Benchmarks trade in fine fettle in early deals

Extending their northward journey for third straight day, Indian equity benchmarks are trading in fine fettle in early deals on Tuesday as sentiments remained up-beat on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,288.16 crore on June 30, as per provisional data from the stock exchanges. Meanwhile, shares of oil marketing companies (OMCs) edged higher after OMCs have raised petrol prices by Rs 1.69 a litre and diesel by 50 paise a litre. However, gains remained capped after output in eight important infrastructure industries, termed as the core sectors, grew at a four-month low of 2.3 per cent in May over a year before, compared to 4.2 per cent in April, with half of these seeing a contraction in production. At the same time, India's fiscal deficit in the first two months of the 2014/15 financial year touched Rs 2.4 lakh crore, or 45.6% of the full-year target of 5.28 lakh crore, much higher than the deficit of 33.3% during the comparable period in the previous fiscal year. 

On the global front, the US markets made a mixed closing overnight as the bourses lacked direction throughout the trading day ahead of the release of some key economic data later in the week. Traders largely shrugged off the National Association of Realtors data showing a sharp jump in pending home sales in May. Most of the Asian equity indices were trading in the red at this point of time, however, Japanese market surged over a percent on report that large Japanese companies across all industries plan to increase capital spending by 7.4 percent this fiscal year.

Back home, on the sectoral front, metal, realty and auto witnessed the maximum gain in trade, while software and technology remained the only losers on the BSE sectoral space. The broader indices too were trading with traction in early deals, while the market breadth on the BSE was positive; there were 1421 shares on the gaining side against 505 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex opened at 25469.94; around 56 point higher compared to its previous closing of 25413.78, and has touched a high and a low of 25536.22 and 25468.40 respectively. The index is currently trading at 25521.22, up by 107.44 points or 0.42%. There were 22 stocks advancing against 8 declines on the index.

The overall market breadth has made a strong start with 71.44% stocks advancing against 25.39% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices up by 0.71% and 1.10% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 2.75%, Realty up by 1.25%, Auto up by 1.07%, PSU up by 0.92% and Infrastructure up by 0.92%, while IT down by 0.38% and TECk was down by 0.04% were the only losers on the sectoral index.

The top gainers on the Sensex were Hindalco up by 6.89%, SSLT up by 2.74%, Tata Steel up by 2.40%, M&M up by 2.10% and BHEL up by 1.76%. On the flip side, TCS was down by 0.61%, Sun Pharma was down by 0.52%, Wipro was down by 0.45%, Infosys was down by 0.39% and HDFC was down by 0.37% were the top losers on the Sensex.

Meanwhile, in a move to promote pharmaceuticals industry, government is mulling reviving country's active pharmaceutical ingredient (API) or bulk drug market by formulating a separate policy, which could also cater to domestic requirements. This policy could be a shot in the arm given the timing as the demand for Indian APIs is going bigger and stronger in the US and Europe given the focus on quality and compliance. The Department of Pharmaceuticals (DoP), for this, will soon hold discussions with various stakeholders to prepare a white Paper for the policy.

While India previously was once a preferred destination for sourcing low-cost, good quality API for manufacturing pharmaceutical formulations, the global bulk drug market was globally taken over by China in the past few years by creating huge capacities. Besides, landed price of API from China in India is 15-20% less than its production cost here, making it more viable for companies to import.

Presently, the domestic API manufacturing industry, mostly based out of Hyderabad and Ahmedabad, currently accounts for 8-10% of India's Rs 79,000-crore pharmaceutical market. The rest comprises formulations.

The CNX Nifty opened at 7,629.00; about 18 points higher as compared to its previous closing of 7,611.35, and has touched a high and a low of 7,641.85 and 7,618.15 respectively. The index is currently trading at 7,635.40, up by 24.05 points or 0.32%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Hindalco up by 6.58%, Jindal Steel up by 2.77%, Tata Steel up by 2.57%, SSLT up by 2.36% and M&M up by 2.35%. On the flip side, Asian Paints down by 0.93%, TCS down by 0.85%, HDFC down by 0.72%, Wipro down by 0.70% and Infosys down by 0.64% were the major losers on the index.

Asian markets were trading mostly in the red; KOSPI Index slipped 5.90 points or 0.29% to 1,996.31, Straits Times declined by 14.26 points or 0.44% to 3,241.41, Jakarta Composite decreased 10.71 points or 0.22% to 4,867.87, Shanghai Composite tumbled by 3.32 points or 0.16% to 2,045.01 and FTSE Bursa Malaysia KLCI was down by 5.30 points or 0.28% to 1,877.41.

On the flip side, Nikkei 225 soared 185.64 points or 1.22% to 15,347.74 and Taiwan Weighted was up by 54.70 points or 0.58% to 9,447.77.

The Hong Kong market remained shut for the trade today for Holiday.