Benchmarks trade higher; Capital Goods, Realty lead

Indian equity markets are trading in green after a flat opening encouraged by data of Industrial output for the country, which surged to 4.1 percent in April, compared to a reading of 2.1 percent month-on-month and much higher than the street expectations. However, May consumer inflation came at 5.01 percent, slightly higher than 4.87 percent in the month of April. Meanwhile, the FDI inflows into the services sector grew by over 46 per cent to $ 3.25 billion in 2014-15 as compared to $ 2.22 billion in 2013-14. At present, Sensex and Nifty were trading above the crucial 26,550 and 8,000 levels respectively, with gains of over half a percent. Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by 0.72% and 0.84% respectively.

Some support also came with Met department report that the country has received 5% more rainfall than the normal limit till now even as northwest India, the southern peninsula and central India have received below normal rainfall. However gains remained capped on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 670.96 crore on June 12, 2015 as per provisional data released by the stock exchanges. Further investors’ sentiment will remain cautious ahead of the US FOMC meet which is a key economic event and is likely to decide the timeframe for the Fed rate hike.

On the global front, the US markets ended lower as concerns about Greece’s stalled negotiations with its international creditors weighed on sentiments following reports that the International Monetary Fund has halted bailout talks. Asian markets were trading lower following losses on Wall Street and as sentiment took a hit from the collapse of Greece's debt talks, boosting the chances it will default and exit the eurozone.

Back home traders were seen piling position in Capital Goods, Realty, Healthcare, Auto and Oil & Gas. The market breadth on BSE was positive in the ratio of 1088: 605 while 51 scrips remained unchanged.

The BSE Sensex is currently trading at 26596.17, up by 170.87 points or 0.65% after trading in a range of 26307.84 and 26614.30. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.72%, while Small cap index gained 0.84%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.40%, Realty up by 1.05%, Healthcare up by 0.91%, Auto up by 0.58% and Oil & Gas up by 0.53%, while there were no losers.

The top gainers on the Sensex were Sun Pharma Inds. up by 2.33%, Larsen & Toubro up by 1.82%, HDFC up by 1.41%, BHEL up by 1.19% and Mahindra & Mahindra up by 0.98%. On the flip side, NTPC down by 0.29%, GAIL India down by 0.23%, TCS down by 0.14%, Cipla down by 0.03% and Bajaj Auto down by 0.03% were the top losers.

Meanwhile, in a move that could raise consolidation moves among telecom companies, the telecom department has given its final clearance to long-awaited rules on sharing and trading of airwaves at a meeting of the Telecom Commission, the highest decision making body of the telecom department. Though, the rules still need Cabinet's approval to become operative.

For the operators, trading allows to sell airwaves that they aren't utilising, offering an exit route for struggling ones, while through sharing, operators can pool in their spectrum resources to create a larger bank and each partner can use the airwaves from the pool as per its needs.

On the same time, the move will be helpful for the consumers in lower call drops and will result in better quality of voice services and faster data speeds, as sharing could reduce traffic congestion on the network. Also, as sharing of spectrum could allow operators to cut down on capital expenditure, they could pass on the benefit to subscribers through lower tariffs.

The Trai had earlier recommended telcos will be able to share spectrum acquired through trading. It had also suggested allowing two telcos to share any category - 2G, 3G or 4G - of similar spectrum in a circle, including airwaves allotted through government-set prices before the current auction process started. However, it didn't recommend sharing by internet service providers. It had though stated that in case of trading there would be a 1% transfer fee on the transactional amount or prescribed market price, whichever is higher, and payable by the seller to the government.

The CNX Nifty is currently trading at 8019.95, up by 37.05 points or 0.46% after trading in a range of 7944.85 and 8034.60. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 2.16%, Larsen & Toubro up by 1.96%, HCL Tech. up by 1.83% and Asian Paints up by 1.68% and HDFC up by 1.27%. On the flip side, Power Grid down by 2.44%, Bank of Baroda down by 0.85%, Ultratech Cement down by 0.60%, Ambuja Cement down by 0.48% and Kotak Mahindra Bank down by 0.47% were the top losers.

Asian markets were trading in red; Hang Seng decreased 382.98 points or 1.4% to 26,897.56, Nikkei 225 decreased 113.2 points or 0.55% to 20,293.88, Shanghai Composite decreased 79.55 points or 1.54% to 5,086.80, Jakarta Composite decreased 56.64 points or 1.15% to 4,879.18, Straits Times decreased 34.04 points or 1.01% to 3,319.81,Taiwan Weighted decreased 33.33 points or 0.36% to 9,268.60, KOSPI Index decreased 7.3 points or 0.36% to 2,044.87 and FTSE Bursa Malaysia KLCI decreased 3.43 points or 0.2% to 1,730.94.