Benchmarks continue to hold their head above water

After positive opening, benchmarks continued to hold their head above water in late morning session as funds and retail investors made selective buying ahead of the TCS and Bajaj Auto quarterly earnings. Sentiment on the street also got some support from the report that the southwest monsoon has started showing strong signs of revival in the critical western, central and northern parts of the country since Tuesday. The weatherman said if the momentum generated by these showers is maintained in August, the drought fears will subside. However, a weakening trend on the other Asian markets limited the gains on the domestic markets. Stocks from Consumer Durables, Power and Metal counters were supporting the markets’ uptrend, while those from Auto, Oil & Gas and Bankex counters were adding to the underlying cautious undertone.

In scrip specific development, Crompton Greaves has surged after the company’s board proposed to demerge its consumer products business unit into a separate listed entity. Further, shares of Adani Ports & SEZ hit record high as the company obtained environment and coastal regulation zone nod for Mundra SEZ, removing a major overhang. On the other hand, shares of Mahindra and Mahindra have dipped almost 5% after a huge block deal executed on the Bombay Stock Exchange.

On the global front, Asian stocks edged lower, reversing initial gains triggered by overnight up move in US stocks. US stocks had ended higher, with the Dow Jones industrial average closing at a record high, supported by merger news involving an offer by Twenty-First Century Fox Inc to buy Time Warner Inc and strong earnings from blue chips such as Intel Corp.  Back home, Agro Tech Foods, Bajaj Auto, Bajaj Holdings and Investment, Bharti Infratel, Cyient, GRUH Finance, Mindtree, Rallis India, Reliance Industrial Infrastructure, Vakrangee will be in focus on account of June quarter earnings later in the day. Meanwhile, the market breadth on BSE was positive, out of 2217 stocks traded, 1420 stocks advanced, while 708 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25590.34 up by 40.62 points or 0.16% after trading in a range of 25610.47 and 25520.61. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.94%, while Small cap index gained 1.10%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.41%, Power up by 1.40%, Metal up by 1.18%, IT up by 0.91% and Capital Goods up by 0.90%, while Auto down by 0.35%, Oil and Gas down by 0.21% and Bankex was down by 0.06% were the few losers on the sectoral index.

The top gainers on the Sensex were Coal India up by 1.88%, Cipla up by 1.68%, Infosys up by 1.57%, BHEL up by 1.46% and Hindalco up by 1.32%. On the flip side, M&M was down by 2.66%, ONGC was down by 1.74%, Maruti Suzuki was down by 1.11%, SBI was down by 0.78% and Dr Reddys was down by 0.61% were the top losers on the Sensex.

Meanwhile, the government has reduced the import tariff value on gold to $425 per 10 grams due to falling international prices. However, the tariff value on silver was raised to $690 per kg. As on June 30, the tariff value on imported gold stood at $428 per 10 grams, while that of silver stood at $688 per kg. Nevertheless, revising import tariff rates, base price at which customs duty is determined to prevent under-invoicing, is a practice undertaken by the government every fortnight, taking into account the volatility in global prices.

Previously, the government on June 30 hiked the import tariff value on gold and silver to $428 per 10 grams and $688 per kg, respectively, as global prices rose on safe-haven buying in the wake of geo-political tensions. Global gold prices had firmed up in June due to the escalating violence in Iraq and Ukraine that has bolstered demand for the precious metal.

Gold is the second largest import item for India after petroleum. Due to several curbs, the country's total gold and silver imports dropped 40% to $ 33.46 billion in 2013-14, against $55.79 billion in the previous year. These curbs include raising the import duty on the metal to 10 per cent and also making it mandatory for traders to export 20 per cent of the imported gold. However, after declining for seven months in a row, gold imports grew by 65.13% to $3.12 billion in June.

The CNX Nifty is currently trading at 7,640.30 up by 15.90 points or 0.21% after trading in a range of 7,643.60 and 7,612.70. There were 36 stocks advancing against 14 declining on the index.

The top gainers of the Nifty were Grasim up by 2.20%, Lupin up by 2.03%, Coal India up by 1.94%, Cipla up by 1.74% and Infosys up by 1.66%. On the flip side, M&M down by 2.43%, ONGC down by 1.77%, IDFC down by 1.29%, BPCL down by 1.13% and Maruti Suzuki down by 0.94% were the major losers on the index.

Asian markets were trading mostly in the red; Hang Seng dropped 0.23%, Straits Times slipped by 0.09%, Jakarta Composite declined 0.32%, Shanghai Composite tumbled by 0.82%, FTSE Bursa Malaysia KLCI dipped 0.14%, Nikkei 225 down by 0.12%  and Taiwan Weighted was down by 1.05%.  On the flip side, KOSPI Index was up by 0.29%.