Benchmarks remain positive bias in late morning trade

Benchmarks were moving in the mild with a positive bias in late morning  trade  as investors chose to remain on sidelines ahead of the Reserve Bank of India's policy meet on Tuesday and US Federal policy meet ending Wednesday.  The Fed's policy-setting arm meets on Oct 29-30 and is expected to hold off any move to scale down its $85 billion monthly bond-buying programme. Sentiments got some support from report that foreign institutional investors (FIIs) bought shares worth a net Rs 626.99 crore on October 25, 2013. However, gains on the up-side remained capped after report showed that Foreign Direct Investment (FDI) into India declined to 8-month low of $1.4 billion in August, down 38 percent year-on-year. The market is likely to remain choppy in the week ahead as  investor  mull rolling over positions in November series from the near month October series in the futures & options segment.

On the global front, most of the Asian markets were trading in fine fettle at this point of time after weaker than forecasted U.S. consumer confidence raised hopes that the Federal Reserve will maintain stimulus. Meanwhile, Japanese markets remained the top gainers amongst other regional peers, garnering over one and a half percent gain on weaker yen. Back home, traders were buying, Capital Goods, Consumer Durables and Oil & Gas while selling were seen in FMCG, Health Care and Teck on the BSE. The market breadth on BSE remains positive with advances to declines in the ratio of 967:702. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,600 and 6,150 levels respectively. 

The BSE Sensex is currently trading at 20683.52, up by 44.88 points or 0.22% after trading in a range of 20771.36 and 20689.08. There were 16 stocks advancing against 14 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.24% and Small cap index gained 0.35%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.82%, Consumer Durables up by 1.59%, Oil & Gas up by 1.16%, Auto up by 0.70% and Bankex up by 0.63% while FMCG down by 1.63%, Healthcare down by 0.62%, Teck down by 0.34% and IT down by 0.27% were the top losers on the sectoral index.

The top gainers on the Sensex were L&T up by 2.66%, RIL up by 1.74%, Hindustan Unilever up by 1.65%, Tata Motors up by 1.05% and ICICI Bank up by 1.05%. On the flip side, ITC was down by 2.94%, Sun Pharma was down by 1.27%, SSLT was down by 0.84%, Coal India was down by 0.48% and Infosys was down by 0.21% were the top losers on the Sensex.

Meanwhile, a recent study by the apex industry body, the Associated Chambers of Commerce and Industry of India (ASSOCHAM), has revealed that massive jobs were lost as a result of 30% shut-down of textile units during 2010-11. The study titled ‘State-wise assessment of textile sector & recommendations’ by Assocham, underscored that of the total 17,987 textile factories across India, while about 12,688 (70.54%) factories were operational, about 5,300 (29.46%) were non-operational as of 2010-11. Notably, Tamil Nadu alone accounted for 54% of the total non-operational textile factories. The five states, namely Tamil Nadu, Gujarat, Punjab, Maharashtra and Uttar Pradesh (UP) together accounted for about 88% of the non-operating textile factories

Further, the study said that employment lost due to the rise in number of non-operational facilities rose from over 6% to around 42% during the time.  According to the chamber, while the number of textile factories grew at a compounded annual growth rate (CAGR) at 5% between FY01 and FY11, the non-operational factories grew at a staggering 23% with operational factories growing by a paltry 2%.

City-wise, Gujarat registered maximum growth of about 39% CAGR in non-operational textile units, from over 290 factories to over 2,800 factories during 2000-01 and 2010-11, followed by Punjab (35%), Haryana (32%), Himachal Pradesh (26%) and Tamil Nadu (25%). Low productivity, lack of advanced manufacturing technologies, lack of foreign investments, supply chain bottlenecks, lack of economies of scale, labour related challenges, issues arising due to a fragmented industry and weak brand positioning were the key reasons for non-operation of textile units.

The CNX Nifty is currently trading at 6,155.15 up by 10.25 points or 0.17% after trading in a range of 6,168.75 and 6,145.50. There were 29 stocks advancing against 21 declines on the index.

The top gainers of the Nifty were L&T up by 2.63%, Axis Bank up by 1.91%, Reliance up by 1.66%, Hindustan Unilever up by 1.57%, and Kotak Bank up by 1.43%. On the flip side, ITC down by 3.00%, HCL Tech down by 1.51%, SUN Pharma down by 1.45%, Lupin down by 1.35% and JP Associate down by 1.31% were the major losers on the index.

Most of the Asian equity indices were trading in green; Hang Seng rose 108.77 points or 0.48% to 22,807.11, Jakarta Composite strengthened 9.74 points or 0.21% to 4,590.58, KLSE Composite increased 1.04 points or 0.06% to 1,818.61, Nikkei 225 surged 250.68 points or 1.78% to 14,338.87, Straits Times gained 6.80 points or 0.21% to 3,212.04, Seoul Composite added 7.28 points or 0.36% to 2,041.67 and Taiwan Weighted was up by 59.70 points or 0.72% to 8,406.32.

On the flip side, Shanghai Composite was down by 4.66 points or 0.22% to 2,128.29.