Markets continue to trade in upbeat mood; Nifty holds above 7,650 level

Sustaining its uptrend, local barometer gauges were trading upbeat with gains of over half a percent, with both Sensex and Nifty trading above the psychologically crucial 25,600 and 7,650 levels respectively. Sustained buying activities by funds and retail investors for second consecutive session ahead of crucial macro-economic data were supporting the uptrend of local equity markets. On the macro-front, retail inflation is expected to marginally rise to 7.40% from 7.31% in June, while factory output in June is expected to rise 5.4% from a year earlier, faster than the 4.7% growth in May.

Going further in the day, gains of local equity markets could be tempered on account of negative start of European counterparts. European stocks inched lower on Tuesday, halting the previous session's sharp rebound as investors awaited Germany's ZEW survey on economic sentiment, seeking insight on the outlook for Europe's biggest economy and the potential impact from the crisis in Ukraine. Meanwhile, Asian pacific shares, giving up some early gains, were set for mix close.

Back home, while most of the sectoral indices on BSE were holding into positive territory, stocks from Teck, Information Technology and Fast Moving Consumer Goods were the weak links of trade. On the flip side, among all the gainers, stocks from Auto, Consumer Durables and Public Sector Undertaking counters were outperformers. Auto stocks were in demand for yet another session after Eicher Motors rallied around 4% after reporting better than expected April-June quarter earnings. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1116:761; while 32 shares remained unchanged.

The BSE Sensex is currently trading at 25669.67, up by 150.43 points or 0.59% after trading in a range of 25645.79 and 25744.51. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index gained 0.39%.

The gaining sectoral indices on the BSE were Auto up by 1.66%, Consumer Durables up by 1.37%, PSU up by 1.05%, Oil & Gas up by 0.94%, Power up by 0.81% while, TECK down by 0.61%, IT down by 0.60%, FMCG down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 5.70%, GAIL India up by 4.33%, HDFC up by 3.24%, ONGC up by 2.58% and Tata Power up by 2.37%. On the flip side, Bharti Airtel down by 1.65%, TCS down by 0.84%, ITC down by 0.83%, BHEL down by 0.74% and Hindalco down by 0.73% were the top losers.

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 7663.60, up by 37.65 points or 0.49% after trading in a range of 7657.10 and 7691.45. There were 30 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 5.89%, GAIL India up by 3.98%, HDFC up by 2.80%, ONGC up by 2.43% and Tata Power up by 2.26%. On the flip side, Bharti Airtel down by 1.74%, TCS down by 0.91%, ITC down by 0.83%, Hindalco down by 0.81% and Infosys down by 0.71% were the top losers.

Asian markets were trading mixed; KOSPI Index was gaining 2.1 points or 0.1% to 2,041.47; Straits Times rising by 3.82 points or 0.12% to 3,310.27; Jakarta Composite adding 22.87 points or 0.45% to 5,136.10; Nikkei 225 advancing by 30.79 points or 0.2% to 15,161.31. On the flip side, Hang Seng lost 39.06 points or 0.16% to 24,606.96; Taiwan Weighted slid 9.79 points or 0.11% to 9,163.12; Shanghai Composite shed 4.86 points or 0.22% to 2,219.79 and FTSE Bursa Malaysia KLCI surrendered 1.17 points or 0.06% to 1,848.15.

European markets got off to a red start; with Germany’s DAX trading lower by 16.72 points or 0.18% to 9,164.02; Germany’s DAX shedding 16.72 points or 0.18% to 9,164.02 and UK’s FTSE 100 sliding 9.57 points or 0.14% to 6,623.25.