Benchmarks pare early gains in late morning

Benchmarks pared most of their early gains but were still trading with positive bias in late morning trade ahead of September IIP data which will be out post market hours later today. Sentiments got some support from the good export data announced yesterday, exports rose by 13.47 percent to $ 27.27 billion in October. Meanwhile, cheering the rise in exports, India Inc has said that the turnaround was on account of rebound in US and European economies and urged the Government to restore duty drawback rates to bring down the trade deficit. Sectorally rate sensitive realty has taken the lead, rejoicing the Maharashtra state government’s clearing all hurdles before the Navi Mumbai International Airport project.

On the global front, Asian markets were showing a mixed trade in late morning, while some of the indices are trading marginally in red some others have surged considerably in morning trade. The Chinese market has extended their gains, while the Korean shares rallied from a two-month low after the baht extended declines versus the dollar. Back home, traders were buying, Realty, FMCG and Capital Goods while selling were seen in Metal, Auto and Power on the BSE.

The market breadth on BSE remains positive with advances to declines in the ratio of 1033: 691. BSE Sensex and NSE Nifty were comfortably trading near their psychological 20,500 and 6,050 levels respectively.

The BSE Sensex is currently trading at 20504.56, up by 13.60 points or 0.07% after trading in a range of 20584.22 and 20485.74. There were 14 stocks advancing against 16 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.61% and Small cap index gained 0.45%

The top gaining sectoral indices on the BSE were, Realty up by 2.05%, FMCG up by 0.62%, Capital Goods up by 0.69%, IT up by 0.54% and Teck up by 0.53%, while Metal down by 1.00%, Auto down by 0.44%, Power down by 0.27% and PSU down by 0.17%, were the top losers on the sectoral index.  

The top gainers on the Sensex were Hindalco Industries up by 1.88%, Maruti Suzuki up by 1.66%, Wipro up by 1.25%, Sun Pharma up by 0.85%, and ITC up by 0.68%, On the flip side, SSLT was down by 2.49%, Tata Motors was down by 2.05%, Coal India was down by 1.26%, Jindal Steel was down by 1.08%, and Tata Steel was down by 0.93% were the top losers on the Sensex.

Meanwhile, as per the industry body Ficci survey, Indian manufacturing sector is likely to witness subdued growth in the October-December quarter of current fiscal particularly due to the concerns over high interest rates. The Ficci’s report, based on the survey of thirteen manufacturing industries,   has found that prevailing high cost of credit is impacting the margins of the manufacturing industries and the sector like automotive, capital goods and electronics are expected to witness sluggish growth in Q3 FY14. Presently, interest rate paid by the manufacturers ranges from 8 to 16 percent with average interest rate at around 12 percent per annum.

Meanwhile, the survey revealed that five out of thirteen sectors are likely to witness low growth (less than 5 percent). Two sectors such as leather and paper, are expected to have a strong growth of over 10 percent in Q3 2013-14 while remaining sectors are likely to witness moderate growth. Further, the investment into manufacturing sector is also likely to remain subdued in reported quarter as 72 percent respondents not having any plans for capacity additions for the next six months as compared to 74 percent respondents in the previous survey. Further, outlook on hiring people also looks miserable in manufacturing sector with over 75 percent of the respondents unlikely to hire additional workforce in next three months.

Meanwhile, the survey noted that demand conditions appear to be slightly better in Q3 2013-14 as 44 percent respondents reporting higher order books for the quarter under review as compared to 32 percent respondents in the previous quarter.

The CNX Nifty is currently trading at 6,088.90 up by 10.10 points or 0.17% after trading in a range of 6,108.70 and 6,078.40. There were 26 stocks advancing against 22 declines while 2 stock remains unchanged on the index.

The top gainers of the Nifty were DLF up by 2.43%, Hindalco up by 1.93%, Maruti up by 1.67%, Cairn up by 1.51%, and Kotak Bank up by 1.45%. On the flip side, SSLT down by 2.54% Tata Motors down by 2.03%, Coal India down by 1.23%, Tata Steel down by 1.16%, and Bharti Airtel down by 1.13% were the top losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite was up by 17.31 points or 0.82% to 2,126.79, Nikkei 225 surged by 295.63 points or 2.07% to 14,565.47, Seoul Composite was up by 18.97 points or 0.96% to 1,996.12 and Taiwan Weighted gained 15.28 points or 0.19% to 8,196.39.

On the other hand, Hang Seng lost 102.57 points or 0.44% to 22,967.28, KLSE Composite declined by 6.46 points or 0.36% to 1,797.75, Jakarta Composite was down by 20.95 points or 0.47% to 4,421.33, and Straits Times was down by 1.15 points or 0.04% to 3,185.57.