Benchmarks continue to trade in green in late morning session

After getting a gap-up start, benchmark equity indices continued to trade in fine fettle in late morning deals on sustained buying activities by both funds and retail investors after market regulator SEBI approved new norms for setting up and listing of Real Estate and Infrastructure Investment Trusts. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Some support also came in after Confederation of Indian Industry (CII) said that green shoots have started to appear in the manufacturing sector, with a majority of segments likely to post higher output. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 503.74 crore on August 08, 2014. At present, Sensex and Nifty were trading above the crucial 25,450 and 7,600 levels respectively, with gains of over 0.55%. Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 0.90%.

Barring FMCG, all other BSE sectoral indices were trading in the green. Among them, realty and auto indices gained 2.46 per cent and 1.90 per cent, respectively. Only FMCG index was down 0.30 per cent. In scrip specific development, shares of IDBI Bank have dipped as much as 5% on reports that the Central Bureau of Investigation (CBI) began probing loans by state-owned bank to Kingfisher Airlines that went bad. On the flip side, shares of Adani Enterprises have rallied as much as 5% after reporting a consolidated net profit at Rs 557 crore for the quarter ended June 30, 2014 (Q1FY15), on back of higher sales volume in power business.

On global front, Asian markets rose after Wall Street rallied on an easing of tensions in Ukraine, although conflicts in other geopolitical hotspots such as Iraq limited gains. Back home, the rupee strengthened by 13 paise to 61.02 against the dollar in early trade at the Interbank Foreign Exchange market on increased selling of the American currency by exporters and banks. The market breadth on BSE was positive, out of 2179 stocks traded, 1461 stocks advanced, while 645 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25490.85 up by 161.71 points or 0.64% after trading in a range of 25550.72 and 25456.75. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.91%, while Small cap index gained 1.17%.

The top gaining sectoral indices on the BSE were Realty up by 2.46%, Auto up by 1.90%, Capital Goods up by 1.23%, Infrastructure up by 0.92% and Metal up by 0.70%, while FMCG was down by 0.30% were the lone loser on the sectoral index.

The top gainers on the Sensex were M&M up by 4.27%, Tata Motors up by 2.75%, Infosys up by 1.58%, Hindalco up by 1.47% and L&T up by 1.40%. On the flip side, Dr Reddys was down by 0.95%, Tata Steel was down by 0.47%, Wipro was down by 0.42%, Bajaj Auto was down by 0.39% and Hindustan Unilever was down by 0.36% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) has kicked off discussions with the government on a proposed monetary policy framework that is anchored on Consumer Price Inflation (CPI) and will target a particular level of inflation. Though, the preliminary discussions have begun by both the parties, but the monetary policy framework would be deliberated over the course of the year and the framework will be developed along with the finance ministry.

This development is much in line with government’s endorsement for the need of better monetary policy framework in the budget speech by Finance Minister, Arun Jaitley. Also, this synergy would make it easier for RBI, the inflation fighting machine, to achieve its target of bring down the retail inflation to 8% by January 2015 and 6% by January, 2016.

However, Finance Minister Arun Jaitley, who attended the board meeting, underscored the central bank would take a final call on its 6% inflation target by March 2016. Meeting this ambitious target by RBI would not be an easy task, in the backdrop of country facing a partial drought in some regions and its dependency on costly oil imports. Consumer price inflation spiked to 11.2% last November before three interest rate hikes ordered by Rajan helped bring inflation down to 7.3% in June.

The CNX Nifty is currently trading at 7,613.00 up by 44.45 points or 0.59% after trading in a range of 7,633.55 and 7,599.75. There were 39 stocks advancing against 11 declining on the index.

The top gainers of the Nifty were M&M up by 4.24%, DLF up by 3.19%, Tata Motors up by 2.75%, IDFC up by 2.46% and UltraTech Cement up by 2.40%. On the flip side, HCL Tech down by 1.46%, Dr Reddys down by 1.02%, Power Grid down by 0.95%, MCDOWELL-N down by 0.94% and Wipro down by 0.52% were the major losers on the index.

Asian markets were trading in the green; Nikkei 225 soared 2.25%, Hang Seng increased by 1.19%, KOSPI Index gained 0.53%, Straits Times spurted by 0.78%, Jakarta Composite rose 0.79%, Shanghai Composite improved 1.29%, FTSE Bursa Malaysia KLCI surged by 0.35% and Taiwan Weighted was up by 1.06%.