Benchmarks bounce back from day’s low; broader indices continue to outperform

Bouncing off day’s low, local equity markets were trading near day’s high point tailing positive start of European equities, which added to the already upbeat sentiment. sentiments right from start of trade remained upbeat as risk appetite returned following upbeat U.S. housing data and easing tensions in the Middle East and Ukraine. Meanwhile, traders also took a heart from the report which suggested of India touching top spot in Nielsen’s Global Survey of Consumer Confidence. According to Nielsen global survey, India has touched the top spot in consumer confidence among 60 countries. During April-June quarter of 2014, India’s ranking increased seven index points to 128, surpassing the 123 logged by Indonesia, which previously held the top spot for five consecutive quarters. Trading near record highs, while Sensex was hovering above crucial 26,400, Nifty continued to flirt with 7900 mark, with gains of around two tenths of a percent. Meanwhile, broader indices outperforming larger peers with hefty margins, were up with gains of around a percent.

On the global front, receiving positive hand over from Asian counterparts, European equities too got off to positive start with investors looking with hope to this week’s central bank jamboree at Jackson Hole amidst growing consensus that the Fed will use its sojourn to Wyoming, which kicks off on Thursday, to play down expectations that monetary policy will be tightened anytime soon.

Closer home, while most of the sectoral indices on BSE were trading into positive territory, stocks from Consumer Durables, Information Technology and Technology counters were the only weak spell of trade. On the flip side, the underlying strength of the bourses were mainly endorsed by stocks belonging from Metal, Auto and Capital Goods counters. Besides, Oil marketing companies stocks were in demand for second consecutive session after a report from goldman Sachs suggested that Oil retailers would suffer no losses on diesel after a hike in prices in September, which would mean diesel prices charged by retailers could be market-priced by September. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1316:553; while 34 shares remained unchanged.

The BSE Sensex is currently trading at 26439.25, up by 48.29 points or 0.18% after trading in a range of 26395.17 and 26530.67. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.93%, while Small cap index up by 1.04%.

The gaining sectoral indices on the BSE were Auto up by 1.55%, Capital Goods up by 1.07%, Metal up by 1.03%, Bankex up by 0.73% and PSU up by 0.69% while, IT down by 0.30%, Consumer Durables down by 0.29% and TECK down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 2.84%, Dr. Reddys Lab up by 2.23%, Mahindra & Mahindra up by 2.22%, Tata Motors up by 2.10% and BHEL up by 1.63%. On the flip side, HDFC down by 1.98%, TCS down by 1.44%, Hindustan Unilever down by 1.05%, Sun Pharma Inds. down by 0.66% and HDFC Bank down by 0.62% were the top losers.

Meanwhile, in order to provide relief to domestic producers, the Government has imposed safeguard duty on the import of seamless pipes and tubes, which are used in equipment for oil exploration, power generation, and bearing industry among others. Safeguard and anti-dumping duty are imposed to revitalize domestic industry from excessive or cheap import. Decision to impose safeguard duty has been taken after a petition filed by the domestic producers against the high imports from china and other countries. The domestic produces also stated that despite increase in the price of raw materials, importers were bringing their product at cheaper price, which is affecting the domestic industry.

The move is likely to provide benefit to domestic seamless pipes and tubes produces like Jindal Saw and ISMT. While, Indian firms like BHEL, ONGC and Oil India are among the largest consumers of such products. Country’s total demand of seamless pipes and tubes stood at around 5,84,098 tonnes in FY13 out of which 64% of India total demand was met through the imports.  

The Central Board of Excise and Custom (CBEC) notified that safeguard duty will be imposed at the rate of 20 percent in the first year (August 13, 2014-August 12, 2015), 10 per cent in the second year (August 13, 2015-August 12, 2016) and at the rate of 5 percent in the third year (August 13, 2016-February 12, 2017). This will not be applicable on imports from developing countries such as Indonesia, Malaysia, Thailand and South Africa, besides others.

The CNX Nifty is currently trading at 7895.70, up by 21.45 points or 0.27% after trading in a range of 7881.15 and 7918.55. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.57%, United Spirits up by 3.20%, Indusind Bank up by 2.83%, Sesa Sterlite up by 2.52% and Dr Reddys Lab up by 2.34%. On the flip side, HDFC down by 1.84%, TCS down by 1.51%, Sun Pharma Industries down by 0.95%, Hindustan Unilever down by 0.92% and Power Grid Corporation down by 0.74% were the top losers.

Asian markets were trading into positive territory; with Shanghai Composite rising by 2.15 points or 0.1% to 2,241.62; Straits Times gaining by 3.53 points or 0.11% to 3,316.31; FTSE Bursa Malaysia KLCI advancing by 8 points or 0.43% to 1,869.75; Jakarta Composite edging higher by 10.76 points or 0.21% to 5,167.51; KOSPI Index surging by 18.01 points or 0.88% to 2,071.14; Hang Seng inching up by 18.66 points or 0.07% to 24,974.12;  Taiwan Weighted surging by 102.47 points or 1.12% to 9,243.78 and Nikkei 225 rallying by 127.19 points or 0.83% to 15,449.79.

European markets continue to trade into positive territory; with France’s CAC rising by 6.14 points or 0.15% to 4,236.79; UK’s FTSE 100 gaining by 18.31 points or 0.27% to 6,759.56 and  Germany’s DAX adding 52.43 points or 0.57% to 9,297.76.