The main Indian equity indices are holding on to modest gains in the afternoon trade, with the NSE Nifty sustaining above the 5,700 mark after closing below it in the previous session. The BSE Sensex is up ~0.5% as well, while the broader indices too have notched up strong gains. As a result, the overall market breadth is favourable for the bulls. The INDIA VIX is down ~2% on the NSE today and the Rupee has recovered after Monday's losses.
At 2:56 pm (IST), the BSE Sensex was trading at 18,787, up 78 points over the previous close. It had earlier touched a day's high of 18,885 after opening at a day's low of 18,722.
The NSE Nifty was quoting at 5,703, up 27 points over the previous close. It earlier touched a day’s high of 5,728 and a day’s low of 5,677. It opened at 5,708.
Tata Power, Sterlite Industries, L&T, Dr. Reddy's, Jindal Steel, ICICI Bank, Sun Pharma, Cipla, Tata Steel, UltraTech Cement, Lupin, Ranbaxy, Sesa Goa and BPCL are the top gainers in the two main indices.
Bajaj Auto, Bharti Airtel and BHEL are the noteworthy losers in the two main indices.
The BSE Small-Cap index and the BSE Mid-Cap index are both up by ~0.7% each.
Pharma, Capital Goods and Consumer Durables indices are the biggest leaders among the sectoral plays followed by FMCG, Metals and Banking indices.
Power, PSU and Oil & Gas indices are rather subdued. The rest of the sectoral indices are up marginally.
The undertone today has received a boost from firm trading across other Asian markets.
Asian equity benchmarks closed mostly higher, led by strength in the Chinese and Hong Kong indices, after the central bank in China injected fresh liquidity into its banking system to ease monetary conditions amid concern about slowing economic growth.
However, a cut in the global growth forecast by the IMF and its warning about deteriorating economic conditions in the US and Europe partly dampened the mood across Asian markets today.
The key indices in China has rallied by ~2% while the Hang Seng in Hong Kong has gained ~1% after the People's Bank of China (PBOC) offered 265 billion yuan (US$42.1bn) in reverse repurchase agreements in an open-market operation, in a bid to ease tight liquidity conditions.
Equity markets in China will also be influenced by the completion of once-in-a-decade power transition at next month’s Communist Party congress.
Australian stocks climbed to a fresh 14-month high, as commodity producers rallied while Japanese stocks declined as trading resumed after Monday’s holiday.
European stock markets opened slightly higher today, with the Stoxx Europe 600 index up 0.1%. Drug makers helped lift the European benchmark.
The key stock indices in Germany, France and the UK were more or less flat.
Meanwhile, Finance Minister P. Chidambaram has warned of further slowdown if reforms are stalled. He has promised more reforms going ahead while also pledging to deliver a credible plan on fiscal consolidation. Indian stocks headed north early on after a two-day fall. Corporate results, economic data and RBI policy meeting will be the main events to keep on one’s radar this month.
US stocks closed lower on Monday amid concerns about upcoming earnings season. European equity indices fell yesterday due to ongoing trepidation over the region’s fiscal mess.
The IMF meanwhile has slashed its 2012 GDP growth forecast for India, to 4.9% from 6.2% earlier. IMF has also lowered the global growth estimates, citing mostly problems in Europe. It has also warned of dire consequences from the US fiscal cliff.
The World Bank on Monday cut the growth projection for China to 7.7%. However, Chinese markets are up today after the central bank injected fresh liquidity to ease tight money conditions.
Telecom companies are in focus after the EGoM recommended one-time fee for all existing spectrum based on the upcoming 2G auction on a prospective basis.
DLF might continue to be in the spotlight owing to the controversial property deals with Robert Vadra.
State-run oil marketing companies (OMCs) have marginally cut petrol prices citing strength in the rupee.
The Indian stock indices witnessed minor profit booking amid weakness in the global risky assets and renewed concern about the eurozone, which led to a close in Nifty below 5700 levels. The pivot levels for the current uptrend have been shifted to 5630, which turns out to be a make or break level in the near term. Hence, we expect stock prices to oscillate in the trading range for the next few trading sessions before any fresh upmove.
The BSE will shift 71 scripts to the “T” group w.e.f. October 12 (Friday) and would attract a circuit filter of 5% or lower as applicable. The deals in these scrips will be settled on Trade to Trade basis.
Trend in FII Flows: The FIIs were net buyers of Rs. 5.63bn in the cash segment on Monday while the domestic institutional investors (DIIs) were net sellers of Rs. 7.78bn, as per the provisional figures released by the NSE.
The FIIs were net sellers of Rs. 2.32bn in the F&O segment on Monday, according to the provisional NSE data.
The foreign funds were net buyers of Rs. 40bn in the cash segment on Friday while the Mutual Funds were net sellers of Rs. 199mn, according to the SEBI figures.
Global Data Watch Today: UK BRC Retail Sales Monitor - All (Sep), UK RICS Housing Price Balance (Sep), Japan Current Account (Aug), Japan Trade Balance – BOP Basis (Aug), EU Ecofin Meeting, Australia National Australia Bank’s Business Confidence (Sep), Australia National Australia Bank’s Business Conditions (Sep), Japan BOJ’s Governor Shirakawa Speech, Australia RBA Deputy Governor Lowe Speech, Japan BOJ Monthly Economic Survey, Japan Eco Watchers Survey - Outlook (Sep), Japan Eco Watchers Survey - Current (Sep), France Trade Balance (Aug), France Budget (Aug), France Imports and Exports (Aug), EU ECB President Draghi’s Speech, Italy Q2 GDP, UK Industrial Production (Aug), UK Manufacturing Production (Aug), UK Total Trade Balance (Aug), UK Goods Trade Balance (Aug), UK Trade Balance – Non EU (Aug), Greece Consumer Price Index (Sep), Greece Consumer Price Index - Harmonized (Sep), Greece Producer Price Index (Sep), EU Samaras – Merkel Meeting and US NFIB Business Optimism Index (Sep).