Benchmarks trim gains; Nifty holds 7700 mark

Indian equity benchmarks trimmed minor gains but continued to trade in green in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on optimistic mood as investors shrugged off geopolitical tensions in Ukraine and in the Middle East. Investors also took positive signs from Finance Minister Arun Jaitley's statement, that exuded confidence of tax collection during the current fiscal would exceed budget estimate of Rs 13.64 lakh crore. Traders were seen piling up positions in Oil & Gas, TECK and IT while selling was witnessed in Capital Goods, Power and Bankex sector stocks. In scrip specific development, Hitachi Home & Life Solutions was trading in green after the consumer durable company reported over 200% jump in net profit for the quarter ended June 30, 2014. Hectic activity was witnessed in telecom stocks on taking cues from Idea Cellular’s April-June profit which beat estimates and also after the sector regulator issued guidelines for mobile phone spectrum sharing between carriers that is seen benefiting the bigger incumbents.

On the global front, the Asian markets were trading mostly in green, while the European markets too traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,700 and 25,800 levels respectively. The market breadth on BSE was negative in the ratio of 1362:1442 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 25890.08, up by 174.91 points or 0.68% after trading in a range of 25988.28 and 25780.39. There were 18 stocks advancing against 12 stocks declining on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.25%, while Small cap index was down 0.09%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.48%, TECK up by 1.07%, IT up by 0.66%, FMCG up by 0.57% and India Infrastructure Index up by 0.53%. On the flip side, Capital Goods down by 1.20%, Power down 0.98%, Bankex down by 0.32% and Realty down by 0.10% were the only losers on the indices.

The top gainers on the Sensex were Bharti Airtel up by 4.58%, Reliance Industries up by 2.99%, Hindalco up by 2.37%, HDFC up by 2.35% and Coal India up by 1.74%. On the flip side, Larsen & Toubro down by 1.41%, Maruti Suzuki down by 1.02%, ICICI Bank down by 0.76%, BHEL down by 0.70% and Tata Steel down by 0.68% were the top losers.

Meanwhile, minister of State for Steel Vishnu Deo Sai has asserted that the India will not impose restrictions on iron ore exports despite sluggish domestic production. Over the past four years, India’s iron ore production has been declining owing to the curbs on illegal mining. In the previous fiscal year, India’s iron ore production stood at 152 million tonnes, dropping India to the No.10 spot from its earlier position as the third-largest iron ore exporter.

However, the minister has cleared that iron ore output is still sufficient to meet the requirements of the domestic steelmakers. Iron ore is the main raw material for steel production. In the previous fiscal, production was 48 MT more than total consumption of 103.73 MT. Exports, however, were just 14.41 million tonnes in FY14 as a duty of 30 percent and high freight rates made Indian ore uncompetitive in global markets. Industry players such as JSW steel among other had requested the government to impose restrictions on iron ore exports.

India is world fourth largest steel maker behind China, Japan and the US with 100 mtpa steel production capacity now, up from 75 mtpa four years ago. India produced 81 million tonnes steel in the previous fiscal year. The performance of steel industry is highly correlated to overall economic growth as steel demand is derived from construction and automobile sectors. Construction sector accounts for around 60 percent of the country's total steel demand, while the automobile industry consumes 15 percent of demand. The steel industry contributes about 2 percent of the country's GDP and employs over six lakh people.

The CNX Nifty is currently trading at 7727.10, up by 42.90 points or 0.56% after trading in a range of 7756.25 and 7704.80. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.61%, Reliance Industries up by 2.98%, HDFC up by 2.51%, Hindalco up by 2.18% and Coal India up by 1.81%. On the flip side, PNB down by 1.54%, Larsen & Toubro down by 1.51%, Bank of Baroda down by 1.46%, Power Grid Corporation down by 1.24% and Maruti down by 1.14% were the top losers.

Asian markets were trading mostly in green; with FTSE Bursa Malaysia KLCI gained 0.09%; Straits Times inched higher by 0.06%; KOSPI Index advanced by 0.52%; Shanghai Composite surged 1.02%; Taiwan Weighted accumulated 0.62%; Nikkei 225 was up by 0.84%; Hang Seng spurted 1.69%.

On the flip side, Jakarta Composite down by 1.18% was the only loser.

The European markets were trading in green; Germany’s DAX was up by 0.42%, France’s CAC 40 added 0.41% while, UK’s FTSE 100 gained 0.60%.