Benchmarks trade slightly in the green

Indian equity benchmarks are trading slightly in the green in early deals on Friday as sentiments remained up-beat after industry body CII has hailed the government's decision to extend validity period of industrial licence to three years, saying that it sends strong signal that the government is committed to enhance the ease of doing business in India. Also, the Finance Minister, Arun Jaitley, in his meeting with State Finance Ministers for GST implementation said that centre is ready to engage with the States with an 'open mind' on compensation issues.

On the global front, the US markets ended higher after Labor Department reported that US employment rose by much more than anticipated in the month of June, overshadowing a separate report that initial jobless claims in the week ended June 28th inched up marginally. The Asian markets were exhibiting mixed trend with some of the indices trading higher, taking cues from the US markets where some of the indices advanced to their longest run of weekly gains.

Back home, on the sectoral front, healthcare, infrastructure and consumer durables witnessed the maximum gains in trade, while capital goods and metal remained the only losers on the BSE sectoral space. The broader indices were trading with traction, while the market breadth on the BSE was negative; there were 1,281 shares on the gaining side against 698 shares on the losing side while 82 shares remain unchanged.

The BSE Sensex opened at 25844.80; around 21 point higher compared to its previous closing of 25823.75, and has touched a high and a low of 25884.29 and 25809.04 respectively. The index is currently trading at 25854.28, up by 30.53 points or 0.12%. There were 22 stocks advancing against 8 declines on the index.

The overall market breadth has made a strong start with 62.15% stocks advancing against 33.87% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices up by 0.69% and 0.85% respectively. 

The top gaining sectoral indices on the BSE were, Healthcare up by 0.87%, Infrastructure up by 0.85%, Consumer Durables up by 0.77%, Oil and Gas up by 0.61% and Power up by 0.54%, while Capital Goods down by 0.25% and Metal was down by 0.15% were the only losers on the sectoral index.

The top gainers on the Sensex were Dr Reddys up by 1.74%, Tata Power up by 1.03%, Bharti Airtel up by 1.02%, Hero MotoCorp up by 0.83% and Cipla up by 0.78%. On the flip side, M&M was down by 0.78%, SSLT was down by 0.52%, HDFC was down by 0.50%, L&T was down by 0.50% and Wipro was down by 0.46% were the top losers on the Sensex.

Meanwhile, showing an indication of economic recovery, activity in Indian services sector, which represents around 60% of Indian GDP, witnessed a solid rate of expansion in the month of June on the back of stronger new business inflows and better economic conditions. The HSBC services Purchasing Managers’ Index (PMI), based on the survey of around 350 private service sector companies, rose to 17-month high at 54.4 in June from 50.2 in May, above the crucial 50 mark for the second consecutive month that separates growth from contraction. Output expanded in four of the six monitored categories with the fastest increase witnessed in the Post & Telecommunication and Renting Business Activities sectors. Indicating further expansion in business activity overall, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, increased from 50.7 in May to 53.8 in the month of June.

The HSBC survey indicated that new orders increased for the second consecutive month to 54.3 in June driven by improved demand and the pace of new work expansion was quickest since February 2013. Further, backlogs of work at service providers were accumulated at the sharpest pace in the survey history, indicating robust demand growth and delayed payment from clients. However, the survey signaled a steady inflation reading with input costs across the sector rose in the reported month on account of high prices of fuel. The rate of cost inflation was strongest in five months but below the long-run series trend. Accordingly, services firms passed increased cost burden to consumers, suggesting consumer price inflation could rise in coming months.

Employment level in services sector increased at a marginal pace with the index measuring workforce numbers registering only fractionally above the crucial 50 threshold in June. Indian services companies also maintained their positive outlook for output growth over the next 12 months on the back of supportive factors such as planned increases in marketing budgets, forecasts of stronger demand and ongoing improvements in India’s economy. Referring to Indian economy outlook, the survey noted that faster reforms due to political stability are likely to provide impetus to Indian economy.

The CNX Nifty opened at 7,718.10; about 4 points higher as compared to its previous closing of 7,714.80, and has touched a high and a low of 7,732.65 and 7,708.90 respectively. The index is currently trading at 7,723.10, up by 8.30 points or 0.11%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Dr Reddys up by 1.64%, Asian Paints up by 1.58%, BPCL up by 1.52%, Lupin up by 1.22% and Bharti Airtel up by 1.14%. On the flip side, HDFC down by 1.01%, M&M down by 0.68%, L&T down by 0.67%, Ultratech Cement down by 0.64% and Kotak Bank down by 0.50% were the major losers on the index.

Asian markets were trading mixed; Nikkei soared 83.04 points or 0.54% to 15,431.33, Hang Seng gained 4.40 points or 0.02% to 23,535.84, Straits Times increased by 6.93 points or 0.21% to 3,280.08 and Jakarta Composite was up by 14.81 points or 0.30% to 4,903.55.

On the flip side, KOSPI Index slipped 0.27 points or 0.01% to 2,010.70, Shanghai Composite dropped by 6.77 points or 0.33% to 2,056.45, FTSE Bursa Malaysia KLCI contracted by 1.29 points or 0.07% to 1,887.40 and Taiwan Weighted was down by 4.17 points or 0.04% to 9,522.06.