Benchmarks trade marginally in red in afternoon session

Indian equity benchmarks paired some early losses and were trading marginally in red in afternoon session on the back of buying witnessed in metal, IT and Teck stocks. Investors’ sentiments got support after Indian Current Account Deficit (CAD) narrowed sharply to $5.2 billion, or 1.2 percent of GDP, in the July-September quarter of this fiscal mainly on the back of decline in gold imports and turnaround in exports. Metal was the top gaining sectoral index on the BSE up by 0.70%. Meanwhile, market gains remained capped amid selling witnessed in FMCG, healthcare and banking stocks as the decline in the output of eight core sector industries weighted on the sentiments. On stock specific movement, Jindal Steel, Gail India and Hindalco Inds were trading up by nearly 2.0% higher, while, Dr Reddy’s Lab, NTPC and Sun Pharma were trading down by over 1.00% on BSE.

Among other stocks, Eicher Motors has entered into the list of top 100 most valuable companies in terms of the market captialisation as shares of Eicher Motors, extending it’s nearly 20% rally in past on week , up by nearly 3.6%. Alstom T&D India is trading higher by 2.2% after the company said it has received order worth of Rs 79 crore from the state-run Power Grid Corporation of India (PGCIL) for supplying equipment at substations in Uttar Pradesh.

On global front, Asian markets were trading mixed with Taiwan Weighted down by 0.26%, and Hang Seng down by 0.45% as robust US manufacturing data yet again fuelled fears among investors that the US Federal Reserve may scale back its stimulus sooner than anticipated. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,200 and 20,800 levels respectively. The market breadth on BSE was positive, out of 2,122 stocks traded, 1,108 stocks advanced, while 869 stocks declined on the BSE.   

The BSE Sensex is currently trading at 20,891.06 down by 6.95 points or 0.03% after trading in a range of 20,927.05 and 20,826.73. There were 15 stocks advancing against only 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 0.45%.

The gaining sectoral indices on the BSE were Metal up by 0.70%, IT up by 0.46%, Teck up by 0.43%, Oil and Gas up by 0.39% and Consumer Durables up by 0.26%. While, FMCG down by 0.69%, Healthcare down by 0.12%, Bankex down by 0.05% were losing indices on BSE.

The top gainers on the Sensex were Jindal Steel up by 3.43%, Gail India up by 2.46%, Hindalco Inds up by 2.05%, BHEL up by 1.26% and Maruti Suzuki up by 1.25%. On the flip side, Dr Reddy’s Lab down by 1.51%, NTPC down by 1.29%, Sun Pharma down by 1.00, HDFC down by 0.94% and ITC down by 0.84%.

Meanwhile, In a big sign of relief to Indian policymakers concerned over the deteriorating macro-economic indicators of the country, Indian Current Account Deficit (CAD) narrowed sharply to $5.2 billion, or 1.2 percent of GDP, in the July-September quarter of this fiscal mainly on the back of decline in gold imports and turnaround in exports. During the first half of current fiscal, country’s CAD contracted to $26.9 billion or 3.1 percent of GDP as against $37.9 billion or 4.5 percent of GDP in the corresponding period of previous fiscal.

The decline in CAD was mainly attributed to Indian authorities like the Government and the Reserve Bank of India (RBI) which have been taking a lot of measure to contain the imports and expand country’s exports. Gold and silver imports in April-October period of 2013 declined by 12.86 percent to $24 billion compared to $28 billion in the same period last year.  Recently, the government has hiked gold imports rate to 15% and the RBI also introduced 80/20 rule under which 20% of all gold imports by importers has to be re-exported.

On the other hand, value of exports increased by 6.32% to $179.38 billion during April-October, 2013 as against $168.71 billion in the corresponding period of last year.  On exports front, the government has announced several export boosting measures like sops for exports orientated Special Economic Zones (SEZs). Further, Country’s exports has also got support from reviving demand in the US and European markets as they contribute to around 30% of India’s overall shipments overseas and weakness in domestic currency which has improved competitiveness of Indian exporters. However, country’s net portfolio investment registered an outflow of $6.6 billion amid rising concerns over the US Fed taping of its quantitative easing programme. There was a marginal net outflow of $0.8 billion under equities while the debt component of net FII flows recorded a higher outflow of $5.7 billion.

Applauded over the better than expected CAD for the Q2FY14, both the government and RBI are expecting the CAD to be remained below $56 billion in the current fiscal as compared to the record high of $88.2 billion, or 4.8 per cent of the GDP last fiscal. The significant reduction in CAD benefits the country a lot on macro-economic front as it is a major macro-economic problem that has created huge volatility in the domestic equity markets and currency.

The CNX Nifty is currently trading at 6,212.95 down by 4.90 points or 0.08% after trading in a range of 6,225.40 and 6,194.25. There were 24 stocks advancing against 26 declining on the index.

The top gainers of the Nifty were Jindal Steel up by 3.41%, Gail up by 2.43%, Hindalco Inds up by 2.05%, NMDC up by 1.90% and BHEL up by 1.25%. On the flip side, Dr Reddy’s Lab down by 1.52%, Kotak Bank down by 1.19%, HDFC down by 1.10%, NTPC down by 1.09% and ITC down by 0.93% were the major losers on the index.

The Asian equity indices were trading mixed; Nikkei 225 up by 0.71%, Straits Times up by 0.06%, KLSE Composite up by 0.55%, Shanghai Composite up by 0.32%. While, Jakarta Composite down by 0.74%, Taiwan Weighted down by 0.26%, Hang Seng down by 0.45% and Seoul Composite down by 0.89%.