Benchmarks trade flat with negative bias

Indian equity benchmarks are trading slightly in the red in early deals on Monday as investors opted to stay away from buying risky assets ahead of July F&O expiry this week. However, losses remained capped as traders getting some support from International Monetary Fund’s (IMF) statement that growth appears to have bottomed out in India and activity is projected to pick up gradually after the post-election recovery in business sentiment, neutralising the effect of weak monsoon on agriculture. Also, there are reports that armed with budget proposals to bring down the fiscal deficit, the Finance Ministry will pitch for a ratings upgrade at a series of meetings with the global agencies in the coming 2-3 months.

On the global front, the US markets made a soft closing on last trading session after getting some weak earnings, while geopolitical concerns also continued to weigh on the markets amid ongoing conflicts in Ukraine and Gaza. However, the Asian markets were trading mostly in the green terrain at this point of time on getting good economic data from China, as profits at industrial companies in Asia’s largest economy increased by 17.9 percent in June from a year earlier.

Back home, on the sectoral front, consumer durables, auto and power witnessed the maximum gain in trade, while realty, fast moving consumer goods and healthcare remained the top losers on the BSE sectoral space. The broader indices, however, were trading slightly in the green, while the market breadth on the BSE was positive; there were 938 shares on the gaining side against 818 shares on the losing side while 77 shares remain unchanged.

The BSE Sensex opened at 26173.47; around 47 point lower compared to its previous closing of 26126.75, and has touched a high and a low of 26181.83 and 26072.22 respectively. The index is currently trading at 26111.53, down by 15.22 points or 0.06%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a positive start with 51.17% stocks advancing against 44.63% declines. The broader indices were trading in the red; the BSE Mid cap index was up by 0.21%, while Small cap index was up by 0.03%. 

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.79%, Auto up by 0.76%, Power up by 0.47%, Capital Goods up by 0.44% and Infrastructure up by 0.37%, while Realty down by 0.92%, FMCG down by 0.35%, Healthcare down by 0.27%, Oil and Gas down by 0.11% and Metal down by 0.09%, were the major losers on the sectoral index.

The top gainers on the Sensex were Axis Bank up by 1.69%, Tata Motors up by 1.41%, BHEL up by 1.26%, M&M up by 1.26% and SBI up by 0.79%. On the flip side, Coal India was down by 1.79%, HDFC was down by 1.28%, TCS was down by 1.07%, Bharti Airtel was down by 0.73% and Bajaj Auto was down by 0.69% were the top losers on the Sensex.

Meanwhile, Optimistic over the fundamentals of Indian economy, the International Monetary Fund (IMF) has retained its growth forecast at 5.4 percent in 2015 and a stronger 6.4 percent growth next year. Among the BRICS nations, India is the only emerging economy to escape a cut in growth forecast in the IMF’s update of its World Economic Outlook.

The IMF stated that growth has bottomed out in India and activity is projected to pick up gradually after the post-election recovery in business sentiment, offsetting the effect of an unfavourable monsoon on agricultural growth. After growing at around 9 percent during FY07-FY11, Indian economic growth slowed down to 6.7 percent during FY12 and below 5 percent during FY13 and FY14.

On global front, IMF has stated that weaker growth in the US, China and several important emerging markets forced the Fund to downgrade global economy growth forecast to 3.4 percent from 3.7 projected earlier. It added that global growth could be weaker for longer, given the lack of robust momentum in advanced economies despite very low interest rates and the easing of other brakes to the recovery. The IMF expects China to grow at 7.4 percent this year, 0.2 percentage point lower than its previous forecast. Russian economy is expected to grow by only 0.2 percent this year, down from its previous forecast of 1.3 percent as escalating sanctions against Russia for its actions in Ukraine sparked capital flight out of the country, exacerbating a fall in investment levels. The fund also cut growth expectations for Brazil and Mexico by more than half a percentage point for the year as weaker US growth and timid investment weigh on growth.

Meanwhile, the IMF suggested that the governments in both advanced and emerging-market economies must take structural reforms to close infrastructure gaps, strengthen productivity and lift potential growth rate.

The CNX Nifty opened at 7,792.90; about 2 point lower as compared to its previous closing of 7,790.45, and has touched a high and a low of 7,799.90 and 7,774.35 respectively. The index is currently trading at 7,790.00, down by 0.45points or 0.01%. There were 27 stocks advancing against 23 declines on the index.

The top gainers of the Nifty were PNB up by 2.50%, Cairn up by 2.30%, Tata Motors up by 1.65%, Bank of Baroda up by 1.58% and IDFC up by 1.48%. On the flip side, Coal India down by 1.99%, Ambuja Cement down by 1.96%, HDFC down by 1.56%, Kotak Bank down by 1.32% and Lupin down by 1.01% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 soared 56.10 points or 0.36% to 15,513.97, Hang Seng increased by 221.53 points or 0.91% to 24,437.54, KOSPI Index strengthened by 14.72 points or 0.72% to 2,048.57 and Shanghai Composite was up by 44.07 points or 2.07% to 2,170.69.

On the flip side, Taiwan Weighted was down by 24.66 points or 0.26% to 9,414.63. Malaysia, Singapore and Indonesia markets remained shut for the trade today for Eid-il-Fitri Holiday.