Benchmarks continue to trade higher in a tight range

Indian equity benchmarks continue to trade in tight-band in afternoon deals with a gain of around half a percent. Sentiments remained up-beat after industrial production growth accelerated to a two-month high of 4.1 percent in April 2015 against 2.1 percent in the month before, affirming that broad economic activity was on the mend. Meanwhile, wholesale price index (WPI) for the month of May stood at -2.36% versus -2.65% in the previous month with food articles inflation quoting at 3.8% against 5.73% last month.

On the global front, Asian markets were trading in red at this point of time amid concerns of a possible Greek default. Investors also remained watchful of the FOMC meeting, which is scheduled this week and will likely decide the timeframe for a Fed rate hike. European counters have made a weak start and were trading in red in early deals. Back home, on the sectoral front, healthcare, capital goods and oil and gas witnessed the maximum gain in trade, while power, banking and metal remained the top losers on the BSE sectoral space. The broader indices too were trading in line with benchmarks, while the market breadth on the BSE was positive; there were 1326 shares on the gaining side against 983 shares on the losing side while 112 shares remain unchanged.

The BSE Sensex is currently trading at 26552.91, up by 127.61 points or 0.48% after trading in a range of 26307.84 and 26614.30. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index up by 0.63%.

The gaining sectoral indices on the BSE were Healthcare up by 1.28%, Capital Goods up by 0.91%, Oil & Gas up by 0.71%, Auto up by 0.68% and TECK up by 0.46%, while Power down by 0.57%, Bankex down by 0.47%, Metal down by 0.37%, Consumer Durables down by 0.32%, PSU down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.92%, Mahindra & Mahindra up by 2.12%, ONGC up by 1.41%, Larsen & Toubro up by 1.27% and Reliance Industries up by 1.18%. On the flip side, Tata Power down by 1.24%, SBI down by 1.10%, NTPC down by 1.10%, Vedanta down by 1.09% and Hindalco down by 0.77% were the top losers.

Meanwhile, giving a light of hope to the Public Sector Bank (PSU), the Finance Minister Arun Jaitley has promised more capital infusion into public sector banks, saying there's “merit” in their demand for more funds over and above what was provided in the Budget. He further added that 'Banks have made a strong case for additional capital... And over the next few months, this is something the government is going to seriously look at. The Minister also said that banks are free to take decision on tapping the market at an opportune time taking into account the market conditions and stability.

The government has earmarked Rs 7,940 crore in the Budget for recapitalisation of PSU banks for the current fiscal. Last fiscal, the government infused Rs 6,990 crore in nine public sector banks based on their performance.

The issue of additional capital requirement was also flagged by the Reserve Bank in view of mounting bad loans and support growth. RBI Deputy Governor S S Mundra had said the Budget amount marked for recapitalisation of PSU banks is not adequate and RBI has asked the Finance Ministry to raise the quantum of assistance in view of mounting bad loans and support growth.

Meanwhile, the Finance Ministry is likely to finalise additional capital requirement, over and above budget provision, for public sector banks in the next three months and the exercise of getting representations from individual banks for additional capital requirement would be completed by first week of July.

The CNX Nifty is currently trading at 8002.50, up by 19.60 points or 0.25% after trading in a range of 7944.85 and 8034.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 2.89%, Cairn India up by 2.57%, Mahindra & Mahindra up by 2.32%, HCL Tech up by 1.67% and Zee Entertainment up by 1.53%. On the flip side, Kotak Mahindra Bank down by 3.67%, Power Grid down by 2.96%, Bank Of Baroda down by 1.84%, Indusind Bank down by 1.61% and Tata Power down by 1.51% were the top losers.

The Asian markets were trading in red; Hang Seng declined 400.7 points or 1.47% to 26,879.84Shanghai Composite tumbled 90.07 points or 1.74% to 5,076.28, Jakarta Composite dropped 54.04 points or 1.09% to 4,881.77, Taiwan Weighted dipped 42.45 points or 0.46% to 9,259.48, Straits Times decreased 33.33 points or 0.99% to 3,320.52, Nikkei 225 slipped 19.29 points or 0.09% to 20,387.79, KOSPI Index shed 9.85 points or 0.48% to 2,042.32 and FTSE Bursa Malaysia KLCI was down by 2.98 points or 0.17% to 1,731.39.

European Markets were trading in the red; Germany’s DAX dropped 1.51%, UK’s FTSE declined 0.56% and France’s CAC was down by 1.25%.