Benchmarks off day’s highs; mood continues to remain upbeat

Benchmark equity indices although have come off their day’s high, but continue to trade firmly into positive territory with gains of over quarter of a percent, which has kept both Sensex and Nifty afloat above psychological 26,600 and 7,950 levels respectively on F&O expiry session. Moody’s report stating India's sovereign ratings are constrained by persistently high inflation that is weighing on an otherwise promising economic recovery, mainly has taken a toll on investment sentiment. Further, prevailing caution ahead of the release of Q1FY15 GDP data and possibly even Current Account Deficit (CAD) numbers later this week, also underpinned investors to be on the sidelines. Street widely expects Asia's third largest economy 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.

On the global front, Asian pacific shares looked set for a mostly negative close ahead of U.S. economic data and possible policy announcements from Japan, While revised data on US economic growth for April-June quarter is scheduled to be released later on Thursday, Prime Minister Shinzo Abe is expected to announce his new Cabinet ministers next week, which could signal what's in store for his so-called 'Abenomics' policies that have helped Japan's economic revival and stock prices. Meanwhile, European shares edged lower early on Thursday after touching a one-month high in the previous session, as investors focused on further data releases for hints about the European Central Bank's likely policy moves.

Closer home, most of the sectoral indices on BSE were holding into positive territory, however stocks from Realty, Healthcare and Power counters were the prominent losers of the session. On the flip side, much of demand was witnessed by stocks from Oil & Gas, followed by Infrastructure and Capital Goods counters which were the top gaining sectoral indices on BSE. Meanwhile, Railway stocks rallied on Thursday after the government notified FDI rules for the sector. The cabinet had approved 100 percent FDI in railways earlier this month. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1370:1248; while 103 shares remained unchanged.

The BSE Sensex is currently trading at 26634.60, up by 74.45 points or 0.28% after trading in a range of 26596.67 and 26674.38. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were mixed; with BSE Mid cap index trading lower by 0.14%, while Small cap index trading higher by 0.30%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.86%, INFRA up by 0.49%, Capital Goods up by 0.48%, Auto up by 0.30% and PSU up by 0.28% while, Realty down by 1.27%, Power down by 0.37%, IT down by 0.23%, and TECK down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 1.96%, Wipro up by 1.59%, Sesa Sterlite up by 1.19%, Tata Motors up by 1.13% and ONGC up by 1.11%. On the flip side, Tata Power down by 1.24%, SBI down by 0.84%, Sun Pharma Inds down by 0.79%, Tata Steel down by 0.74% and Cipla down by 0.70% were the top losers.

Meanwhile, concerned over the high food inflation in the country, Finance Minister Arun Jaitley has asserted that controlling food inflation is a top priority for the government. CPI inflation in food articles increased by 9.36% y-o-y in July as compared to 7.97% in June mainly driven by higher price of  fruits & vegetables, maize, condiments & spices and urad on account of below normal monsoon in the country. High food inflation also increased the retail inflation to 7.96% in July as compared to 7.31% in the previous month, restraining central bank’s scope for easing policy rate.

Attributing weak policy measures as well as seasonal factors for increase in food prices, Finance Minister stressed that food inflation, which has been hovering near double digit mark, has become a major issue for the country. However, the Minister assured that there is no need to worry as the country has sufficient food stocks. Besides, the new government has been taking measures to check food prices.

In order to contain food inflation, the government has recently taken steps such as de-listing of fruits and vegetables from Agricultural Produce Marketing Committee Act, bringing onion and potato under the Essential Commodities Act, fixing minimum export price of $500 per tonne and $450 per tonne on export of onion and potato respectively. Further, an additional 50 lakh tonne of rice has been allocated for distribution toward Below Poverty Line (BPL).

The CNX Nifty is currently trading at 7954.80, up by 18.75 points or 0.24% after trading in a range of 7942.25 and 7967.80. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.22%, Asian Paints up by 1.97%, GAIL India up by 1.80%, IDFC up by 1.74% and Wipro up by 1.44%. On the flip side, DLF down by 2.38%, Bank Of Baroda down by 2.22%, Jindal Steel & Power down by 2.19%, PNB down by 1.32% and Tata Power down by 1.30% were the top losers.

Asian markets were trading mostly lower; Hang Seng down by 203.05 points or 0.81% to 24,715.70; Nikkei 225 down by 74.96 points or 0.48% to 15,459.86; Shanghai Composite down by 9.68 points or 0.44% to 2,199.79; Taiwan Weighted down by 7.22 points or 0.08% to 9,478.37 and FTSE Bursa Malaysia KLCI down by 0.21 points or 0.01% to 1,872.17. On the flip side, KOSPI Index up by 0.83 points or 0.04% to 2,075.76; Straits Times up by 2.31 points or 0.07% to 3,343.77 and Jakarta Composite up by 22.2 points or 0.43% to 5,187.45.

European shares were trading in red; Germany’s DAX down by 24.87 points or 0.26% to 9,544.84; UK’s FTSE 100 down by 6.36 points or 0.09% to 6,824.30 and  France’s CAC down by 2.23 points or 0.05% to 4,393.03