Benchmarks recover their initial losses; Nifty holds 8000 level

After making a soft opening, benchmarks have recovered their initial losses and turned into positive territory in morning deals on account of strength in banking stock after RBI asked banks to take over management of loan defaulters in the view of restructuring the ailing banks. Sentiments got some boost with the Union Minister of Shipping Nitin Gadkari chalking out a plan to raise Rs 1-lakh crore to develop ports, build ships and improve inland waterways. The amount would be raised in the dollar equivalent at an interest of three per cent. Further, some support also came in with the statement of Prime Minister Narendra Modi, who stated that India must quickly expand its irrigation network and improve water usage to offset the impact of less monsoon rainfall than usual. However gained remained capped on reports that foreign institutional investors were net sellers in Indian equities worth Rs 749 crore on June 8, 2015 as per provisional stock exchange data. Traders were seen piling position in Bankex, Consumer Durables, Capital Goods, Metal and PSU while, selling was witnessed in Healthcare, Realty, TECK, Auto and INFRA.  

In scrip specific development, Vedanta was trading higher on report of a possible merger talk of Cairn India with Vedanta. The merger would help Vedanta become a global major and compete with companies such as Rio Tinto and BHP Billiton.

On the global front, the US markets made a lower closing in last session in a listless trading on renewed fears the Federal Reserve will soon raise interest rates. The Asian markets have made mostly a lower start, tracking the losses on Wall Street. Also China inflation data fanned concern demand is cooling in the world’s second-biggest economy.

Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,050 and 26,550 levels respectively. The market breadth on BSE was negative in the ratio of 771: 823 while 87 scrips remained unchanged.

The BSE Sensex is currently trading at 26526.58, up by 3.49 points or 0.01% after trading in a range of 26446.50 and 26585.90. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.27%, while Small cap index was up by 0.01%.

The gaining sectoral indices on the BSE were Bankex up by 0.37%, Consumer Durables up by 0.37%, Capital Goods up by 0.28%, Metal up by 0.21% and PSU up by 0.09% while, Healthcare down by 0.88%, Realty down by 0.42%, TECK down by 0.40%, Auto down by 0.39% and INFRA down by 0.23%, were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 1.91%, Axis Bank up by 1.19%, HDFC up by 0.77%, ICICI Bank up by 0.69% and Vedanta up by 0.65%. On the flip side,

Tata Steel down by 1.67%, Sun Pharma down by 1.40%, Bharti Airtel down by 1.38%, Cipla down by 1.23% and Dr. Reddys Lab down by 1.21% were the top losers.

Meanwhile, global ratings agency Moody's in its latest report has said that steel prices in India are expected to remain under pressure in the current fiscal, but the demand is expected to pick up with an uptick in commercial vehicle sales.

During April-March 2014-15, crude steel production grew by almost 8 per cent to 88.124 MT year-on-year, though India imported 9.321 million tonnes (MT) of steel in April-March 2014-15, an increase of 71 per cent over 2013-14, making it a net importer for the last fiscal. Moody’s however stated that it do not foresee steel imports coming down anytime soon and so there may be pressure on the prices in 2015-16 fiscal.

Moody's has said that subdued domestic demand and rise in imports from China, Russia and Korea had exerted pressure on steel realisations in the last fiscal, however the rating agency expects steel demand to pick up in 2015-16 on the back of an uptick in commercial vehicles sales, particularly the medium and heavy commercial vehicles (M&HCV).

The rating agency sounded upbeat on the performance of two major players in the domestic market -- Tata Steel and JSW Steel -- in 2015-16, saying that the worst phase for the two is over, adding that Tata Steel’s total deliveries in 2014-15 fiscal stood at 26.32 MT, whiles sales of JSW Steel stood at 12.03 MT during the same period. It also said that both companies have been performing better than the market average in terms of steel price realization.

The CNX Nifty is currently trading at 8035.90, down by 8.25 points or 0.10% after trading in a range of 8013.40 and 8057.15. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.95%, Axis Bank up by 1.21%, Yes Bank up by 1.11%, HDFC up by 0.96% and PNB up by 0.69%. On the flip side, Cairn India down by 4.64%, Bosch down by 1.92%, Idea Cellular down by 1.81%, Bharti Airtel down by 1.63% and Tata Steel down by 1.52% were the top losers.

Asian markets were trading in red; Hang Seng decreased 251.05 points or 0.92% to 27,065.23, Nikkei 225 decreased 179.87 points or 0.88% to 20,277.32, Jakarta Composite decreased 122.05 points or 2.43% to 4,892.94, Taiwan Weighted decreased 109.1 points or 1.16% to 9,259.33, Shanghai Composite decreased 63.31 points or 1.23% to 5,068.57, Straits Times decreased 7.98 points or 0.24% to 3,312.35, FTSE Bursa Malaysia KLCI decreased 7.26 points or 0.42% to 1,732.19 and KOSPI Index decreased 6.79 points or 0.33% to 2,058.40.