Markets pare early gains; metal shares up

Benchmark indices are trading weak after paring early morning gains, ahead of a truncated trading week, with gains in information technology and metal shares offsetting some of the losses posted by auto and consumer durable shares.

At 10:30 AM, Sensex was down 17 points at 26,849 while Nifty was down 9 points at 8,313. In the broader market, BSE Mid cap and Small cap indices have gained around 0.8% each. Market breadth is positive with 1,408 gainers, as against 820 declines.

"We firmly believe the upward bias will extend further and sectors like banking, auto will continue to outperform in the coming week as well. Rather focusing on any particular level in index, it’s always advisable to be with broader trend, which is clearly up. So, any profit taking or decline can be utilise to initiate fresh long positions but keep caution in stock selection as we are trading at life time high," said Jayant Manglik, President-retail distribution, Religare Securities in a report last week.

Meawhile, among macro economic data, HSBC Manufacturing Purchasing Managers' Index (PMI) for October 2014 will be announced today, 3 November 2014.

The rupee is trading at 61.49 versus its previous close of 61.39 against US Dollar.

Sectors and stocks

BSE IT and Teck indices have gained around 1% each in late morning trades followed by BSE Metal index, which has gained around 0.8%. BSE Auto index, on the other hand, has slipped around 0.8%.

IT stocks continue to trade firm with Infosys and TCS both gaining above 1% followed by Wipro gaining around 0.3% With US economy regaining its strength the long term outlook appears bright fr these companies as US companies remain their largest clients.

Among pharma shares, Dr Reddy’s Lab has gained around 2% on reports about possible filing of two new drug applications with the US FDA by the end of next year. However, both Sun Pharma and Cipla have lost around 0.5% each.

Metal shares are trading strong in a weak market with both Tata Steel and Sesa Sterlite both gaining around 1% each while Hindalco has gained around 0.8%.

Among bank shares, Axis Bank and SBI have gained around 0.2-0.5% each while HDFC Bank and ICICI Bank have lost around 0.3% each.

In the oil & gas sector, GAIL is under pressure on account of profit booking and has lost around 3.5%. Reliance, too, has lost around 0.5% while ONGC is trading flat.

Shares of most frontline automobile companies are trading lower after reporting drop in vehicle sales during the month of October despite of the festive season. Mahindra & Mahindra has lost the most at around 2.3% followed by Bajaj Auto and Hero Motocorp losing around 2% each while Tata Motors is down 0.7%.

Among other shares, shares to aviation companies – Jet Airways (India) and SpiceJet have rallied up to 7% in early morning deals on BSE after state oil marketing companies have cut jet fuel (ATF) prices by a steep 7.3% from Saturday.

Karnataka Bank has surged 6% after reporting a net profit at Rs 88.46 crore for the second quarter ended September 2014 (Q4), on account of lower provisioning. The private sector bank had profit of Rs 28.95 crore in the same quarter last fiscal.