Benchmarks continue to trade in green in late morning session

After getting a cautious but positive start, Benchmarks showed some strength in early morning trades and continued to trade in narrow range in late morning deals, with the Sensex over the 26,000 and the Nifty above 7,750 marks.  Encouraging Q1 earnings, increased FII buying and positive global cues continued to bolster investor sentiments. Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 718.27 crore on August 13, 2014. However, a cautious approach adopted by some investors in view of longer weekend, as markets will remain closed tomorrow on account of ‘Independence Day’, limited the gains.

Meanwhile, stocks from FMCG, Consumer Durables and Healthcare counters were supporting the markets’ uptrend, while those from Realty and Auto counters were adding to the underlying cautious undertone.In scrip specific development, Shares of Timken India have surged as much as 10% after reporting 107% year on year (yoy) jump in net profit at Rs 26 crore for the quarter ended June 2014 (Q1). Besides, Voltas has rallied 5% after reporting an over  two-fold jump in consolidated net profit at Rs 109 crore for the first quarter ended on June 30, 2014 (Q1), on back of strong operational performance.

Asian stocks were trading higher in early trade as a slowdown in the US retail sales fuelled bets that the US Federal Reserve won't raise interest rates earlier than expected. Back home, the rupee rebounded by 17 paise to 61.04 against the dollar in early trade on increased selling of the American currency by exporters and banks. The market breadth on BSE was negative, out of 2163 stocks traded, 1038 stocks advanced, while 1054 stocks declined on the BSE.

The BSE Sensex is currently trading at 26024.21 up by 105.26 points or 0.41% after trading in a range of 26071.52 and 25945.35. 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 0.36%, while Small cap index up by 0.15%.

The top gaining sectoral indices on the BSE were FMCG up by 0.76%, Consumer Durables up by 0.69%, Healthcare up by 0.66%, Bankex up by 0.65% and Capital Goods up by 0.56%, while Realty was down by 0.21% and Auto was down by 0.07% were the few losers on the sectoral index.

The top gainers on the Sensex were SSLT up by 1.84%, Gail India up by 1.72%, HDFC Bank up by 1.59%, ICICI Bank up by 1.46% and Sun Pharma up by 1.31%. On the flip side, Hero MotoCorp was down by 3.20%, HDFC was down by 1.79%, Tata Steel was down by 1.05%, Bajaj Auto was down by 0.96% and BHEL was down by 0.53% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) Governor Raghuram Rajan has stated that high interest rate structure may be painful in the short run but will help in long run by containing inflation. The governor comment comes after the retail inflation rose more than expected at 7.96% in July as compared to 29 months low of 7.31% in June.The RBI considers price stability an essential condition for economic revival and aims to bring down retail inflation to 6% by January 2016.

The RBI Governor has been criticized for keeping the interest rates at high level for long. Raghuram Rajan explained that owing to the bottlenecks on supply sides, the RBI is seeking to keep some control over the demand side by keeping the interest rates high.

The RBI, with an aim to generate long term growth by bringing down inflation over a reasonable period of time, has raised repo rate three times to 8% since September’13 to tame price rise through cooling demand. The RBI is unlikely to cut key policy rates in next monetary policy review amid concerns that retail inflation could rise again due to pass-through of administered price increases, continuing uncertainty over monsoon conditions and their impact on food production, possibly higher oil prices stemming from geo-political concerns and exchange rate movement.

The CNX Nifty is currently trading at 7,763.50 up by 23.95 points or 0.31% after trading in a range of 7,781.00 and 7,739.10. There were 32 stocks advancing against 28 declining on the index.

The top gainers of the Nifty were Lupin up by 1.88%, HDFC Bank up by 1.55%, ICICI Bank up by 1.48%, Gail up by 1.47% and Asian Paint up by 1.39%. On the flip side, Hero MotoCorp down by 3.09%, HDFC down by 2.11%, Bajaj Auto down by 1.25%, DLF down by 1.13% and BHEL down by 1% were the major losers on the index.

Asian markets were trading mostly in the red; KOSPI Index down by 0.24%, Taiwan Weighted was down by 0.11%, Shanghai Composite dropped by 0.24%, Hang Seng slipped 0.06%, FTSE Bursa Malaysia KLCI declined by 0.01% and Jakarta Composite was down by 0.40%. On the flip side, Nikkei 225 strengthens by 0.68% and Straits Times surged 0.13%.