Benchmarks witness some recovery from day’s low

Some recovery has emerged at Dalal Street after benchmarks faltered in a knee-jerk reaction to Modi’s government’s maiden budget, which though retaining FY15 fiscal deficit target of 4.1%, just hoped that there could be solution worked out for ‘GST issue’ this year. Sense of comfort crept in after Union budget underscored the need to review Direct Tax Code (DTC). Off days low, both Sensex and Nifty were trading below the psychologically crucial 25,400 and 7,550 levels respectively, with losses in the range of 0.25%-0.50%. Meanwhile, broader indices also witnessing drubbing, were down over 0.50%

In budget impacted stock activities, Textile companies witnessed buying interest after Finance Minister allocated Rs 200 crore for 6 more textile clusters in Rae Bareily, Lucknow,Surat, Bhagalpur, while PSU Bank stocks, PNB,  also gathered steam after government underscored that it would examine proposal to give additional autonomy to banks.  FM also announced need of over Rs 2 lakh crore to fund PSU banks. Additionally, Real Estate companies also surged after government accorded pass through status for REITs. The overall market breadth on BSE was in the favour of declines, which were outpacing advances in the ratio of 1712:826; while 88 shares remained unchanged.

The BSE Sensex is currently trading at 25377.94, down by 66.87 points or 0.26% after trading in a range of 25117.00 and 25613.72. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.50%, while Small cap index was down by 0.67%.

The gaining sectoral indices on the BSE were Realty up by 1.03%, IT up by 0.58%, TECK up by 0.14% while, Consumer Durables down by 1.24%, Auto down by 0.81%, Bankex down by 0.81%, Oil & Gas down by 0.58%, PSU down by 0.53% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.66%, Wipro up by 1.20%, Hindalco up by 0.88%, Tata Power up by 0.88% and Sun Pharma Inds. up by 0.80%. On the flip side, Bharti Airtel down by 3.01%, SBI down by 1.94%, Sesa Sterlite down by 1.61%, Hero MotoCorp down by 1.40% and BHEL down by 1.38% were the top losers.

Meanwhile, concerned over the rising food inflation in the country, Food Minister Ram Vilas Paswan has asserted that the government will control price rise despite below normal monsoon. Food Minister has said that there is no shortage of supplies and the government has already initiated measures to deal with hoarders and black-marketers. To restrain rising food inflation in the country, the government has recently taken measures such as de-listing of fruits and vegetables from Agricultural Produce Marketing Committee Act, bringing onion and potato under the Essential Commodities Act, fixing minimum export price of $500 per tonne and $450 per tonne on export of onion and potato respectively. Further, an additional 50 lakh tonnes of rice has been allocated for distribution towards Below Poverty Line (BPL).

Food inflation can increase in near term as weak monsoon rains would impact the performance of Indian agriculture sector. The Indian Meteorological Department (IMD) had highlighted that southwest monsoon may remain below normal with the country likely to receive 93 percent of the long-period average (LPA) rainfall. Till June 17, the country has received 45 percent less rainfall in the first spell. WPI inflation rose to five month high at 6.01% y-o-y in the month of May as against 5.20% in April. Inflation in food articles increased by 9.50% y-o-y in May as compared to 8.64% in April.     

The CNX Nifty is currently trading at 7546.65, down by 38.35 points or 0.51% after trading in a range of 7479.05 and 7626.85. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were IDFC up by 4.41%, DLF up by 1.96%, Infosys up by 1.59%, Hindalco up by 1.14% and Lupin up by 1.03%. On the flip side, Bharti Airtel down by 3.31%, BPCL down by 2.87%, NMDC down by 2.74%, SBI down by 2.10% and Power Grid Corpn. down by 2.06% were the top losers.

Asian markets were trading mixed; KOSPI Index rose by 2.34 points or 0.12% to 2,002.84, Straits Times added 9.61 points or 0.29% to 3,285.07, Taiwan Weighted advanced 75.14 points or 0.79% to 9,565.12.Hang Seng gained 77.73 points or 0.34% to 23,253.80 and Jakarta Composite increased 94.32 points or 1.88% to 5,119.04.On the flip side, Nikkei 225 slid by 86.18 points or 0.56% to 15,216.47, FTSE Bursa Malaysia KLCI lost 0.03% to 1,890.66 and Shanghai Composite was trading flat at 2,038.58

European markets got off to a negative start with Germany’s DAX declining by 0.09%,UK’s FTSE 100 slipping 0.10% and France’s CAC giving up 0.07%.