Benchmarks pare early gains; trade near neutral line

Indian bourses after showing outperformance in early deals were trading flat in afternoon session, coming off their high points of the day on account of profit taking amid weak Asian cues. Profit booking emerged in frontline blue chip stocks after the recent gains dragging the major indices down, while most sectoral indices were already trading in red. Though, losses remained capped as gains in defensive sector stocks such as IT, teck and healthcare stocks provided support to domestic benchmarks. Investors’ sentiments were dampened as World Bank has scaled down its estimate for India's economic growth this financial year to 5.5%, as compared to 6.2% in its January Report. Further, there was cautiousness among investors ahead of crucial macro economic data such as trade deficit, consumer price index (CPI) inflation data for May and the Index of Industrial Production (IIP) data for April. FMCG index was the top losing index on BSE as weak monsoon forecast by Indian Meteorological Department (IMD) deteriorated the outlook for FMCG sector. Selling was also witnessed in power and consumer durable stocks.

All three listed subsidiaries of State Bank of India (SBI) - State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM) and State Bank of Travancore (SBT) have rallied by up 18% on the bourses on reports that SBI proposes to merge its five remaining subsidiaries with itself. Further, Infosys has surged around 5% to Rs 3,215, its highest single day gain since July 12, 2013, on back of heavy volumes on the bourses. On the other hand, L&T Finance Holdings has dipped over 5% to Rs 77.55 after the promoter Larsen & Toubro (L&T) share sale programme for diluting 0.95% of its stake commenced today at bourses.

On global front, Asian equity indices were trading in red with Shanghai Composite down by 0.18% and Hang Seng down by 0.34%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,700 and 25,000 levels respectively. The market breadth on BSE was negative, out of 2,823 stocks traded, 1,789 stocks advanced, while 962 stocks declined on the BSE. The BSE Sensex is currently trading at 25,583.27 down by 0.42 points after trading in a range of 25,735.87 and 25,515.37. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index up by 0.80%.

The gaining sectoral indices on the BSE were IT up by 2.62%, Teck up by 1.89% and Healthcare up by 0.89%. On the flip side, FMCG down by 1.34%, Power down by 1.06%, Consumer Durables down by 1.05%, Infrastructure index down by 0.88% and Capital Goods down by 0.68% were the losing indecies on BSE.  

The top gainers on the Sensex were Infosys up by 5.05%, Cipla up by 1.52%, SBI up by 1.43%, Wipro up by 1.29% and TCS up by 1.25%. On the flip side, HUL down by 2.90%, Tata Power down by 2.62%, NTPC down by 2.23%, SSLT down by 2.03% and L&T down by 1.44% were the top losers on the BSE.

Meanwhile, industry body, the Confederation of Indian Industry (CII) has asked the government to declare mining as a strategic and infrastructure sector. CII stated that mining sector is critical for the manufacturing growth of the country and plays an important role in creating employment, preventing drain of valuable forex and propelling growth in some of the most backward states. 

The CII has also sought for a reduction in the role of geographical information systems (GIS) as an explorer. GIS should focus on steps which can create an environment to attract high exploration activities in the country. Industry body further highlighted that critical step such as allowing transfer of mining licences from one company to another seamlessly should be taken with immediate effect. Capacity building within state machinery should be expedited to boost the Indian mining sector.

Regarding the proposed changes in sector imports norms, CII stressed that Indian mining sector is one of the most heavily taxed in the world and any attempts to levy further imposts must be taken after analyzing its impact on sector.

Over the last couple of years, India mining sector has been struggling with slowdown. High borrowing cost and weak investment were the leading factors impacting the sector growth due to policy uncertainty. India mining sector witnessed a contraction of 1.4% at 1.06 lakh crore in FY 14 as against 2.2% de-growth in the FY13.

The CNX Nifty is currently trading at 7,650.55 down by 5.85 points or 0.08% after trading in a range of 7,700.05 and 7,632.60. There were 20 stocks advancing against 30 declining on the index.

The top gainers of the Nifty were Infosys up by 4.80%, Kotak Bank up by 2.67%, Indusind Bank up by 2.02%, Cipla up by 1.73% and Tech Mahindra up by 1.63%. On the flip side, HUL down by 3.16%, NTPC down by 2.29%, Tata Power down by 2.09%, DLF down by 2.04% and Cairn down by 2.04% were the major losers on the index.

Asian equity indices were trading in red; Shanghai Composite down by 0.18% to 2,048.80, Hang Seng down by 0.34% to 23,237.45, Jakarta Stock Index down by 0.11% to 4,940.56 and Straits Times down by 0.26% to 3,285.16. While, Nikkei up by 0.39% to 15,056.52 and Taiwan Weighted up by 0.08% to 9,229.80.