Benchmarks add gains; IT, TECK leads

Indian equity benchmarks added gains to continue their firm trade in the late afternoon session on account of buying in frontline counters. The sentiments were in optimistic mood after reports suggested that overseas investors pumped in a staggering $20.4 billion into the Indian market in the first half of the year. Investors however maintained a cautious approach amid host of important triggers, including the Union Budget for 2014-15 schedule on July 10, 2014 and industrial production data. Railway Minister Sadananda Gowda will present the Rail Budget for 2014-15 on July 08, 2014. The week also marks the beginning of the Q1 June quarter corporate earnings season, with Infosys announcing its result on July 11. Traders were seen piling up positions in IT, TECK and India Infrastructure Index while selling was witnessed in Bankex, Oil & Gas and PSU sector stocks. Hectic activity was witnessed in IT stocks as the rupee edged lower against the dollar. In scrip specific development, IDFC was trading in green after foreign brokerage firm upgraded the stock to overweight from underweight and raised the target price.

On the global front, the Asian markets were trading mostly in green, while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,750 and 26,000 levels respectively. The market breadth on BSE was positive in the ratio of 1628:1328 while 94 scrips remained unchanged.

The BSE Sensex is currently trading at 26063.52, up by 101.46 points or 0.39% after trading in a range of 26116.73 and 25992.73. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index up by 0.77%.

The gaining sectoral indices on the BSE were IT up by 2.65%, TECK up by 2.16%, India Infrastructure Index up by 1.34%, Power up by 0.88% and Auto up by 0.59% while, Bankex down by 0.89%, Oil & Gas down by 0.81%, PSU down by 0.24%, FMCG down by 0.07% and Consumer Durables down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 3.82%, Infosys up by 3.57%, TCS up by 2.76%, Dr. Reddy’s Lab up by 2.26% and Tata Motors up by 1.93%. On the flip side, HDFC Bank down by 1.49%, ONGC down by 1.16%, GAIL India down by 0.87%, ICICI Bank down by 0.76% and Reliance Industries down by 0.60% were the top losers.

Meanwhile, Home Ministry has raised objections in allowing Foreign Direct Investment (FDI) in highly- sensitive areas of the Railways sector, citing that such a move may compromise security of the country's largest transportation network. The red flag was raised by the home ministry after Commerce and Industry Ministry circulated a draft cabinet note for inter-ministerial consultations proposing 100% FDI in areas such as high-speed train systems and dedicated freight lines.

The proposal of allowing 100% FDI in Railways sector was originally mooted by Department of Industrial Policy and Promotion (DIPP) under the Commerce and Industry Ministry, which believed that such a move would definitely help the cash starved railways sector to grow.

According to Commerce Ministry, Railways sector is an imperative sector for driving India’s economic growth and has potential of lifting the GDP by over a percent. But, as per Home Ministry, FDI should not be allowed in highly sensitive parts of the railways as managing passengers and freight traffic and operations of trains is considered to be the most sensitive parts of the Indian Railways and by allowing FDI the country will be comprising on the security of its largest transportation network.

NDA’s maiden Rail Budget to be presented on July 8 will aim at a complete revamp and to improve the health of the cash-strapped Indian Railways, the largest mode of mass transport in the country. After the bitter pill of 14.2 per cent increase in the passenger fair last month, the budget is expected to focus on innovation, modernization, efficiency, punctuality, cleanliness, increased role of private sector and services features. The CNX Nifty is currently trading at 7780.90, up by 29.30 points or 0.38% after trading in a range of 7791.40 and 7755.10. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were IDFC up by 7.20%, Tata Power up by 3.97%, Infosys up by 3.46%, TCS up 2.98% and DLF up by 2.31%. On the flip side, United Spirits down by 1.44%, Ultratech Cement down by 1.43%, HDFC Bank down by 1.37%, Kotak Mahindra Bank down by 1.27% and ONGC down by 1.16% were the top losers.

Most of the Asian equity indices were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.45%, Straits Times increased 0.47%, Taiwan Weighted increased 0.11%, Shanghai Composite added 0.03% and Jakarta Composite jumped 1.40%.

On the flip side, Nikkei 225 decreased 0.37%, Hang Seng inched lower by 0.02% and KOSPI Index decreased by 0.23%.

The European markets were trading in red; Germany’s DAX lost 0.19%, UK’s FTSE 100 was down by 0.18% while, France’s CAC 40 dropped 0.31%.