Metal and mining shares in demand

Key benchmark indices were trading with small gains in morning trade. At 10:25 IST, the barometer index, the S&P BSE Sensex was up 37.11 points or 0.13% to 27,564.33. The Nifty 50 index was currently up 12 points or 0.14% at 8,526.

In overseas stock markets, most Asian stocks were trading lower with uncertainty over next week's US presidential election sending investors rushing for the sidelines. US stocks fell yesterday, 2 November 2016, with the S&P 500 recording its longest losing streak in five years after the Federal Reserve, as expected, kept interest rates unchanged. The Federal Reserve yesterday, 2 November 2016 signaled that the time for another interest-rate hike is approaching and it doesn't need much more evidence before moving. The Fed policy committee voted 8 to 2 to maintain interest rates in a range of 0.25 to 0.5%. The Fed said inflation has been moving up toward its 2% target since the beginning of the year. Meanwhile, polls showed a tightening presidential race. A latest poll reportedly showed Republican nominee Donald Trump taking a one-point lead over rival Hillary Clinton. Investors generally view Clinton as a known quantity, but there is deep uncertainty about what a Trump win might mean for US economic policy, free trade and geopolitics.

Closer home, the broad market depicted strength. There were more than two gainers against every loser on BSE. 1,690 shares advanced and 586 shares declined. A total of 78 shares were unchanged. The BSE Mid-Cap index was currently up 0.41%. The BSE Small-Cap index was currently up 0.69%. Both these indices outperformed the Sensex.

Metal and mining stocks were in demand. Vedanta (up 2.89%), JSW Steel (up 0.81%), Tata Steel (up 1.2%), Steel Authority of India (Sail) (up 2.72%), Hindustan Zinc (up 1.78%), Jindal Steel & Power (up 1.87%), Hindalco Industries (up 5.21%), NMDC (up 0.61%) and Hindustan Copper (up 1.88%) edged higher. National Aluminium Company shed 0.18%.

Telecom stocks rose. Idea Cellular (up 1.41%), MTNL (up 1.26%), Tata Teleservices (Maharashtra) (up 4.1%) and Reliance Communications (up 0.65%) gained. Bharti Airtel slipped 0.31%.

Shares of Bharti Infratel gained 2.45%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.

On the macro front, Markit Economics will announce the India Services PMI data for October 2016 today, 3 November 2016. The seasonally adjusted Nikkei India Services Business Activity Index registered 52 in September down from August's 43-month high of 54.7.

Meanwhile, international rating agency Standard & Poor's (S&P) yesterday, 2 November 2016 affirmed "BBB-/A-3" rating with stable outlook for India. The stable outlook balances India's sound external position and inclusive policy making tradition against the vulnerabilities stemming from its low per capita income and weak public finances, S&P said. The ratings on India reflect the country's sound external profile and improved monetary credibility, the agency said. The outlook indicates that rating agency does not expect to change its rating on India this year or next, based on our current set of forecasts, it said. Improvements in policy making continue to strengthen the prospects for India's economic and fiscal performance. Wide fiscal deficits, a heavy debt burden, and low per capita income nonetheless detract from the sovereign's credit profile, it added.

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