Benchmarks trade higher in early deals; Sensex surpasses 25,900 mark

Indian equity benchmarks, after a cautious start, are trading in the green on Wednesday as sentiments turned positive after global rating agency Moody’s estimated that the country’s GDP will grow by 5 percent this year and accelerate further in 2015. Also, the Finance Ministry has said that discussions with the state governments on Goods and Service Tax (GST) are in the final stages and its implementation will help improve transparency and efficiency. However, gains remained capped after retail inflation rising in July by 50 basis points at 7.96% and index of industrial production unexpectedly slowing to 3.4%, as against the previous month's 4.7%.

On the global front, the US markets ended modestly lower in last session on lingering geopolitical concerns amid a focus on developments in Ukraine. However, the Asian markets were trading mostly in the green at this point of time ahead of economic data from China, meanwhile the Japanese market was modestly in green despite report the nation’s economy contracted an annualized 6.8 percent in the three months through June.

On the sectoral front, oil and gas, healthcare and fast moving consumer goods witnessed the maximum gain in trade, while realty, capital goods and power remained the top losers on the BSE sectoral space. The broader indices, however, were reeling under pressure, while the market breadth on the BSE was evenly divided; there were 913 shares on the gaining side against 925 shares on the losing side while 72 shares remain unchanged.

The BSE Sensex opened at 25861.47; around 19 point lower compared to its previous closing of 25880.77, and has touched a high and a low of 25966.63 and 25850.51 respectively. The index is currently trading at 25942.01, up by 61.24 points or 0.24%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth was evenly divided with 47.80% stocks advancing against 48.43% declines. The broader indices, however, were trading in the red; the BSE Mid cap index was down 0.04%, while Small cap index was down by 0.06%. 

The top gaining sectoral indices on the BSE were Oil and Gas up by 1.20%, Healthcare up by 1.13%, FMCG up by 1.07%, PSU up by 0.42% and Infrastructure up by 0.26%, while Realty was down by 1.24%, Capital Goods was down by 1.03%, Power was down by 0.65%, Consumer Durables was down by 0.50% and IT was down by 0.02% were the top losers on the sectoral index.

The top gainers on the Sensex were HUL up by 2.15%, ONGC up by 1.53%, ITC up by 1.27%, Bharti Airtel up by 1.24% and RIL up by 1.17%. On the flip side, BHEL was down by 4.16%, Tata Power was down by 0.93%, Hindalco was down by 0.89%, L&T was down by 0.88% and NTPC was down by 0.61% were the top losers on the Sensex.

Meanwhile, contradicting indications of strong recovery in domestic economic growth, India’s annual industrial output growth, measured by index of industrial production (IIP), slowed down to 3.4% y-o-y in the month of June as compared to 4.7% in May due to a massive contraction in consumer goods. IIP number for June was also stayed below the market expectation of 5.8% growth. The cumulative growth for the period April-June 2014-15 over the corresponding period of the previous year stands at 3.9%.

On sectoral basis, electricity index, which occupies 10.32% weightage in the overall index, grew by 15.7 % in the reported month as against 6.3% in May and mining sector output grew by 4.3% as compared to 2.7% in the previous month. However, the output of manufacturing sector, which occupies 75.52% weightage in the overall index, slowed down to 1.8% in June from 4.8% growth in May. The cumulative growth of Mining, Manufacturing and Electricity sectors during April-June 2014-15 over the corresponding period of 2013-14 stood at 3.2%, 3.1% and 11.3% respectively.

On Use-based classification, capital goods production, a barometer for investments in the economy, has shown a tremendous growth at 23% in June as against 4.5% in May. The output of basic goods sector grew by 9% as against 6.3% in May while consumer non-durables output slowed down to 0.1% in June as compared to 3.9% in May. However the output of consumer durables sector witnessed a massive contraction at 23.4% in June as compared to 3.2% growth in May, indicating that consumers are reeling under high inflation which is impacting their spending.

The CNX Nifty opened at 7,717.30; about 10 point lower as compared to its previous closing of 7,727.05, and has touched a high and a low of 7,755.25 and 7,711.80 respectively. The index is currently trading at 7,750.40, up by 23.35 points or 0.30%. There were 34 stocks advancing against 16 declines on the index.

The top gainers of the Nifty were BPCL up by 3.11%, NMDC up by 2.94%, HUL up by 2.08%, Asian Paints up by 1.56% and Bharti Airtel up by 1.45%. On the flip side, BHEL down by 4.42%, Tata Power down by 1.31%, Bank of Baroda down by 1.19%, DLF down by 1.14% and Tech Mahindra down by 0.67% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 soared 50.51 points or 0.33% to 15,211.82, KOSPI Index gained 12.17 points or 0.60% to 2,053.64, Jakarta Composite increased 11.86 points or 0.23% to 5,144.26, FTSE Bursa Malaysia KLCI added 3.00 points or 0.16% to 1,853.39 and Taiwan Weighted was up by 50.65 points or 0.55% to 9,213.77.

On the flip side, Hang Seng slipped by 58.48 points or 0.24% to 24,630.93, Straits Times dropped 6.46 points or 0.20% to 3,296.93 and Shanghai Composite was down 14.00 points or 0.63% to 2,207.59.