Benchmarks trim losses to trade in green

Indian equity benchmarks trimmed losses and started trading in green in the late afternoon session on account of buying in frontline counters. Investors however took cautious approach on report that indicated drought-like conditions intensifying with the monsoon not moving an inch for 10 days now, leaving oilseeds, pulses and paddy fields parched and posing the threat of food inflation and weak rural demand in the first year of the Narendra Modi government. Traders were seen piling up positions in IT, HealthCare and TECK while selling was witnessed in Metal, Realty and PSU sector stocks. Buying activity was witnessed in IT stocks after Accenture reported a better-than-expected 7.5% rise in quarterly net revenue. In scrip specific development, Reliance Capital was trading firm on reports that the company may sell 10% stake to Japan’s Mitsubishi Trust Holdings. Ballarpur Industries was trading in green after the company stated that one of its subsidiary is exploring fund-raising from International Finance Corp and also looking for a potential overseas listing. Multi-Commodity Exchange of India was trading in red after announcement that one of its investors, state-run Bank of Baroda, has sold its entire stake in the troubled bourse.

On the global front, the Asian markets were trading mostly in red, while the European markets traded on optimistic note. 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 in the ratio of 1502:1344 while 105 scrips remained unchanged.

The BSE Sensex is currently trading at 25096.10, up by 33.43 points or 0.13% after trading in a range of 25209.61 and 25032.94. There were 10 stocks advancing against 19 stocks declining while 1 stock remained unchanged on the index.

The broader indices were too trading in green; the BSE Mid cap index was up by 0.06%, while Small cap index was up by 0.34%.

The gaining sectoral indices on the BSE were IT up by 2.27%, HealthCare up by 1.89%, TECK up by 1.56%, Consumer Durables up by 0.90% and FMCG up 0.49%. On the flip side, Metal down by 1.23%, Realty down by 0.91%, PSU down by 0.62%, Auto down by 0.45% and Bankex down by 0.44% were the losing indices on BSE.    

The top gainers on the Sensex were Sun Pharma up by 3.87%, TCS up by 3.47%, Dr. Reddy’s Lab up by 2.06%, Wipro up by 2.00% and ITC up by 1.23%.

On the flip side, Hindalco Industries down by 2.66%, BHEL down by 2.55%, Bharti Airtel down by 2.26%, Gail India down by 1.72% and M&M down by 1.59% were the top losers on the BSE.

Meanwhile, highlighting agriculture as a critical sector for India's economy, Industry body Assocham has suggested a slew of short- and long-term measures to provide impetus to agriculture sector.  Industry body has stated that sector has the potential to take India’s gross domestic product (GDP) to 8% and create millions of jobs in rural areas. Besides the sector’s growth would create a surge in consumption-based demand in India, giving the manufacturing and services sectors a boost as well. Agricultural sector, which comprises around 15% of the GDP, expanded at 4.7% in the reported fiscal year as compared to the marginal growth at 1.4% in the FY13.

Assocham suggested the government to adopt an enabling policy environment, modern technology and boost supply-chain efficiency to address food inflation, encourage investment-led growth and ensure food security. In order to enhance supply chain efficiencies, the Agricultural Produce Market Committee (APMC) Act should be implemented in all states.  Further, there is need to replace direct cash transfers and investment subsidies, input-based subsidies to farmers with low-cost credit and linking the MGNREGA to agriculture for asset creation.

Industry Chamber also urged the government to develop effective communication systems between farmers and laboratories by setting up broadband connections and regional Kisan TV channels. Better communication system will help to disseminate real time data along with adoption of a scientific approach to roll out biotechnology applications for better yield and nutrition. Assocham also suggested permitting 100 percent foreign direct investment (FDI) in food processing.

Assocham also recommended the government to take measure for encouraging high value agriculture like horticulture, floriculture, fisheries, poultry and dairy which in turn will enhance job creation in the country. It also suggested that agri-exports be revamped through consistent and stable trade policies and focus on integrated food processing clusters for high-value exports.  

The CNX Nifty is currently trading at 7,500.05, up by 6.85 points or 0.09% after trading in a range of 7,538.75 and 7,482.30. There were 18 stocks advancing against 32 declining ones on the index.

The top gainers of the Nifty were Sun Pharma up by 3.96%, TCS up by 3.55%, HCL Tech up by 3.21%, Tech Mahindra up by 2.59% and Power Grid up by 2.38%. On the flip side, Ultratech Cement down by 3.78%, Hindalco down by 2.78%, BHEL down by 2.73%, McDowell down by 2.31% and Bharti Airtel down by 2.25% were the major losers on the index.

Asian equity indices were trading mostly in red; Nikkei 225 was down 1.39%, KOSPI Index was down 0.33%, Straits Times was down 0.25%, Jakarta Composite was down 0.55%, Shanghai Composite was down 0.11%, FTSE Bursa Malaysia KLCI was down 0.37% and Taiwan Weighted was down by 0.15%, while Hang Seng was up by 0.10%.

The European markets were trading in green; Germany’s DAX added 0.21%, France’s CAC 40 gained 0.35% while UK’s FTSE 100 was up by 0.13%.