Benchmarks pare initial gains to trade flat

Indian equity benchmarks, despite a positive opening, are trading flat in morning deals weighed down by profit booking at higher levels and selling pressure in financials and metal shares. Earlier, Infosys cheered investors by posting earnings for April-June 2014 on expected lines, and throwing up a positive surprise on the margins and volumes growth front. India’s second largest information technology (IT) services company posted a 21.6% year-on-year growth in net profit at Rs 2,886 crore, and a 13.3% year-on-year growth in revenues at Rs 12,770 crore.

However, investors booked initial gains at higher levels amid sluggish global cues with the US markets despite late hour recovery ending lower in last session, the weakness in the markets was on renewed concerns about the financial situation in Europe. Concerns about the prospect of the Federal Reserve raising interest rate sooner than anticipated also weighed on the markets. The Asian markets were trading mostly in the red at this point of time. Japanese market was once again in red as the yen maintained gains against dollar.

Back home, on the sectoral front, realty, software and technology witnessed the maximum gains in trade, while metal, public sector undertaking and oil and gas remained the top losers on the BSE sectoral space. The broader indices were trading in the green in morning deals, while the market breadth on the BSE was positive; there were 902 shares on the gaining side against 778 shares on the losing side while 60 shares remain unchanged.

The BSE Sensex opened at 25488.86; around 118 point higher compared to its previous closing of 25372.75, and has touched a high and a low of 25548.33 and 25304.38 respectively. The index is currently trading at 25340.11, down by 32.64 points or 0.13%. There were 12 stocks advancing against 18 declines on the index.

The overall market breadth has made a positive start with 51.84% stocks advancing against 44.71% declines. The broader indices were trading in the green; the BSE Mid cap and Small cap indices up by 0.09% and 0.33% respectively. 

The top gaining sectoral indices on the BSE were, Realty up by 1.30%, IT up by 1.20%, TECk up by 0.94%, Consumer Durables up by 0.49% and FMCG up by 0.44%, while Metal down by 1.00%, PSU down by 0.90%, Oil and Gas down by 0.84%, Bankex down by 0.46% and Capital Goods was down by 0.38% were the top losers on the sectoral index.

The top gainers on the Sensex were TCS up by 1.28%, Infosys up by 1.13%, Wipro up by 0.84%, Tata Motors up by 0.70% and Hero MotoCorp up by 0.68%. On the flip side, GAIL was down by 1.92%, HDFC was down by 1.38%, SBI was down by 1.20%, ONGC was down by 1.18% and M&M was down by 1.18% were the top losers on the Sensex.

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 opened at 7,584.10; about 17 points higher as compared to its previous closing of 7,567.75, and has touched a high and a low of 7,625.85 and 7,549.05 respectively. The index is currently trading at 7,568.90, up by 1.15 points or 0.02%. There were 22 stocks advancing against 28 declines on the index.

The top gainers of the Nifty were Tech Mahindra up by 1.62%, HCL Tech up by 1.20%, TCS up by 1.18%, IDFC up by 1.15% and Infosys up by 1.13%. On the flip side, NMDC down by 1.68%, GAIL down by 1.27%, M&M down by 1.24%, HDFC down by 1.23% and Jindal Steel down by 1.21% were the major losers on the index.

Asian markets were trading mostly in the red; Nikkei 225 tumbled by 88.51 points or 0.58% to 15,127.96, Hang Seng slipped 8.36 points or 0.04% to 23,230.63, KOSPI Index declined by 14.31 points or 0.71% to 1,988.53, Jakarta Composite dropped 72.21 points or 1.42% to 5,025.80, FTSE Bursa Malaysia KLCI contracted by 5.85 points or 0.31% to 1,886.77 and Taiwan Weighted was down by 50.57 points or 0.53% to 9,514.55.

On the flip side, Straits Times rose 13.74 points or 0.42% to 3,283.24 and Shanghai Composite was up by 7.06 points or 0.35% to 2,045.40.