Benchmarks trade in fine fettle in early deals

After witnessing drubbing in previous two sessions, Indian equity benchmarks have made a positive start and are trading in the green in early deals on Friday as investors opted to buy beaten down but fundamentally strong stocks. Sentiments remained up-beat after Reserve Bank of India (RBI) stated that prospects of economic recovery in India look bright following the formation of a stable government, though supply side issues need to be solved to help monetary policy bring down inflation. Meanwhile, amid weakening monsoon, Prime Minister Narendra Modi has asked for close coordination between the centre and states on implementing contingency plans to tackle the situation and prevent rise in food prices.

On the global front, the US markets ended modestly lower in last session after a Federal Reserve official said interest rates should rise by early 2015. Though, the major indices recovered from early weakness on report that spending edged up by 0.2 percent in May and initial jobless claims edged down in the reporting week, though less than expected. The Asian markets too were trading in red at this point of time on concerns the US may raise its interest rates.

Back home, on the sectoral front, consumer durables, healthcare and software witnessed the maximum gain in trade, while auto remained the lone losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1,309 shares on the gaining side against 502 shares on the losing side while 50 shares remain unchanged.

The BSE Sensex opened at 25132.08; around 70 point higher compared to its previous closing of 25062.67, and has touched a high and a low of 25209.61 and 25096.55 respectively. The index is currently trading at 25170.85, up by 108.18 points or 0.43%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 26.97% stocks advancing against 70.34% declines. The broader indices too were trading in the red; the BSE Mid cap and Small cap indices up by 0.61% and 0.86% respectively. 

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.98%, Healthcare up by 1.93%, IT up by 1.13%, TECk up by 0.83% and Capital Goods up by 0.73%, while Auto down by 0.29% was the lone loser on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 3.60%, TCS up by 1.59%, Wipro up by 1.29%, Dr Reddys up by 1.21% and HDFC up by 0.97%. On the flip side, Bharti Airtel was down by 1.79%, M&M was down by 1.50%, Hindalco was down by 1.48%, Hero MotoCorp was down by 0.60% and Maruti Suzuki was down by 0.60% were the top losers on the Sensex.

Meanwhile, the government has given an in-principle approval to a memorandum of understanding (MoU) allowing China to set up industrial parks in the country. The industrial parks are expected to include special economic zones (SEZs) and manufacturing zones. Uttar Pradesh, Haryana and Andhra Pradesh are possible states where the parks could come up. The move came ahead of the five-day visit of Vice-President Hamid Ansari to China from June 26.

China had already established five industrial parks in ASEAN countries like Vietnam, Cambodia and Indonesia and is keen to set up similar industrial parks in India. The move is likely to enhance the Chinese investment in the country. The government wants to make India a manufacturing hub like China. Since 1991 when India opened up its economy, the investment from China remained sluggish at mere $469 million till now as compared to $16-17 billion from Japan.

The bilateral trade between China and India declined from around $75 billion in 2011 to $65.45 billion in 2013. Furthermore, India has huge trade deficit with China at average around $35 billion. During FY 14, India imported goods worth $51 billion from China, and exported goods worth $14.86 billion back to China. Both the countries have set $100 billion target by 2015. However, India had already asked the Chinese government to provide more access to the market so that the target of $100 billion can be achieved in a more balanced manner. Better access of Chinese markets to domestic IT-enabled services, cotton textiles, home furnishings and pharmaceuticals could help India to reduce the imbalance in trade.

The CNX Nifty opened at 7,514.20; about 21 points higher as compared to its previous closing of 7,493.20, and has touched a high and a low of 7,538.75 and 7,503.80 respectively. The index is currently trading at 7,527.00, up by 33.80 points or 0.45%. There were 35 stocks advancing against 15 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 3.63%, Grasim up by 2.07%, Lupin up by 1.96%, TCS up by 1.71% and Tech Mahindra up by 1.41%. On the flip side, M&M down by 1.86%, Bharti Airtel down by 1.73%, MCDOWELL-N down by 1.61%, Hindalco down by 1.48% and Ultratech Cement down by 0.93% were the major losers on the index.

Asian markets were trading in the red; Nikkei 225 tumbled by 230.80 points or 1.51% to 15,077.69, Hang Seng declined 49.42 points or 0.21% to 23,148.41, KOSPI Index dropped 4.41 points or 0.22% to 1,990.64, Straits Times slipped by 9.18 points or 0.28% to 3,269.39, Jakarta Composite contracted 20.50 points or 0.42% to 4,851.92, Shanghai Composite shed by 7.06 points or 0.35% to 2,031.61, FTSE Bursa Malaysia KLCI dipped 8.70 points or 0.46% to 1,881.27 and Taiwan Weighted was down by 8.81 points or 0.09% to 9,312.13.