Markets pare some gains in afternoon session

Indian bourses after showing outperformance in early trades, pared some gains in afternoon session but continued to trade in green on the back of buying witnessed in defensive sector stocks such as IT, teck and healthcare. Sentiments got some support as Prime Minister Narendra Modi asserted that monsoon in the country has remained weak so far, but it is likely to improve substantially in the next two months. Further, Reserve Bank statement that prospects of economic recovery in India look bright following the formation of a stable government also added to optimistic sentiments. Though most of the sectoral indices were trading in green, fresh selling by funds and retail investors in metal and realty stocks dragged the major indices lower from the intra-day high level. IT was the top gaining index up by around 2% whereas metal index was top loser trading down by around 0.68%. Buying was broad-based with both mid cap and small cap indices trading up by over 0.35%.

Ranbaxy Laboratories has surged around 6% to Rs 503 on reports that the drug maker has received the US FDA's approval to sell a generic version of Novartis's hypertension medicine, Diovan. SRF has rallied around 14% to Rs 604, also its record high on the BSE, on back of heavy volumes. Kesoram Industries, extending its previous day’s 8% rally, was trading higher by 5% to Rs 127 after the company announced it had set up a three-member committee of directors to explore options to reorganise its businesses.

On global front, most of the Asian equity indices were trading in red with Straits Times down by 0.27% and Jakarta Stock Index down by 0.71%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,500 and 25,000 levels respectively. The market breadth on BSE was positive, out of 2,606 stocks traded, 1,553 stocks advanced, while 947 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,142.90 up by 80.23 points or 0.32% after trading in a range of 25,209.61 and 25,096.55. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.63%.

The gaining sectoral indices on the BSE were IT up by 2.01%, Healthcare up by 1.99%, Teck up by 1.39%, Consumer Durables up by 1.28% and Oil and Gas up by 0.35%. On the flip side, Metal down by 0.68%, Realty down by 0.58%, Bankex down by 0.10% and Auto down by 0.04% were the losing indices on BSE.    

The top gainers on the Sensex were Sun Pharma up by 4.17%, TCS up by 2.90%, Wipro up by 1.69%, Dr Reddy’s Lab up by 1.25% and Infosys up by 1.21%. On the flip side, Bharti Airtel down by 2.47%, BHEL down by 2.11%, Hindalco Inds down by 2.00%, M&M down by 1.50% and Coal India down by 1.00% were the top losers on the BSE.

Meanwhile, the government has extended implementation of National Food Security Act by three months and stated that all states of the country will get a time frame of three months to implement the Act. The government has called a meeting of states’ Food Ministers on July 5 to discuss the Act’s rollout and the problems faced by the states. The meeting would also discuss steps that states should take to check hoarding and tackle inflation.

Earlier, states were given time till July 4 to implement the Act but so far only 5 states have implemented the Food Security Act and 6 states have implemented the Act partially. More than 19 states and union territories are yet to implement the provisions of the Act.

Food Security Act is aimed at providing highly-subsidised food grains to 800 million poor people in addition to continuation of the support price for the farmers. Food Security Act to give nation's two-third population the right to get 5 kgs of foodgrains every month per person at highly subsidised rates of Rs 1-3 per kg, costing around Rs 1,25,000 crore annually for the government to supply around 62 million tonnes of rice, wheat and coarse cereals to identified beneficiaries. The Act is expected to broaden the fiscal deficit of the government in future. 

The CNX Nifty is currently trading at 7,513.30 up by 20.10 points or 0.27% after trading in a range of 7,538.75 and 7,503.80. There were 28 stocks advancing against 22 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 4.19%, TCS up by 3.22%, Tech Mahindra up by 2.36%, HCL Tech up by 2.36% and Wipro up by 1.60%. On the flip side, Ultra-tech Cement down by 3.06%, McDowell down by 2.34%, Bharti Airtel down by 2.32%, BHEL down by 2.05% and Hindalco Inds down by 2.03% were the major losers on the index.

Most of the Asian equity indices were trading in red; Straits Times down by 0.27% to 3,269.39, Taiwan Weighted down by 0.15% to 9,306.83 and Jakarta Stock Index down by 0.71% to 4,837.83. While, Hang Seng up by 0.06% to 23,212.66 and Shanghai Composite up by 0.23% to 2,043.29