Market drifts lower on negative global cues

Key benchmark indices registered modest losses on weakness in global stocks. The S&P BSE Sensex fell 113.57 points or 0.4% at 28,220.98, as per the provisional closing data. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty fell 25.20 points or 0.29% at 8,743.95, as per the provisional closing data. The market breadth indicating the overall health of the market was strong. On BSE, 1,725 shares gained and 1,150 shares fell. A total of 129 shares were unchanged. The BSE Mid-Cap index was provisionally up 0.5%. The BSE Small-Cap index was provisionally up 0.62%. Both these indices outperformed the Sensex.

Key indices were trading in red since morning trade after hitting over one-week high at onset of the day's trading session after the International Monetary Fund (IMF) raised India's growth forecast slightly. The Sensex rose 143.10 points or 0.51% at the day's high of 28,477.65 at onset of the day's trading session, its highest level since 26 September 2016. The barometer index lost 145.65 points or 0.51% at the day's low of 28,188.90 in late trade, its lowest level since 3 October 2016. The Nifty rose 37.80 points or 0.43% at the day's high of 8,806.95 at onset of the day's trading session, its highest level since 26 September 2016. The index lost 37.75 points or 0.43% at the day's low of 8,731.40 in late trade.

Meanwhile, the International Monetary Fund (IMF) has raised India's growth forecast a tad, citing the resilience of its economy and robust growth momentum. The IMF now expects the economy to expand 7.6% in 2016-17, up from its earlier projection of 7.4%.

Closer home, the total turnover on BSE amounted to Rs 3170.22 crore, lower than turnover of Rs 4258.42 crore registered during the previous trading session.

Index heavyweight and housing finance major HDFC lost 0.61% after the company announced that the profit on sale of investments declined 60.41% to Rs 19 crore in Q2 September 2016 over Q2 September 2015. Income from dividend rose 7.29% to Rs 456 crore in Q2 September 2016 over Q2 September 2015. The company, under the loan assignment route sold loans amounting to Rs 1939 crore in Q2 September 2016 to HDFC Bank. HDFC sold loans amounting to Rs 13086 crore in the preceding twelve months. The company is scheduled to announce its Q2 September 2016 results on 26 October 2016. The announcement was made after market hours yesterday, 4 October 2016.

Realty stocks gained. DLF (up 2.96%), Indiabulls Real Estate (up 0.27%), Housing Development and Infrastructure (up 0.66%), D B Realty (up 0.76%), Sobha (up 1.28%), Parsvnath Developers (up 0.79%), Godrej Properties (up 0.11%), Prestige Estates Projects (up 2.19%), Oberoi Realty (up 2.33%) rose. Unitech (down 1.15%) fell.

On macro front, data showed today, 5 October 2016, that the health of the Indian private sector economy improved in September, but to a lesser extent than in August. Output and new business increased at softer rates in both the manufacturing and service sectors. Meanwhile, prices charged were raised in line with higher cost burdens. Reflecting softer expansions in activity at both service providers and manufacturers, the seasonally adjusted Nikkei India Composite PMI Output Index fell from August's 42-month high of 54.6 to 52.4 in September. Nonetheless, the latest above-50 reading was the fifteenth in as many months, highlighting ongoing growth in the country. The headline seasonally adjusted Nikkei India Services Business Activity Index registered 52 in September down from August's 43-month high of 54.7, thus the latest reading pointing to a slower rate of expansion that was moderate overall.

In overseas stock markets, European stocks declined as markets digest hawkish comments from US Federal Reserve officials. Most Asian stocks dropped as concern shifted to the likelihood of a US Federal Reserve rate increase by the year's end. Mainland Chinese markets remained closed for the National Day holiday. US stocks closed lower yesterday, 4 October 2016 as investors digested data from the International Monetary Fund and remarks from a Federal Reserve official. Federal Reserve Bank of Richmond President Jeffrey Lacker stating that the central bank should pre-emptively raise short-term interest rates to stave off accelerating inflation.

Global economic growth will remain subdued this year following a slowdown in the United States and Britain's vote to leave the European Union, the IMF said in its October 2016 World Economic Outlook yesterday, 4 October 2016. The world economy will expand 3.1% this year, the IMF said, unchanged from its July projection

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