Benchmarks continue to trade in red in morning session

Indian bourses continued to trade in red in late morning session as investors booked profits in recent outperformers, mainly capital goods, oil and gas and power sector stocks. Besides, some traders turned cautious as benchmarks rose for seven straight days through yesterday, the longest run since September 2012. However, losses remained capped as some support came in from positive comments of World Bank chief, who has  expressed confidence that with the Narendra Modi-led Government at the Centre, India’s ranking in ‘Doing Business’ can improve significantly. The Bank also said it would lend $15-18 billion over the next three years. Traders were seen piling up positions in Metal, FMCG and PSU while selling was witnessed in Oil & Gas, Capital Goods and Auto sector stocks.

In scrip specific development, Panacea Biotech has surged as much as 15% after the company announced fund raising plans of upto Rs 250 crore. On the other hand, shares of Ipca Laboratories have dipped after the company has received certain inspection observations from the US Food and Drug Administration (FDA) over manufacturing at its Ratlam plant in Madhya Pradesh. Besides, shares of Cairn India came under pressure after reporting a sharp 65% year on year fall in its consolidated net profit for the April-June 2014 quarter at Rs 1,093 crore.

On global front, Asian stock markets rose for a fourth day, with the regional benchmark index extending a six-year high, after a Chinese manufacturing gauge rose to its strongest reading in 18 months. Back home, ACC, Ambuja Cements, Bayer CropScience, Biocon, Century Textiles and Industries, GIC Housing Finance, Glenmark Pharmaceuticals, Jindal Saw, Mahindra and Mahindra Financial Services, Pfizer, SKS Microfinance, TVS Motor will be in focus on account of June quarter earnings later in the day. Meanwhile, the market breadth on BSE was positive, out of 2244 stocks traded, 1146 stocks advanced, while 1008 stocks declined on the BSE.

The BSE Sensex is currently trading at 26111.67 down by 35.66 points or 0.14% after trading in a range of 26190.81 and 26077.70. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.04%, while Small cap index up by 0.27%.

The gaining sectoral indices on the BSE were Metal up by 0.98%, FMCG up by 0.35%, PSU up by 0.33%, Realty up by 0.20% and Bankex up by 0.11%. While, Oil & Gas down by 0.66%, Capital Goods down by 0.40%, Auto down by 0.39%, Consumer Durables down by 0.31 and Healthcare down by 0.22% were the losing indices on BSE.  

The top gainers on the Sensex were Tata Steel up by 1.78%, Hindalco up by 1.53%, Hindustan Unilever up by 1.19%, BHEL up by 0.70% and Tata Power up by 0.68%. On the flip side, Gail India was down by 1.68%, Dr Reddys Lab was down by 0.98%, Bajaj Auto was down by 0.75%, L&T was down by 0.72% and Tata Motors was down by 0.63% were the top losers on the Sensex.

Meanwhile, the World Bank Group has committed a $15-18 billion loan to India over the next three years to boost India’s economic growth. After a meeting with Prime Minister Narendra Modi and Finance Minister Arun Jaitley, World Bank Group President Jim Yong Kim has asserted that new government is committed for introducing key reforms which are critical to bring back India’s economic growth to 9 percent and the World Bank fully supports this growth.

By adding further, World Bank President said that this financial support will help the country to build more quality infrastructure, expand financial access and reduce poverty more quickly and share prosperity among the people. India is the biggest client for the World Bank Group and has received $5.2 billion loan in the previous fiscal year. During the past three years, India had received about $9.8 billion loan from the World Bank Group.

After growing at around 9 percent growth rate during FY07-FY11, Indian economic growth slowed down to 6.7 percent during FY12 and below 5 percent during FY13 and FY14. The factors like high interest rates, low investments and slow execution of infrastructure projects have been impacting economy’s growth. The government expects Indian economic growth to recover at 5.5-6 percent in FY15.

The CNX Nifty is currently trading at 7,788.90 down by 6.85 points or 0.09% after trading in a range of 7,802.45 and 7,771.65. There were 23 stocks advancing against 17 declining on the index.

The top gainers of the Nifty were Bank of Baroda up by 2.44%, Tata Steel up by 2.11%, Tech Mahindra up by 1.85%, Jindal Steel up by 1.71% and HCL Tech up by 1.48%. On the flip side, Cairn down by 4.88%, Gail down by 1.53%, Grasim down by 1.04%, Dr. Reddy's Laboratories down by 0.95% and Tata Motors down by 0.76% were the major losers on the index.

Asian markets were trading mostly in the green; Hang Seng spurted by 0.41%, Straits Times gained 0.16%, Jakarta Composite increased by 0.19%, Shanghai Composite soared 1.45% and FTSE Bursa Malaysia KLCI was up by 0.03%. On the flip side, Nikkei 225 tumbled by 0.45%, KOSPI Index declined 0.20% and Taiwan Weighted was down by 0.03%.