Benchmarks continue to trade in green in late morning session

Indian bourses continued to trade in green in late morning session on continued buying activities by both funds and retail investors. Sentiment on the street improved as global rating agency Moody’s estimated that the country’s GDP will grow by 5 percent this year and accelerate further in 2015. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 370.83 crore on August 12, 2014. However, weak industrial growth in June and rising consumer price inflation in July weighed on investor sentiment. Investors have been cautious as the India meteorological department (IMD) forecasted that the June-September monsoon, vital for kharif crops, would be 87 per cent of the long-term average, however it has ruled out drought.

Among BSE sectoral indices, FMCG index gained the most, followed by oil & gas and healthcare. On the other hand, realty, capital goods and power indices succumbed to selling pressure. In scrip specific development, shares of Sun Pharma have gained after reporting a net profit of Rs 1,391 crore in the first quarter of FY15, compared with a net loss of Rs 1,276 in the year-ago period. On the other hand, BHEL was the top Sensex loser down over 5% after a sharp 58% year-on-year drop in its net profit at Rs 194 crore for the quarter ended June 30, 2014 (Q1), mainly due to decline in sales from power and industry segments.

Asian stocks swung between gains and losses as investors weighed earnings reports. While, the US markets ended modestly lower in last session on lingering geopolitical concerns amid a focus on developments in Ukraine. Back home, the Indian rupee was trading lower at 61.26 compared to its previous close of 61.08 on account of weak industrial growth in June and higher-than-expected jump in July consumer price inflation. The market breadth on BSE was negative, out of 2256 stocks traded, 992 stocks advanced, while 1185 stocks declined on the BSE.

The BSE Sensex is currently trading at 25955.48 up by 74.71 points or 0.29% after trading in a range of 25972.62 and 25850.51. There were 16 stocks advancing against 14 stocks declining on the index. The broader indices were trading in red; the BSE Mid cap index was down by 0.39%, while Small cap index down by 0.35%.

The top gaining sectoral indices on the BSE were FMCG up by 1.41%, Healthcare up by 1.26%, IT up by 0.90%, Oil & Gas up by 0.85% and TECK up by 0.65%, while Realty was down by 1.71%, Capital Goods was down by 1.55%, Power was down by 1.07%, Consumer Durables was down by 0.62% and India Infrastructure Index was down by 0.30% were the top losers on the sectoral index.

The top gainers on the Sensex were HUL up by 2.15%, ITC up by 1.71%, Sun Pharma up by 1.64%, TCS up by 1.30% and Cipla up by 1.085%. On the flip side, BHEL was down by 5.79%, Hindalco was down by 1.78%, Tata Power was down by 0.37%, L&T was down by 1.27% and Tata Steel was down by 0.72% were the top losers on the Sensex.

Meanwhile, India Inc has expressed concerns over the soft industrial growth data and increase in retail inflation and further expressed need for some bold measures with a renewed thrust on manufacturing to instill confidence among investors and boost economic growth. Tempering optimism about a strong economic recovery, 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. Meanwhile, retail inflation inched up to 7.96 percent in July from 7.31% in June due to higher prices of food items.

CII Director General Chandrajit Banerjee has asserted that industrial production was mainly impacted by the sluggish performance of the manufacturing sector. 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. By adding further, Banerjee has stated that the government should introduce industry favorable land, labour and environment norms, which could promote ease of doing business in the country.

Assocham President Rana Kapoor has stressed that as India's industrial output slowed unexpectedly while inflation accelerated, it is early to say that a decisive rebound in Indian economy and bold measures are required to boost the investors’ confidence. Meanwhile, Ficci President Sidharth Birla has said that industrial production seems to have bottomed out and steps taken by the Government so far and measures announced in the budget would help in further revival of the sector. During the April-June period of the current fiscal, IIP has recorded a growth of 3.9 percent, as against contraction of 1 percent in the first quarter of 2013-14.

The CNX Nifty is currently trading at 7,751.70 up by 24.65 points or 0.32% after trading in a range of 7,757.10 and 7,711.80. There were 28 stocks advancing against 22 declining on the index.

The top gainers of the Nifty were NMDC up by 2.77%, BPCL up by 2.49%, HCL Tech up by 2.37%, HUL up by 2.35% and Asian Paint up by 2.23%. On the flip side, BHEL down by 5.95%, Bank of Baroda down by 1.74%, DLF down by 1.73%, Hindalco down by 1.67% and Tata Power down by 1.64% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 soared 0.16%, KOSPI Index gained 0.61%, Jakarta Composite increased 0.14%, FTSE Bursa Malaysia KLCI added 0.15% and Taiwan Weighted was up by 0.64%. On the flip side, Hang Seng slipped by 0.24%, Straits Times dropped 0.22% and Shanghai Composite was down 0.66%.