Markets continue to trade firm in afternoon session

Indian equity benchmarks continue to trade firm in afternoon session on the back of buying witnessed in consumer durables, auto and oil and gas stocks, amid hopes of encouraging IIP data for June to be released later in the day. Positive global cues due to easing geopolitical tensions coupled with positive economy related announcements has enthused the major indices to extend gains and most of the sectoral indices were trading in green. Sentiments also got a boost after OECD stated that Indian economic growth is gaining momentum as Composite leading indicators (CLIs) for India inched up to 99.2 in June from 98.9 in May. Consumer durables was top gaining index, trading up by around 1.70%. Auto stocks too were on buyer radar as auto major Tata Motors reported over 3-fold jump in consolidated net profit at Rs 5,398.21 crore for the first quarter ended June 30. Buying was broad based with both mid and small cap indices trading up by over 0.35%. However, stocks of defensive sector such as IT, teck and FMCG were marginally in red.

Eicher Motors surged around 5% to Rs 8,990 after reporting a more-than-double standalone net profit at Rs 133 crore for the quarter ended June 2014 on back of strong sales. IRB Infrastructure Developers was trading 3% higher at Rs 252 after Virendra Mhaiskar, the promoter of the company got a clean chit by the CBI on RTI activist murder. Further, shares of internet software and services provider - 8K Miles Software Services soared 13% to Rs 244 after reporting nearly three-fold jump in consolidated net profit at Rs 3.15 crore for Q1FY15.

On global front, Asian equity indices were trading mixed with Straits Times up by 0.16% and Nikkei 225 up by 0.20%. Global equities rebound amid expectations that US bombing will help push back militants in Iraq and proposed Red Cross aid mission in eastern Ukraine may help to ease tensions. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,600 and 25,500 levels respectively. The market breadth on BSE was positive, out of 2,477 stocks traded 1,398 stocks advanced, while 970 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,687.72 up by 168.48 points or 0.66% after trading in a range of 25,744.51 and 25,657.85. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index up by 0.61%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.70%, Auto up by 1.56%, Healthcare up by 1.21%, Oil and Gas up by 1.08% and Power up by 0.99%. On the flip side, Teck down by 0.43%, IT down by 0.43% and FMCG down by 0.28% were the losing indices on the BSE.

The top gainers on the Sensex were Tata Motors up by 5.83%, Gail India up by 3.99%, ONGC up by 3.03%, HDFC up by 2.39% and Tata Power up by 2.31%. On the flip side, Bharti Airtel down by 1.66%, BHEL down by 0.97%, M&M down by 0.93%, ITC down by 0.72% and TCS down by 0.56% were the top losers on the BSE. 

Meanwhile, attributing prevailing restrictions on gold imports as a major reason for rise in gold smuggling, Commerce Ministry has pitched for easing of gold import norms to increase the availability of the metal in the domestic market and boost exports.

Commerce and Industry Minister Nirmala Sitharaman said that strict norms on gold imports have been adversely impacting Indian gems and jewellery industry. Gems and jewellery exports account for about 15 percent of the country's total outbound shipments. The exports of gems and jewellery declined by 8.82% to $39.52 billion in FY14 from a year earlier due to prevailing Government’s restriction on precious metals imports.  By adding further, Commerce Minister said that gold import restrictions have also increased the gold smuggling cases in the country. During 2013-14, cases of gold smuggling had gone up to 2,441 as compared to 869 and 500 in 2012-13 and 2011-12 respectively.  

Gold is the second largest import item for India after crude oil and is mainly utilised to meet the demand of jewellery industry. The government had taken various measures like high customs duty of 10% and 80/20 rule to curb gold shipments to check country’s widening current account deficit (CAD). Under the 80/20 scheme, which was introduced in August last year, nominated agencies could import gold on condition that 20 percent of the shipment has to be exported and the remainder can be kept for domestic use. The export of gems and gewellary has been declining since October 2013. Meanwhile, India’s low gold import too has helped to contain the current account deficit (CAD) at $32.4 billion (1.7% of GDP) in FY14 as compared to $87.8 billion (4.7% of GDP) in FY13.

The CNX Nifty is currently trading at 7,669.40 up by 43.45 points or 0.57% after trading in a range of 7,691.45 and 7,657.50. There were 32 stocks advancing against 18 declining on the index.

The top gainers of the Nifty were Tata Motors up by 5.88%, Gail up by 3.89%, ONGC up by 2.88%, NTPC up by 2.25% and Sun Pharma up by 2.16%. On the flip side, Bharti Airtel down by 1.81%, M&M down by 0.96%, BHEL down by 0.77%, ITC down by 0.70% and HCL Tech down by 0.49% were the major losers on the index.

Asian equity indices were trading mixed; Jakarta Stock Price Index up by 0.39% to 5,133.34, Straits Times Index up by 0.16% to 3,311.88 and Nikkei 225 up by 0.20% to 15,160.10. While, Taiwan Weighted down by 0.11% to 9,163.12, Hang Seng down by 0.19% to 24,599.60 and Shanghai Composite down by 0.34% to 2,217.09