Markets trade slightly in green ahead of Credit Policy

Indian equity benchmarks were trading slightly in the positive in early deals on Tuesday as investors remained on sidelines ahead of the Reserve Bank of India’s monetary policy announcement later in the day. Street is mostly expecting that Governor Raghuram Rajan will hold interest rates despite a change of guard at the centre. However, a surprise rate cut too cannot be ruled out, which would be a big sentiment positive for the market and the industry. Sentiments also remained up-beat after the eight core industries’ output grew by 4.2 per cent in April, higher than 3.7 per cent registered in the corresponding period a year ago. Some support also came in from report that foreign institutional investors (FIIs) bought shares worth a net Rs 234.49 crore on June 2, 2014, as per provisional data from the stock exchanges.

On the global front, the US markets ended mixed overnight as traders remained concerned by an erroneous report from the Institute for Supply Management showed an unexpected slowdown in the pace of growth in the manufacturing sector in the month of May. The Asian markets were trading mostly in green at this point of time, extending their gains with report of China’s official Purchasing Managers’ Index rising to 50.8 in May, the highest level since December.

Back home, on the sectoral front, metal, capital goods and consumer durables witnessed the maximum gains in trade, while fast moving consumer goods and banking remained the only losers on the BSE sectoral space. The broader indices too were trading with traction in early deals, while the market breadth on the BSE was positive; there were 1,189 shares on the gaining side against 622 shares on the losing side while 65 shares remain unchanged.

The BSE Sensex opened at 24,729.22; about 45 points higher compared to its previous closing of 24,684.85, and has touched a high and a low of 24,781.39 and 24,692.06 respectively. The index is currently trading at 24,736.09, up by 51.24 points or 0.21%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 63.38% stocks advancing against 33.16% declines. The broader indices too were trading with traction; the BSE Mid cap and Small cap indices up by 0.53% and 0.52% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 1.61%, Capital Goods up by 1.02%, Consumer Durables up by 1.00%, Oil & Gas up by 0.87% and PSU up by 0.76% while, FMCG down by 0.52% and Banking down by 0.34% were the only losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 2.87%, NTPC up by 2.23%, SSLT up by 2.11%, Coal India up by 2.02% and ONGC up by 1.62%. On the flip side, Dr Reddys Lab was down by 1.55%, ITC was down by 1.08%, Bharti Airtel was down by 0.57%, Tata Motors was down by 0.47% and Hindustan Unilever was down by 0.42% were the top losers on the Sensex.

Meanwhile, the new Government has outlined an ambitious Rs 25,000 crore plan to create a national waterway grid linking Brahmaputra, Mahanadi, Godavari and Ganga rivers. The eight-year project aims to ensure high water levels in rivers through the year by linking the Himalya Rivers with seasonal rivers, improving rivers role in crop irrigation and making them navigable.

Futher, the waterway grid will also help control floods as the excess water of rivers, which have strong seasonal flows, can be spread to other rivers. The proposed waterway grid will have road linkages to ports to facilitate faster movement of cargo. The transportation of goods through this network could save of about Rs 300 per tonne. The minister of roads and shipping has given an in-principle clearance to this eight-year project. Further, Inland Waterways Authority of the country has written to state governments to plan roads keeping in view waterways falling in their states.

Meanwhile, same move of inter-linking of rivers was also introduced by the NDA government under Atal Bihari Vajpayee during 2002. It had set up a task force to look into inter-linking of rivers and in the same year, the Supreme Court ordered the constitution of a committee to take the idea forward. However, the plan did not implement due to some concerns.

The CNX Nifty opened at 7,375.35; about 13 points higher as compared to its previous closing of 7,362.50, and has touched a high and a low of 7,390.90 and 7,362.25 respectively.

The index is currently trading at 7,375.05, up by 12.55 points or 0.17%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Tata Steel up by 2.93%, NTPC up by 2.14%, Coal India up by 1.96%, SSLT up by 1.96% and Ambuja Cement up by 1.79%. On the flip side, Dr Reddys Lab down by 1.69%, HCL Tech down by 1.42%, Indusind Bank down by 1.28%, ITC down by 1.01% and Kotak Mahindra Bank down by 0.86% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite increased 4.76 points or 0.23% to 2,043.98, Hang Seng gained 162.12 points or 0.70% to 23,243.77, Jakarta Composite strengthened by 23.06 points or 0.47% to 4,935.15, KLSE Composite rose 5.02 points or 0.27% to 1,869.27, Nikkei 225 soared 132.65 points or 0.89% to 15,068.57, Seoul Composite climbed by 0.14 points or 0.01% to 2,002.14 and Taiwan Weighted was up by 33.77 points or 0.37% to 9,109.68.

On the flip side, Straits Times was down by 5.47 points or 0.17% to 3,296.77.