Markets on way to recovery led by realty and consumer durables

Markets continue to trade with negative bias moving towards the mid-session of trade, though the choppiness witnessed during early part of the day has somewhat stablised, but the benchmarks are still lacking any major supportive cue that could help them to enter the green terrain. Some profit booking in bluechip stocks too is being witnessed at every attempt of recovery. There are some worries emanating from the global development of Greece fiscal worries and a rise in US bond yields. Traders seems to have overlooked the Finance Ministry’s expectation of a rating upgrade by credit agencies by the year-end on the back of policy initiatives, moderating inflation and improvement in the fiscal position of the government. Broader markets continue to show strength and were outperforming the benchmarks. Sectorally, there was a mixed show, though stocks of  oil & gas, health care and PSU companies were still suffering some profit-booking, on the other hand realty, consumer durable and metal were supporting the markets to some extent. The Infra pack too was trading with gains, as the Commerce Ministry will take up 22 proposals of SEZ developers that have approached it to surrender their tax free zones.

The BSE Sensex is currently trading at 27664.84, down by 22.46 points or 0.08% after trading in a range of 27577.67 and 27680.85. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index added 0.79%.

The top gaining sectoral indices on the BSE were Realty up by 0.92%, Consumer Durables up by 0.89%, INFRA up by 0.69%, TECK up by 0.68%, IT up by 0.59%, while, Oil & Gas down by 0.55%, PSU down by 0.24%, FMCG down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.30%, Vedanta up by 2.13%, Tata Power up by 1.60%, Wipro up by 1.30% and Infosys up by 1.00%. On the flip side, ONGC down by 1.79%, HDFC down by 1.33%, Tata Motors down by 0.86%, Hindustan Unilever down by 0.73% and ICICI Bank down by 0.52% were the top losers.

Meanwhile, showing signs of modest recovery, the SBI Monthly Composite Index, a leading indicator for manufacturing activity in Indian Economy, inched up from 46.8 in April 2015 to 53.8 in May 2015. The SBI Research Report has however cautioned that going ahead 'weak demand conditions' may persist that could have a negative impact on the industrial output numbers.

The report further added that due to continued tepid credit growth and subdued commercial vehicle sales in recent period, a negative impact may precipitate in June/July 2015 IIP. SBI further added that 'overall, with economic growth currently patchy and plagued with weak demand and low capex, corporate earnings are likely to remain subdued for most sectors barring few exceptions.

The report has however pointed that infrastructure activities will start possibly from the second half of this year as the Government would be in a position to push the projects and added that with the Government doing its bit, it is imperative to improve sentiments further through another round of monetary easing.

Meanwhile, the yearly SBI Composite Index for May 2015 decelerated to 56.4 in May from 58.2 in April 2015, due to entrenched disinflationary impetus and weak demand. An index value of less than 42 means large decline, while value of 42 to 46 means (moderate decline), 46 to 50 (low decline), 50 to 52 (low growth), 52 to 55 (moderate growth) and above 55 high growth.

The CNX Nifty is currently trading at 8366.35, down by 7.30 points or 0.09% after trading in a range of 8335.20 and 8375.15. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.63%, Hero MotoCorp up by 2.37%, Zee Entertainment up by 2.13%, Ultratech Cement up by 1.74% and Tata Power up by 1.73%. On the flip side, ONGC down by 1.69%, NMDC down by 1.50%, HDFC down by 1.42%, Cairn India down by 1.15% and Lupin down by 1.03% were the top losers.

Asian markets were trading mixed, KOSPI Index gained 7.13 points or 0.34% to 2,120.85, Hang Seng was higher by 67.24 points or 0.24% to 27,658.49, Shanghai Composite surged by 106.61 points or 2.49% to 4,390.10, Taiwan Weighted gained 110.67 points or 1.15% to 9,716.77 and Nikkei 225 increased by 154.62 points or 0.78% to 20,044.89.

On the other hand, FTSE Bursa Malaysia KLCI declined by 9.43 points or 0.52% to 1,814.07, Straits Times lost 7.99 points or 0.23% to 3,451.58, Jakarta Composite was down by 5.15 points or 0.1% to 5,232.66.