Benchmarks continue to trade with strength on penultimate session of F&O expiry

Benchmark equity indices continued to hold their fort firmly in green, with gains of three tenths of a percent as market-participants continued to cover up their pending short positions ahead of monthly expiry in the derivatives segment. However, further uptrend of bourses is unlikely as some caution may set in ahead of the release of Q1FY15 GDP data and Current Account Deficit numbers, due later in the week. Street widely expects Asia's third largest economy is likely to grow 5.3% in the first quarter of this fiscal year (April-March), up from 4.6 percent in January-March, which would be the fastest since the quarter that ended in March 2012. Additionally, a cautious start of European markets to may weigh on the sentiment. However, both Sensex and Nifty were currently holding above crucial 26,500 and 7,900 levels respectively. Meanwhile, broader indices continuing with their outperformance were trading higher with gains in the range of 0.55%-0.85%.

On the global front, European shares pausing after their brisk 2-1/2 week rally, got off to a cautious start as data showing German consumer morale falling for the first time in more than 1-1/2 years dented investors' appetite for stocks. However, Asian pacific shares looked set for a mostly positive close on the back of overnight record close of Wall-Street, which was on the back of better than expected  reports that casted a favorable light on the economy.

Closer home, most of the sectoral indices on BSE were trading into positive territory, with the only exception being Power, Metal and Infrastructure counters which were trading under pressure. On the flip side, stocks from Consumer Durable, Information Technology and Auto counters were the top gainers of the session. In stock-specific activities, shares of defense equipment manufacturers were hogging limelight after government notified the increase in foreign direct investment (FDI) limit to 49% in the defence sector through approval route. Besides, Oil & Gas stocks too were on investors’ radar after Oil Ministry proposed for deregulation of diesel prices after retail rates achieve parity with global levels. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1461:1180; while 96 shares remained unchanged.

The BSE Sensex is currently trading at 26536.85, up by 94.04 points or 0.36% after trading in a range of 26526.47 and 26599.12. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index up by 0.86%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.04%, IT up by 0.85%, Auto up by 0.65%, TECK up by 0.60% and FMCG up by 0.59% while, Power down by 0.91%, Metal down by 0.76% and INFRA down by 0.64% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.38%, ONGC up by 1.83%, Bajaj Auto up by 1.47%, Tata Motors up by 1.28% and Dr. Reddys Lab up by 1.09%. On the flip side, NTPC down by 2.16%, Sesa Sterlite down by 1.58%, BHEL down by 1.38%, Hindalco down by 1.03% and HDFC Bank down by 0.77% were the top losers.

Meanwhile, in order to enhance India’s exports, the central government has asked states to appoint export commissioners to expedite efforts to boost country’s overseas shipments. The government is of the view that export commissioner would help in ensuring easing of bottlenecks and development of infrastructure through appropriate allocation of plan resources.

Over the past few months, Commerce Ministry has been taking various measures to involve state governments to boost country's exports. States’ nodal officers have been asked to develop export strategy, work with the state governments to implement such strategies and also prepare a list of infrastructure projects which will ensure full potential of exports growth. In last month, Commerce and Industry Minister Nirmala Sitharaman had written to the Chief Ministers of 15 states regarding their involvement in expansion of exports to help contain the current account deficit.

During April-July’FY15, the value of India’s overseas shipments increased by 8.62% to $107.84 billion from $99.28 billion in the same period of previous financial year. India’s export is likely to continue this growing trend given the improving global trade scenario with positive developments in the EU, US and emerging economies. Further, the government will announce new Foreign Trade Policy (FTP) for the period 2014-19 by end of September, which is expected to abolish conventional method of exports and promote exports of specific products in specific geographies.

The CNX Nifty is currently trading at 7928.05, up by 23.30 points or 0.29% after trading in a range of 7924.30 and 7946.85. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 2.86%, ICICI Bank up by 2.49%, ONGC up by 1.85%, Asian Paints up by 1.63% and BPCL up by 1.42%. On the flip side, NTPC down by 2.13%, BHEL down by 1.82%, Kotak Mahindra Bank down by 1.67%, Power Grid Corpn. down by 1.64% and Sesa Sterlite down by 1.48% were the top losers.

Asian markets were set for positive close; with Shanghai Composite up by 2.36 points or 0.11% to 2,209.47; KOSPI Index up by 6.88 points or 0.33% to 2,074.93; FTSE Bursa Malaysia KLCI up by 8.84 points or 0.47% to 1,870.66; Nikkei 225 up by 13.6 points or 0.09% to 15,534.82; Jakarta Composite up by 16.14 points or 0.31% to 5,162.69; Straits Times up by 16.59 points or 0.5% to 3,339.61; Taiwan Weighted up by 91.63 points or 0.98% to 9,485.59. On the flip side, Hang Seng down by 105.84 points or 0.42% to 24,968.66 was the only loser amongst Asian pack.

European markets got off to a cautious start; with UK’s FTSE 100 up by 2.4 points or 0.04% to 6,825.16; Germany’s DAX up by 3.96 points or 0.04% to 9,592.11, while  France’s CAC was trading lower by 3.39 points or 0.08% to 4,390.02