Markets hold the strength; Nifty over 8150 mark

Markets were continuing their rally mood in late morning session on across-the-board buying by funds as well as retail investors. The sentiments were on optimistic note from the early trade with the report that finance Minister Arun Jaitley has approved the formation of two separate committees for facilitating implementation of a nationwide Goods and Services Tax (GST) from April 1, 2016. Also, the US Federal Reserve kept the interest rates unchanged at a near zero level, which gave domestic markets some respite although the Federal Open Market Committee (FOMC) meet indicated that rates could be increased above 0.5 percent by year end. Moreover, above-normal monsoon so far and narrowing of the country's trade deficit added to the optimistic sentiments. However, gains remained capped with the report that selling by foreign institutional investors continued and they were net sellers in Indian equities worth Rs 940.91 crore on June 17, 2015.

On global front, Asian stock markets were mostly lower on Thursday after the Federal Reserve cuts its forecast for U.S. economic growth, a move that could delay Fed rate hikes but also suggests reduced American demand for Asia's exports. Back home, Indian rupee appreciated 25 paise at 63.87 against the dollar in early trade after the American currency weakened overseas amid sustained selling of the greenback by exporters and banks.

Back on street, barring Infrastructure, all other BSE sectoral indices were trading significantly in the green. Among them, Oil & Gas index was the star-performer and was up 1.61 per cent, followed by Consumer Durables up by 1.20 per cent, Banking up by 1.07 percent and Capital Goods up by 0.92 percent, while Infrastructure index was down by 0.29 percent. Moreover, shares of housing finance companies were trading higher after the Cabinet cleared Housing for All by 2022- a scheme with an interest subvention of 6.5% on housing loans to the economically weaker section (EWS). In scrip specific development, Shares of Orchid Chemicals & Pharmaceuticals have rallied after the company received nod from the United States Food and Drug Administration (USFDA) for generic anti-bacterial Gemifloxacin Mesylate tablets. On the flip side, shares of Strides Arcolab have dipped after the government has rejected proposal of pharmaceutical company.

The market breadth on BSE was positive, out of 2158 stocks traded, 1394 stocks advanced, while 677 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27085.58, up by 252.92 points or 0.94% after trading in a range of 26910.26 and 27090.84. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.73%, while Small cap index up by 1.01%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.61%, Consumer Durables up by 1.20%, Bankex up by 1.07%, Capital Goods up by 0.92% and PSU up by 0.66%, while Infrastructure down by 0.29% was the sole losing index on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.43%, HDFC Bank up by 1.61%, ICICI Bank up by 1.33%, HDFC up by 1.04% and BHEL up by 1.00%. On the flip side, Cipla down by 0.40%, Tata Steel down by 0.15% and Tata Power down by 0.14% were the top losers.

Meanwhile, Manufacturing activities are still not picking up pace, as the yearly SBI Composite Index, an indicator for manufacturing activity in the country, for June 2015 declined to 53.2 from 56.5 in May 2015, indicating moderate growth as against high growth in the previous month. The manufacturing sector growth declined in June both in terms of month-on-month as well as yearly basis amid declining exports and fall in corporate earnings. As per SBI research, the Monthly Index declined from 53.7 in May 2015 to 46.7 in June 2015.

The research has stated that the declining momentum in credit growth is likely to have started impacting and this is leading to decreasing momentum in IIP growth. 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 report noted that exports growth and SBI yearly index are correlated and with exports showing some month-on-month traction in May 2015, IIP numbers for May is likely to have kept on the positive momentum. However, on the flip side with June 2015, SBI Index reflecting a loss in m-o-m momentum it is likely that export growth may be weak going forward.

The corporate earnings too showed a disappointing trend, out of total sample of 3,961, 35.7 percent corporates are PAT (profit after tax) negative in FY15 compared with 30.7 percent in FY14 and mid-sized companies with turnover between Rs 100 crore and Rs 500 crore were the hardest hit (topline as well as bottomline), with a PAT de-growth of 84.8 percent.

The CNX Nifty is currently trading at 8152.90, up by 61.35 points or 0.76% after trading in a range of 8101.80 and 8159.30. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.30%, Asian Paints up by 2.43%, BPCL up by 2.38%, HDFC Bank up by 1.62% and PNB up by 1.55%. On the flip side, NMDC down by 0.93%, Tech Mahindra down by 0.89%, Bosch down by 0.64%, Zee Entertainment down by 0.50% and ACC down by 0.46% were the top losers.

Asian markets were mostly trading in red; Hang Seng down by 0.06%, Straits Times down by 0.46%, Shanghai Composite down by 0.18%, FTSE Bursa Malaysia KLCI down by 0.14% and Nikkei 225 down by 0.83%. On the flip side, Jakarta Composite up by 0.02%, KOSPI Index up by 0.66% and Taiwan Weighted up by 0.43%.