Markets trade slightly in the green in early deals

Indian equity benchmarks are trading slightly in the green terrain in early deals on Tuesday, as investors opted to buy beaten down but fundamentally strong stocks after two days of drubbing. Rally in software and technology counters mainly supported the sentiments as the Indian rupee weakened against the dollar. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 194.10 crore on June 16, 2014, as per provisional data from the stock exchanges. Meanwhile, Finance Minister Arun Jaitley has attributed the rise in inflation partly to withholding of food stocks by traders and has said the Centre is committed to ease supply side bottlenecks and has also asked states to take firm measures against hoarders to check speculation.

On the global front, the US markets ended slightly higher in the last session, though the trade remained lackluster throughout the day as traders weighed worries about the deteriorating security situation in Iraq. The Asian markets were trading mixed at this point of time, while Japanese market strengthened on weaker yen, all other indices are swinging in and out of the red.

Back home, on the sectoral front, oil and gas, infrastructure and public sector undertaking witnessed the maximum gain in trade, while fast moving consumer goods remained the lone loser on the BSE sectoral space. The broader indices however were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1283 shares on the gaining side against 497 shares on the losing side while 48 shares remain unchanged.

The BSE Sensex opened at 25189.46; around just a point lower compared to its previous closing of 25190.48, and has touched a high and a low of 25251.40 and 25139.23 respectively. The index is currently trading at 25241.30, up by 50.82 points or 0.20%. There were 20 stocks advancing against 10 declines on the index.

The overall market breadth has made a strong start with 70.19% stocks advancing against 27.19% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices up by 0.98% and 1.24% respectively. 

The top gaining sectoral indices on the BSE were, while Oil and Gas up by 1.19%, Infrastructure up by 1.16%, PSU up by 1.13%, Capital Goods up by 1.10% and Power up by 0.95%, while FMCG down by 0.28% was the lone loser on the sectoral index.

The top gainers on the Sensex were ONGC up by 1.60%, Coal India up by 1.40%, Bharti Airtel up by 1.34%, GAIL up by 1.33% and BHEL up by 1.12%. On the flip side, M&M was down by 1.39%, HDFC was down by 1.35%, Hero MotoCorp was down by 0.78%, Bajaj Auto was down by 0.68% and Dr Reddys Lab was down by 0.67% were the top losers on the Sensex.

Meanwhile, the global rating agency Fitch, in its latest report, has highlighted that a strong government at the Centre and stability in macro economic factors are likely to keep country's public sector banks' outlook stable in the near term.

Fitch further noted that the election of new government with a decisive mandate has abated the macroeconomic and political risks and improved business and investors’ sentiments in the country. Though, downside risks have contained, India will take time to achieve a full recovery for the economy and for the banks as well. Fitch added that long term rating of Indian PSU banks continues to be at 'BBB-'.

Indian banking industry is the most dominant segment of the country’s financial sector and plays an imperative role in the economic development of the country. Over the past two fiscal years, Indian economy has been struggling with slowdown and growth remained below 5 percent for the second time in a row at 4.7 percent during FY14. Industry, being highly correlated to economic scenario, is under pressure due to prevailing economic downturn leading to rise in NPAs of banks. The state-owned banks have been the most affected in terms of rise in their non-performing assets. The top 36 banks of India have reported gross NPAs of Rs 2,34,014 crore by March 2014, a 36 percent jump from Rs 1,71,853 crore on year-on-year basis.

The CNX Nifty opened at 7,525.05; about 8 points lower as compared to its previous closing of 7,533.55, and has touched a high and a low of 7,552.85 and 7,516.25 respectively. The index is currently trading at 7,546.35, up by 12.80 points or 0.17%. There were 35 stocks advancing against 15 declines on the index.

The top gainers of the Nifty were Asian Paints up by 1.77%, ONGC up by 1.75%, Bharti Airtelup by 1.65%, Cairn up by 1.59% and HCL Tech up by 1.33%. On the flip side, HDFC down by 1.32%, M&M down by 1.17%, Dr Reddys Lab down by 0.92%, Hero MotoCorrp down by 0.82% and Kotak Mahindra Bank down by 0.76% were the major losers on the index.

Asian equity indices were trading mixed; Hang Seng declined 141.72 points or 0.61% to 23,158.95, Straits Times slipped by 17.43 points or 0.53% to 3,272.83, Shanghai Composite decreased by 17.28 points or 0.83% to 2,068.70 and FTSE Bursa Malaysia KLCI was down by 1.11 points or 0.06% to 1,870.47.

On the flip side, Nikkei 225 spurted by 53.96 points or 0.36% to 14,987.25, KOSPI Index soared 4.05 points or 0.20% to 1,997.64, Taiwan Weighted increased 34.84 points or 0.38% to 9,237.77 and Jakarta Composite was up by 0.64 points or 0.01% to 4,886.10.