47%, PSU up by 0.40% and Power up by 0.37%, while Oil & Gas down by 0.29%, FMCG down by 0.07% and Bankex down by 0.04% were the top losers on the sectoral index.

The top gainers on the Sensex were Wipro up by 1.66%, Coal India up by 1.63%, TCS up by 1.22%, Hindalco Industries up by 1.01% and Maruti Suzuki up by 0.95%. On the flip side, HDFC was down by 1.58%,  Hero MotoCorp was down by 0.98%, RIL was down by 0.90%, ITC was down by 0.54% and NTPC was down by 0.34% were the top losers on the Sensex.

Meanwhile, Government’s worries are likely to increase further with tax collection growing at a sluggish pace, it has been reported that the Indirect tax collections in the first half (April-September period) of this fiscal grew by mere 5.1 percent to around Rs 2,29 lakh crore, not even halfway mark of the budgeted Rs 5.65 lakh crore for the whole year. In September, total indirect tax collection stood at Rs 42,700 crore, up 13 percent from the same month last year. Government had increased its indirect tax collection target to Rs 5.65 lakh crore for 2013-14, up by 19 percent from Rs 4.73 lakh crore in the last fiscal.

The drop in collection was mainly due to the decline of Excise collection by 6 percent during the period to over Rs 89,000 crore, against the same period in the last fiscal year. However, Customs mop up was up 10 percent to Rs 80,550 crore during the period, while the Service tax collection grew by 16 percent to Rs 59,000 crore during the period.

Growth in industrial production has slowed and the drop in Excise collection reflects the slump in manufacturing activity, as slowing economic growth is likely to impact collection of indirect taxes and raise outgo on subsidies. The Finance Ministry, however, is expecting collections to pick up in the coming months led by a growth in industrial output in July and August and the pick up in industrial output is expected to reflect in taxes from October.

The CNX Nifty opened at 6,192.30; about 12 points lower as compared to its previous closing of 6,204.95, and has touched a high and a low of 6,220.10 and 6,187.90 respectively. The index is currently trading at 6,207.65, up by 2.70 points or 0.04%. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were IDFC up by 2.51%, Wipro up by 1.66%, Coal India up by 1.65%, BPCL up by 1.54% and Cairn up by 1.41%. On the flip side, HDFC down by 1.55%, NMDC down by 1.37%, ACC down by 1.15%, Hero MotoCorp down by 1.05% and DLF down by 0.96% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite declined 14.73 points or 0.66% to 2,214.51, Hang Seng decreased 115.83 points or 0.49% to 23,322.32, Jakarta Composite tumbled 52.11 points or 1.14% to 4,526.07, KLSE Composite slipped 0.64 points or 0.04% to 1,801.97, Seoul Composite dipped 0.25 points or 0.01% to 2,052.76 and Taiwan Weighted was down by 11.14 points or 0.13% to 8,408.18.

On the flip side, Nikkei 225 rose 35.27 points or 0.24% to 14,728.84 and Straits Times was up by 12.94 points or 0.40% to 3,208.70.