Firm trade prevails; Nifty hovers around 7900 mark

Indian equity benchmarks continued its firm trade in the late afternoon session on account of buying in frontline blue chip counters. Investors however took note of HSBC report which highlighted that amidst all the bullish calls on the Indian markets, it maintains its neutral weight on India. According to HSBC, the valuations still look high and foreign mutual funds are still very overweight on Indian shares. Traders were seen piling up positions in Auto, Capital Goods and PSU while selling was witnessed in IT and TECK sector stocks. In scrip specific development, Sesa Sterlite, the subsidiary of London-listed Vedanta Resources, was trading firm on Goa government’s announcement of resuming operations in the mining industry by year-end.

On the global front, the Asian markets were trading in green, while the European markets too traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,850 and 26,400 levels respectively. The market breadth on BSE was positive in the ratio of 1554:1239 while 108 scrips remained unchanged.

The BSE Sensex is currently trading at 26443.28, up by 52.32 points or 0.20% after trading in a range of 26395.17 and 26530.67. 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 0.96%, while Small cap index up by 1.09%.

The gaining sectoral indices on the BSE were Auto up by 1.72%, Capital Goods up by 1.20%, PSU up by 1.16%, Realty up by 1.04%, Power up by 0.86% while, IT down by 0.55%, TECK down by 0.37% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.25%, Sesa Sterlite up by 2.24%, Dr. Reddy’s Lab up by 2.20%, Tata Motors up by 2.00% and BHEL up by 1.79%. On the flip side, HDFC down by 2.20%, TCS down by 1.80%, Sun Pharma down by 0.85%, Hindustan Unilever down by 0.78% and Hindalco down by 0.77% 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 7896.55, up by 22.30 points or 0.28% after trading in a range of 7881.15 and 7918.55. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were BPCL up by 4.05%, United Spirits up by 3.28%, Mahindra & Mahindra up by 3.25%, IndusInd Bank up by 3.04% and Dr. Reddy’s Lab up by 2.33%. On the flip side, HDFC down by 2.25%, TCS down by 1.87%, Sun Pharma down by 1.08%, Hindalco down by 0.80% and HDFC Bank down by 0.76% were the top losers.

The Asian markets were trading in green; Straits Times increased 5.83 points or 0.18% to 3,318.61, Shanghai Composite increased 5.86 points or 0.26% to 2,245.33, FTSE Bursa Malaysia KLCI increased 6.41 points or 0.34% to 1,868.16, Jakarta Composite increased 13.5 points or 0.26% to 5,170.25, KOSPI Index increased 18.01 points or 0.88% to 2,071.14, Taiwan Weighted increased 102.47 points or 1.12% to 9,243.78, Nikkei 225 increased 127.19 points or 0.83% to 15,449.79 and Hang Seng increased 167.49 points or 0.67% to 25,122.95.

On the other hand, France’s CAC increased 14.46 points or 0.34% to 4,245.11, Germany’s DAX increased 81.08 points or 0.88% to 9,326.41 and UK’s FTSE 100 increased 30.15 points or 0.45% to 6,771.40.