Benchmarks trim gains; trade continues in green

Indian equity benchmarks paired some early gains and were trading in a narrow range with a positive bias in late morning session led by gains in Realty, Capital Good and banking stocks amid expectations of encouraging IIP and CPI data for July and August to be released on September 12, 2014. Some support also came in from United Nations Conference on Trade and Development’s (UNCTAD’s) report that Indian economy will grow at a rate of 5.6 percent in 2014. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 9.91 crore on September 10, 2014. Meanwhile, Shares of disinvestment candidates such as ONGC, Coal India and NHPC were trading lower after the Union Cabinet cleared a dilution of the government's stake in these companies. On the flip side, shares of power companies were trading higher after Supreme Court reserved the verdict on coal block de-allocation. In scrip specific development, Shares of Sun Pharma have declined after the US Food and Drug Administration conducted a surprise inspection of the pharma major's manufacturing unit at Halol, Gujarat. On the other hand, shares of Indian Oil Corporation gained on inking MoU to set up city gas infra in Uttar Pradesh.

On global front, Asian markets were trading in a narrow range after US President Barack Obama stated that he had authorised US air strike in Syria and also in Iraq to fight the Islamic State militants. Meanwhile, US stocks recovered from the losses in the previous two sessions helped by a rebound in shares of Apple which recently unveiled the iPhone6. Back home, Indian rupee recovered by 11 paise to trade at 60.84 against the US dollar in early trade on selling of the American currency by banks and exporters.  The market breadth on BSE was positive, out of 2251 stocks traded, 1406 stocks advanced, while 770 stocks declined on the BSE.  

The BSE Sensex is currently trading at 27085.62 up by 28.21 points or 0.10% after trading in a range of 27150.78 and 27036.95. 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 1.20%, while Small cap index gained 1.52%.

The gaining sectoral indices on the BSE were Realty up by 1.20%, Capital Goods up by 0.99%, Bankex up by 0.85%, Infrastructure up by 0.84% and FMCG up by 0.72% while, Auto down by 0.18%, IT down by 0.12% and TECK down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.49%, Hindustan Unilever up by 1.32%, Axis Bank up by 1.23%, Larsen & Toubro up by 1.10% and Hindalco up by 0.93%. On the flip side, Sun Pharma down by 3.83%, Coal India down by 2.37%, Mahindra & Mahindra down by 1.47%, Cipla down by 1.04% and Bajaj Auto down by 0.78% were the top losers.

Meanwhile, In an encouraging development for the economy, Rating agency Moody's, in its report titled 'India outlook: Prospects brighten', underscored the downside risks to the economy have receded, while those of prospects brightened and pegged growth rate to accelerate to 5.2% in 2014 and further to 6.5% by end of 2015.

India's economic growth accelerated to 5.7% in April-June quarter, higher than 4.7% in the same quarter of previous fiscal. The economy grew by sub-5% in 2012-13 and 2013-14. Presently, government expects growth in current fiscal to be between 5.4-5.9%.

According to the global rating agency, the downside risk of the economy has receded around fiscal deficit, but inflation remains elevated. However, fiscal deficit during the first four months of the current fiscal breached 60% of full year’s target, raising concerns for the government, which aims to bring it down to 4.1% by the end of the financial year. Meanwhile, the annual inflation based on consumer price index rose to 7.96% in July from 7.46 percent in the month before.

Meanwhile, commenting on that Prime Minister Narendra Modi's first 100 days in office, the rating agency in its report highlighted that these first 100 days have been relatively uneventful, with no major policy developments and an interim budget that fell well short of expectations. However, the agency also added that signs have been promising and it was unlikely that Modi’s government will resist the mistakes of his predecessor.

The CNX Nifty is currently trading at 8,114.10 up by 20.00 points or 0.25 % after trading in a range of 8,127.95 and 8,096.25. There were 35 stocks advancing against 15 declining on the index.

The top gainers on Nifty were IDFC up by 3.76%, Bank of Baroda up by 2.42%, PNB up by 2.19%, SBI up by 1.88% and BPCL up by 1.55%. On the flip side, Sun Pharma down by 3.60%, Coal India down by 2.36%, Mahindra & Mahindra down by 1.38%, Cipla down by 1.02% and Tech Mahindra down by 1.00% were the top losers.

Asian markets were trading in the green; FTSE Bursa Malaysia KLCI surged by 0.02%, Straits Times was jumped 0.29%, Nikkei 225 rose by 0.74%, Jakarta Composite gained by 0.49%, Shanghai Composite increased by 0.49%, KOSPI Index up by 0.03% and Hang Seng up by 0.11%. On the flip side, Taiwan Weighted was down by 0.06%.