Benchmarks continue to trade in green in late morning session

Indian equity benchmarks continued to trade firm in late morning session on sustained capital inflows, driven by positive economic data with the GDP growth improving to two-and-a-half year high of 5.7 per cent in the April-June quarter and current account deficit (CAD) narrowed sharply to 1.7 per cent of GDP. Besides, the government's request to the apex court not to cancel the permits for 46 coal blocks and Japan’s announcement of doubling investment in India to about $34 billion over the next five years also boosted sentiment. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 554.14 crore on September 01, 2014. However, gains remained capped as Core sector output in the month of July slowed down to 2.7% from June nine-month high growth at 7.3% mainly due to decline in production of crude oil, natural gas, refinery products, fertilisers and steel.

Meanwhile, gains at Dalal Street were led by stocks belonging from Healthcare, Realty and Infrastructure counters. Additionally, auto Companies stocks too were gaining a lot of traction on the back of healthy growth in domestic car sales in August. On the flip side, stocks from IT, Metal and Capital Goods counters witnessing brutal thrashing, were restricting further upside of the markets. In scrip specific development, Cipla has rallied as much as 9% after the company launched an anti-asthma inhaler in Germany and Sweden that is a generic version of GlaxoSmithKline Plc's Advair. On the other hand, shares of Tata Motors declined after the company’s total sales (including exports) of Tata commercial and passenger vehicles declined 18% to 40,883 units in August 2014 over August 2013.

On global front, Asian stocks were mostly higher after a jump in average wages boosted Japan's market but Hong Kong's benchmark retreated on weak Chinese data and concerns over tensions with Beijing. Back home, the Indian rupee opened weak by 9 paise at 60.61 per dollar against the previous close of 60.52 against the dollar on fresh dollar demand from banks and importers. The market breadth on BSE was positive, out of 2336 stocks traded, 1458 stocks advanced, while 783 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26943.00 up by 75.45 points or 0.28% after trading in a range of 26960.52 and 26886.22. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.74%, while Small cap index gained 0.91%.

The gaining sectoral indices on the BSE were Healthcare up by 1.75%, Realty up by 1.24%, Infrastructure up by 1.12%, Consumer Durables up by 0.70% and Bankex up by 0.64%, while IT down by 0.51%, Metal down by 0.37%, Capital Goods down by 0.32%, PSU down by 0.03% and FMCG down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 6.48%, Bharti Airtel up by 3.60%, Sun Pharma Industries up by 2.43%, Bajaj Auto up by 1.64% and HDFC Bank up by 1.35%. On the flip side, Infosys down by 1.25%, Hindustan Unilever down by 1.18%, Larsen & Toubro down by 0.93%, Wipro down by 0.91% and ONGC down by 0.76% were the top losers.

Meanwhile, Core sector output in the month of July slowed down to 2.7% from June nine-month high growth at 7.3% mainly due to decline in production of crude oil, natural gas, refinery products, fertilisers and steel. The output of eight core industries grew by 5.3% in July 2013. The eight industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel - have a weight of 37.9% in the overall Index of Industrial Production (IIP).

Among core sectors, Electricity generation having 10.32% weight in IIP index registered a growth of 11.2% in July, 2014 over the same month of corresponding period. During April to July 2014-15, it recorded a growth of 11% over the corresponding period of previous year. Coal production with weightage of 4.38% in index increased by 6.2% in July, 2014 over the same period of corresponding period. On cumulative basis, coal production growth during April-July, 2014-15 increased by 5.7% compared to April-July, 2013-14. Cement sector having weightage of 2.41% respectively in IIP index, registered a growth of 16.5% respectively, in the month under review over July 2013. In cumulative terms, Cement production was recorded at 11.1% during April-July 2014-15.

On the flip side, Crude oil and Petroleum Refinery Products, with weightage of 5.22% and 5.94% in index declined by 1% and 5.5% in July, 2014 over July, 2013. In cumulative terms, Crude oil and Petroleum Refinery Products declined by 0.3 % and 2.2% during April-June 2014-15. Natural Gas production having weightage 1.71% in IIP index declined by 9% in July 2014 as compared to the month in July, 2013. The cumulative index for Natural Gas production during April-July 2014-15 declined by 5.2% over corresponding period of previous year.

Fertilizer production with weightage of 1.25% in IIP index declined 4.2% in July, 2014 over July, 2013. However, the cumulative index of Fertilizer production during April-July 2014-15 grew at 4.9% on YoY basis. Steel production (weight: 6.68%) decreased by 3.4 % in July, 2014 over July, 2013. While, its cumulative index during April to July, 2014-15 increased by 0.3% over the corresponding period of previous year.

The CNX Nifty is currently trading at 8,055.60 up by 27.90 points or 0.35% after trading in a range of 8,036.55 and 8,055.60. There were 29 stocks advancing against 21 declining on the index.

The top gainers on Nifty were Cipla up by 6.60%, Bharti Airtel up by 3.73%, Ultratech Cement up by 3.01%, Grasim Industries up by 2.46% and Sun Pharma Industries up by 2.39%. On the flip side, Hindustan Unilever down by 1.27%, Jindal Steel & Power down by 1.27%, Infosys down by 1.13%, Larsen & Toubro down by 1.01% and Wipro down by 0.87% were the top losers.

Asian markets were trading mostly in the green; Shanghai Composite increased 0.21%, FTSE Bursa Malaysia KLCI rose 0.04%, Straits Times gained 0.34%, Jakarta Composite increased 0.28% and Nikkei 225 was up 1.46%. On the other hand, Hang Seng decreased 0.30%, Taiwan Weighted declined 1.19% and KOSPI Index was down 0.78%.