Benchmark Nifty continues to hold its head above water

After positive opening, Indian equity benchmark Nifty continued to hold its head above water as foreign investors indulged in pumping more funds into Indian equities on optimism that the Budget next week would have strong measures to put finances and the economy back on track. Besides, a mixed trend in other Asian markets also influenced the sentiments here. Currently, the foreign institutional investors are preferring Indian markets to other emerging markets on hopes that the new government at the centre will be able to take the economy back on growth trajectory. Sentiment on the street also improved from Agriculture Minister's statement that the monsoon will pick up pace next week and the government is prepared to deal with any eventuality in case of a shortfall. Meanwhile, stocks related to metal counter continued to trade higher for second day in a row triggered by data showing that China’s manufacturing expanded in June at the fastest pace this year. In scrip specific development, Eicher Motors has soared 10% to Rs 8,999 after reporting a robust 83% year-on-year (y-o-y) growth in total motorcycles sales at 25,303 units in June 2014. Moreover, Apollo Tyres has rallied over 6% after the company said its board has approved a proposal to invest $340 million (around Rs 2,025 crore) to upgrade its manufacturing facilities at Chennai and Kalamassery (Kerala).

On the global front, Asian stocks swung between gains and losses, while the US dollar maintained gains versus major peers, ahead of jobs reports and a euro zone monetary policy decision. Back home, Rupee too was boosted by a strong stock market and foreign exchange flows, along with dollar sales by some companies. The Indian Rupee gained 39 points to close at 59.69, its highest level in more than two weeks, although RBI intervened in the market at around the closing level.

Due to a network outage, the Bombay Stock Exchange has decided to close all markets. Network service vendor HCL team is working to resolve the market and once the network issue is resolved, the BSE will restart. 

The CNX Nifty is currently trading at 7,733.40 up by 8.25 points or 0.11% after trading in a range of 7,754.65 and 7,708.65. There were 24 stocks advancing against 26 declining on the index.

The top gaining sectoral indices on the NSE were, CNX Pharma up by 1.56%, CNX Auto up by 0.52%, CNX IT up by 0.25%, CNX Metal up by 0.24% and CNX FMCG up by 0.17% while CNX Realty down by 0.89%, CNX Energy down by 0.59%, CNX Media down by 0.39% and CNX PSU Bank down by 0.06% were the top losers on the sectoral index.

The top gainers of the Nifty were Sun Pharma up by 3.19%, Tech Mahindra up by 1.87%, Tata Motors up by 1.70%, Coal India up by 1.60% and MCDOWELL-N up by 1.56%. On the flip side, Bajaj Auto down by 2.40%, Hero MotoCorp down by 2.13%, Indusind Bank down by 1.43%, Tata Power down by 1.33% and NTPC down by 1.16% were the major losers on the index.

Meanwhile, With an aim to boost business sentiments in the country, the government has decided to extend the validity period of industrial licence to three years with a provision for further extension of two years. The move is likely to help in expeditious clearance of fresh industrial license applications and the extension of the existing industrial licenses.

However, the government cleared that in the absence of commencement of commercial production, the licence will lapse automatically after five years. The government further notified that in case the company fails to start commercial production of items within three years of issue of licence, the application for extension of licence should be submitted to the concerned administrative ministry, 60 days prior to the expiry of three years period.

As per the World Bank’s report, India ranks at 134th position out of 189 economies in doing business index. However, the government has been taking various measures to improve ranking in ease of doing business. Recently, it has de-licensed several defence products for private sector and has also upgraded the National Industrial Classification Code with a view to make business climate more investor friendly.

Asian equity indices were trading mixed; Nikkei 225 declined 0.18%, Hang Seng decreased by 0.01%, KOSPI Index dipped 0.21% and Jakarta Composite slipped by 0.26%. On the other hand, Shanghai Composite up by 0.28%, Straits Times was up by 0.42% and FTSE Bursa Malaysia KLCI was up by 0.03%.