Benchmarks trim losses; trade continues in green

Indian equity benchmarks trimmed losses and started trading firm in the late afternoon session on account of buying in frontline blue chip counters. Investors have started eyeing the conclusion of the Fed’s two-day policy meeting and its policy statement. Traders were seen piling up positions in India Infrastructure Index, Bankex and Consumer Durables while selling was witnessed in Capital Goods, Metal and IT sector stocks. In scrip specific development, Larsen & Toubro was trading weak after foreign brokerage firm downgraded the stock to neutral from buy, citing rich valuations and adding that Q1 raises multiple red flags, including lower-than-expected standalone sales and margin details. The market may remain volatile in the near future as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. July 2014 series to next month i.e. August 2014 series. The near-month July 2014 F&O contracts will expire tomorrow i.e. July 31, 2014.

On the global front, the Asian markets were trading mostly in green, while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,750 and 26,000 levels respectively. The market breadth on BSE was negative in the ratio of 1072:1617 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 26006.68, up by 15.45 points or 0.06% after trading in a range of 26022.62 and 25850.04. There were 16 stocks advancing against 14 stocks declining on the index. The broader indices were trading mixed; the BSE Mid cap index was up by 0.01%, while Small cap index was down by 0.39%.

The gaining sectoral indices on the BSE were India Infrastructure Index up 1.30%, Bankex up by 1.17%, Consumer Durables up by 1.14%, HealthCare up 1.14% and Realty up by 0.54% while, Capital Goods down by 4.62%, Metal down by 0.40% and IT down by 0.34% were the only losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 5.01%, ICICI Bank up by 2.72%, Dr. Reddy’s Lab up 2.30%, Gail India up by 2.08% and HUL up by 1.76%. On the flip side, Larsen & Toubro down by 6.86%, SSLT down by 2.17%, Tata Power down by 1.83%, Tata Motors down by 1.40% and Tata Steel down by 1.04% were the top losers.

Meanwhile, according to Indian Meteorological Department (IMD), the monsoon in the country is likely to remain strong till August 15. IMD has forecasted heavy rainfall in many parts of the country except northwest India in the next 48 hours.

Agriculture ministry also stated that the increase in rainfall from the second half of July has helped farmer's plant crops and till now no state government had approached the ministry for drought relief.

The southwest monsoon covered the entire country two days after its normal date July 15. However, some of the states have not received enough rainfall. So far, southern and eastern parts of the country recorded rainfall deficit at 19% to 24%. In Punjab, Haryana, Chandigarh and Delhi, the rainfall deficit was more than 50%, while in western Uttar Pradesh the seasonal deficit was 49%.

Monsoon rain is vital for India as 55% of the agriculture 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.

The CNX Nifty is currently trading at 7758.70, up by 10.00 points or 0.13% after trading in a range of 7758.90 and 7707.60. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 5.01%, Lupin up by 4.66%, ICICI Bank up by 2.94%, DLF up 2.68% and Dr. Reddy’s Lab up by 2.15%. On the flip side, Larsen & Toubro down by 6.76%, Tata Power down by 2.02%, SSLT down by 1.93%, Jindal Steel down by 1.84% and Tech Mahindra down by 1.78% were the top losers.

Asian markets were mostly trading in green; with FTSE Bursa Malaysia KLCI gaining by 0.08%; KOSPI Index advancing 1.00%; Nikkei 225 rising by 0.18%; Taiwan Weighted adding 0.59%; Hang Seng rallying 0.37%.

On the flip side, Straits Times lost 0.09% and Shanghai Composite was down by 0.09% were the losers in the Asian pack. Jakarta Stock Exchange was closed today on account of ‘National Leave’ holiday.

The European markets were trading in red; France’s CAC 40 lost 0.45%, UK’s FTSE 100 was down by 0.14% while, Germany’s DAX dropped by 0.06%.