Markets trade in fine fettle; Capital goods lead

Indian markets after some initial hiccups have gathered steam and were trading with gains of over half a percent in the early noon trade with Sensex comfortably sailing over 26500 level and Nifty reclaiming its crucial 8000 mark. In the early deals, traders amid week regional cues were a bit cautious about the mixed economic data but signs of recovery in monsoon trend have given some encouragement to the markets. Farmers have begun sowing kharif crops like paddy in irrigated areas and the activity is expected to pick up in rain-fed areas in the coming days as monsoon progresses. Back on street, amid across the board buying the broader indices were going neck-in-neck to the benchmarks, while barring some weakness in the banking stocks all other sectoral indices were trading higher on the BSE. The major gains was led by the capital goods stocks, after IIP data showed sector’s growth surged to 11.1 percent in April indicating an uptick in demand. Banks were under pressure despite public banks and private sector banks unanimously expressing at a meeting between Finance Minister Arun Jaitley that in a period of 2-3 months, greater transmission of lower rates by commercial banks could be seen, while Finance Minister Arun Jaitley promising more capital infusion into public sector banks.  Going further traders will be taking cues from data on the first installment of advance tax payment by corporate taxpayers on likely Q1 June 2015 corporate earnings, once it starts trickling in.

The BSE Sensex is currently trading at 26571.23, up by 145.93 points or 0.55% after trading in a range of 26307.84 and 26614.30. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index gained 0.73%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.01%, Auto up by 0.88%, Oil & Gas up by 0.78%, TECK up by 0.62%, IT up by 0.60%, while Power down by 0.55%, Bankex down by 0.39% and Metal down by 0.07%, were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds up by 3.08%, Mahindra & Mahindra up by 1.71%, ONGC up by 1.58%, Wipro up by 1.34% and Larsen & Toubro up by 1.29%. On the flip side, Tata Power down by 1.52%, NTPC down by 1.10%, SBI down by 0.89%, Vedanta down by 0.60% and Hindalco down by 0.56% were the top losers.

Meanwhile, inflation based on consumer price index (CPI) moved up slightly to 5.01% in May 2015 from 4.87% in April 2015, while food items inflation declined, an increase in inflation for transportation and communication contributed to the rise in overall CPI inflation. Even in food items fruits and vegetables eased during the month but the costlier pulses were a concern. Prices of pulses rose by 16.62% in May 2015 over the same month last year. The overall food inflation fell to 4.8% during the month, from 5.11% in April 2015.

As per the data released by the Ministry of Statistics and Programme Implementation, the corresponding provisional Consumer Price Index (CPI) for rural area was 5.52% and urban area 4.41% in May 2015, as against 5.29% and 4.36% in April 2015. The General Indices (Provisional) for the month of May 2015 for Rural, Urban and Combined stood 122.4, 120.7 and 121.6, respectively. The Consumer Food Price Index (CFPI) for Rural, Urban and Combined for the same month stood 123.8, 125.7 and 124.5 respectively. The core CPI inflation rose to 4.4% in May 2015 from 4% in April 2015 and 3.9% in March 2015.

Product wise, the inflation for fruit and vegetables was 3.84% and 4.64%, respectively, milk and its products were costlier by 7.43% in May 2015 over the same month last year. Prices of protein-rich items such as 'meat and fish' rose by 5.43%, while spices were costlier by 8.82%. Among other, oils and fats prices rose by 1.95%, cereals and products by 1.98%, while that of egg declined by 0.78% in May 2015.

The consumer price index-based inflation showed a marginal uptick  to a three-month high, but was on expected line and the major solace was that the last two readings have shown that food prices are not flaring up despite adverse weather conditions, given the outlook for uneven monsoon distribution. Also, it will go down well with the Reserve Bank, which tracks retail inflation as a benchmark for its monetary policy and had said earlier this month that price rise was still a worry, expecting inflation to rise to 6% by January 2016.

The CNX Nifty is currently trading at 8013.85, up by 30.95 points or 0.39% after trading in a range of 7944.85 and 8034.60. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds up by 3.30%, Cairn India up by 2.46%, HCL Tech. up by 2.14%, Mahindra & Mahindra up by 1.97% and ONGC up by 1.81%. On the flip side, Power Grid Corpn down by 2.99%, Kotak Mahindra Bank down by 2.91%, Bank Of Baroda down by 1.33%, Indusind Bank down by 1.21% and Tata Power down by 1.17% were the top losers.

The Asian markets were trading lower, Hang Seng slumped by 309.34 points or 1.13% to 26,971.20, Jakarta Composite was down by 58.29 points or 1.18% to 4,877.52, Taiwan Weighted lost 42.45 points or 0.46% to 9,259.48, Straits Times lost 33.19 points or 0.99% to 3,320.66, Nikkei 225 was lower by 19.29 points or 0.09% to 20,387.79, Shanghai Composite declined by 14.05 points or 0.27% to 5,152.30, KOSPI Index lost 9.85 points or 0.48% to 2,042.32 and FTSE Bursa Malaysia KLCI was tad lower by 2.91 points or 0.17% to 1,731.46.