Markets trading flat; ITC, Tata Motors down over 1%

Markets continued to trade flat with negativc bias weighed down by profit taking in IT majors after recent gains post upbeat earnings from Infosys and index heavyweight ITC.

At 10:30AM, the 30-share Sensex was down 42 points at 26,342 and the 50-share Nifty was down 17 points at 7,868.

The rate of retail inflation in September eased to 6.46 per cent — the lowest since the series was launched in January 2012 — driven mainly by a significant drop in food prices and subdued demand for industrial goods. The rate, as measured by the consumer price index (CPI), had stood at 7.73 per cent in August and 9.84 per cent in September last year.

Foreign investors were net sellers in equities to the tune of Rs 671 crore on Monday.

Asian stocks rebounded after the recent correction with the exception of Japanese shares which dropped to two-month lows on global growth concerns. The benchmark Nikkei was down nearly 2%. Hang Seng trimmed early gains and was up 0.7% higher while shares in mainland China were trading with marginal gains with the Shanghai COmposite up 0.1% while Straits Times firmed up and was trading 0.3% higher.

The BSE Realty index was the top loser down nearly 7% followed by BSE Metal, IT, FMCG and Auto indices.BSE Bankex was the top sectoral gainer up 0.6% followed by Capital Goods, Healthcare, Power, Oil and Gas indices among others.

Reliance Industries was up 1% after it beat analysts’ expectations during the July-September quarter, with its profit increasing 1.7 per cent over the year-ago period. At Rs 5,972 crore, however, its net profit was 1.7 per cent higher than Rs 5,873 crore in the same period last year.

Rate sensitives gained on the back of easing consumer price inflation. SBI, Bajaj Auto, Axis Bank, ICICI Bank, Maruti Suzuki, M&M were up 0.2-2.5% each.

Capital Goods shares also rebounded from their recent lows. L&T and BHEL were up 0.3-2.6% each.

Pharma shares were also trading higher with Cipla, Sun Pharma and Dr Reddy's Labs up 0.2-1.5% each.

DLF slumped 22% to Rs 114 after SEBI barred the real estate major and six of its top executives, including Chairman K P Singh, from accessing the capital market for three years. The Sebi order, after finding the company guilty of “active and deliberate suppression” of material information at the time of its public issue, leaves DLF out in the cold even as others capitalise on the current bull run.

Among other shares, Sintex Industries extended gains with a 4.5% uptick to trade at Rs 90.85 on the back of robust second quarter earnings. Yesterday, the stock had gained 17%.

IL&FS Engineering and Construction was locked in upper circuit of 20% at Rs 65.45 on BSE after the company said it has won a Rs 1,232 crore order from National Highways Authority of India (NHAI) for widening the 127 km Patna-Gaya-Dobhi section of NH 83 in Bihar.

United Phosphorus Limited (UPL) has gained around 4.5% on BSE after RBI allowed foeign investors to hold up to 74% in paid up capital in the company under Portfolio Investment Scheme (PIS) as the prescribed limit has gone below threshold.

Dion Global solutions has gained around 5% on BSE after the company announced the launch of a new module within its NOVA suite to support the Shanghai - Hong Kong Stock Connect scheme.

In the broader markets, the BSE Mid-cap index was up 0.5% and Small-cap index was up 0.6%.

Market breadth was positive with 1,184 advances and 872 declines on the BSE.