Benchmarks pare some early gains; Sensex trades in green

Indian bourses continued to trade in green in the afternoon session as buying momentum in the equities persisted, however the gains were capped and a marginal correction from day's high levels was seen as selling appeared in oil and gas and metals stocks. Though most of the sectoral indices were trading in green and bankex was top gaining index up by around 1.23%. Persistent inflow of foreign funds and sustained buying by retail investors, a series of economic reforms undertaken by the government and better-than-expected earnings by blue-chip companies buoyed the sentiments. Besides, declining global crude oil prices which dipped to its lowest closing point since October 2011 also provided support to the domestic benchmarks. Further, the World Bank statement that India ranking for ease of doing business will improve by at least 50 notches if all of the country's best practices are followed at the state level also added to the optimistic sentiment. Buying was broad based as both mid cap and small cap indices were trading up by over 0.60%. However, investors remained cautious as the NCAER has lowered India's GDP growth forecast to 5 percent for current fiscal from 5.7 percent projected earlier.

Industrial energy solutions provider Thermax has gained more than 4% at Rs 952 after its net profit  rose three fold at Rs 86 crore for Q2FY14 as compared to Rs 30 crore same quarter last year. On the other hand, shares of IPCA laboratories slumped around 10.4% to Rs 668 as a global brokerage house  downgraded the stock to 'underperform' from 'neutral', citing negative USFDA observations.

On global front, Asian markets were trading mixed with Nikkei 225 up by 0.62% and Hang Seng down 0.48%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was positive, out of 2,678 stocks traded, 1,589 stocks advanced, while 981 stocks declined on the BSE.

The BSE Sensex is currently trading at 27917.96, up by 57.58 points or 0.21% after trading in a range of 27888.27 and 28006.60. 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 0.60%, while Small cap index up by 0.89%.

The gaining sectoral indices on the BSE were Bankex up by 1.23%, Realty up by 0.77%, FMCG up by 0.47%, IT up by 0.36%, Capital Goods up by 0.33%. On the other hand, Metal down by 1.84%, Oil & Gas down by 0.36% and Power down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.34%, Axis Bank up by 2.24%, Sun Pharma Inds. up by 1.90%, Hindustan Unilever up by 1.11% and ICICI Bank up by 1.03%. On the flip side, Sesa Sterlite down by 2.91%, Coal India down by 2.22%, Bharti Airtel down by 1.39%, Mahindra & Mahindra down by 1.26% and Tata Steel down by 1.26% were the top losers.

Meanwhile, the World Bank, which recently ranked ‘India’ 142nd in its ‘ease of doing business’ list, underscored that ranking could move up by at least 50 notches if best practices followed at the state levels were put together. These comments come within days of the country’s position slipping further to 142 among 189 countries in the ease of doing business ranking, as against 134 last year, which if so was mainly because of better performance by other nations.

World Bank also was then quick to add the latest ranking, did not take into account the slew of measures taken by Modi Government to make India a business friendly destination since it was only in the second half of the May did the new government took over into office.

It highlighted that the concept of ease of doing business had to be understood in relative terms, which implied that even if India’s actual score had improved, the scores of other countries improved better, which in turn meant that one would always have to have track the development of the competitors.
Further, World Bank also expressed optimism of country enjoying the benefits of demographic dividend in the next decade, when the population over the world starts to age since Indian labour workforce would remain to be young and better educated.

Lastly, it recommended that if the country wants to sustain its economic growth over the long-term then it had to focus on the bottlenecks in the near term such as business environment and lack of energy supplies, establish foundations for stronger long-term growth by managing urbanization and building skills.

The CNX Nifty is currently trading at 8347.60, up by 23.45 points or 0.28% after trading in a range of 8326.10 and 8363.95. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were SBI up by 2.44%,  Axis Bank up by 2.39%,  Indusind Bank up by 2.38%, BPCL up by 2.20% and Sun Pharma Inds up by 2.03%. On the flip side, Cairn India down by 4.54%, Sesa Sterlite down by 3.16%, NMDC down by 2.98%, Coal India down by 2.05% and Ambuja Cement down by 1.60% were the top losers.

Asian markets were trading mixed, Jakarta Composite up by 4.86 points or 0.1% to 5,075.80, Straits Times up by 5.63 points or 0.17% to 3,287.20 and Nikkei 225 up by 104.63 points or 0.62% to 16,967.10. While, Hang Seng down 115.63 points or 0.48% to 23,730.03, Taiwan Weighted down 26.58 points or 0.3% to 8,962.60, Shanghai Composite down 10.38 points or 0.43% to 2,420.29, FTSE Bursa Malaysia KLCI down 6.2 points or 0.34% to 1,841.16 and KOSPI Index down 3.76 points or 0.19% to 1,931.43