Markets break out in green supported by rise in IT and tech stocks

Indian markets after their valiant efforts have finally broken out in green, though the earlier incidents of markets momentarily entering the green were followed with profit booking, but now in the noon session of trade some strength is being seen despite weak start of the European markets. While, the broader indices too are not out of woods, the major profit booking in the realty and the power stocks was putting pressure on the markets. On the same time the jubilant IT and tech stocks were preventing any major fall. The better than expected earnings numbers of IT bellwether TCS has led the whole IT pack higher for the day, the stock itself was up by about four percent. On the same time telcos were showing mixed response to the report that the Reserve Bank of India has proposed major reforms to boost financial inclusion, issuing draft guidelines allowing the likes of supermarkets and cellular phone companies to set up Payment Banks and permitting NBFCs and others to set up Small Banks. There was some weakness in the PSU gauges with government identifying over a dozen blue-chip public sector companies for disinvestment during the current financial year.

The BSE Sensex is currently trading at 25660.17, up by 99.01 points or 0.39% after trading in a range of 25678.77 and 25441.24. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were showing mixed trend; while the BSE Mid cap index was marginally down by 0.02%, the Small cap index was up by 0.87%.

The gaining sectoral indices on the BSE were IT up by 2.03%, TECk up by 1.49%, Capital Goods up by 0.64%, Bankex up by 0.55% and Auto was up by 0.04%, while, Power down by 1.11%, Realty down by 0.74%, Oil & Gas down by 0.60%, Consumer Durables down by 0.47%, and FMCG down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.60%, Wipro up by 2.97%, ICICI Bank up by 1.74%, Cipla up by 1.18% and Axis Bank was up by 1.15%. On the flip side, Hindalco down by 2.38%, BHEL down by 2.28%, Tata Power down by 2.07%, NTPC down by 1.43% and Maruti Suzuki down by 1.12% were the top losers.

Meanwhile, the revival in monsoon rains over the last five-six days has reduced the rainfall deficit by 8 percentage points to 35% and accelerated planting of crops which was at half of last year's level. Rainfall is expected to continue for the next 10 days which would help farmers plant more rice, oilseeds, pulses, cotton and coarse grains.  However, the late sowing may mean lower returns, particularly if rainfall is uneven in the weeks ahead. The southwest monsoon covered the entire country two days after its normal date July 15.

In current year, monsoon had been very weak till the first half of July and rain deficit had grown to 43%. However, with good rains forecast for the rest of July, the Indian Meteorological Department (IMD) expects the deficit to progressively narrow in the coming days.

Monsoon rain is crucial for India as 55% of the arable land depends entirely on rain for irrigation. Timely and normal monsoon is also vital for rabi season (winter crops) also as it raises the water table and moisture content in the soil. Though, agriculture sector accounts for only about 15% of the economy, monsoon has a wider impact because it affects millions of people in villages who depend upon agriculture. Further, a poor monsoon can impact India’s exports, stoke inflation particularly food inflation and lead to lower demand for products ranging from cars to consumer goods. In 2009, India had faced worst drought in nearly four decades that forced the country to import large amount of food commodities. 

The CNX Nifty is currently trading at 7,666.75, up by 26.30 points or 0.34% after trading in a range of 7,673.85 and 7,595.50. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were TCS up by 3.57%, Wipro up by 3.11%, HCL Tech up by 2.72%, Kotak Bank up by 2.31% and ICICI Bank was up by 1.62%. On the flip side, Hindalco down by 2.15%, Ambuja Cements down by 2.00%, BHEL down by 1.99%, BPCL down by 1.96% and Tata Power down by 1.89% were the top losers.

Asian markets were trading mixed towards the closing; Shanghai Composite was up by 3.48 points or 0.17% to 2,059.07 and Jakarta Composite gaining 16.40 points or 0.32% to 5,087.60.

On the other hand, FTSE Bursa Malaysia KLCI was down by 7.98 points or 0.42% to 1,875.16; KOSPI Index was down by 1.48 points or 0.07% to 2,019.42; Taiwan Weighted was lower by 7.27 points or 0.08% to 9,400.97; Hang Seng was lower by 124.95 points or 0.53% to 23,395.92;  Nikkei 225 plunged by 154.55 points or 1.01% to 15,215.71 and Straits Times was lower by 4.37 points or 0.13% to 3,302.52.

European markets have made a weak start; France’s CAC was down by 1.21%; UK’s FTSE 100 lower by 0.68% and Germany’s DAX down by 1.07%.