Benchmarks erases all gains; slip into red zone

After making a positive start, benchmark equity indices have now slipped into negative territory and trading with slender loss as funds and retail investors engaged in reducing positions ahead of IIP data to be released later in the day. The sentiments were distrustful as the country experienced decline in rainfall in July and almost all regions except the north-west have started registering negative precipitation. According to the India Meteorological Department (IMD) from June 1 until July 8, the country has registered an overall deficit rainfall of four per cent. Sentiment on the street weakened further on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 254 crore on July 9, 2015. Investors remained cautious on account of the volatility in the Chinese markets and the unfolding developments with regard to Greece's future in the Euro zone. However, losses remained capped with an IMF report that India will be the world’s fastest growing economy for the second consecutive year in 2016 at 7.5 percent. IMF has retained India’s growth projection for current year at 7.5 percent which will be higher than China’s 6.8 percent. 

On global front, Asian markets were trading mostly in green as the Greek government proposed a broad financial overhaul to its creditors and Beijing's attempts to arrest a sharp slide in the Chinese market appeared to be working. Back home, Indian rupee strengthened by 6 paise to 63.33 against the US dollar in early trade after the greenback weakened overseas after Greece submitted a fresh bailout plan.

Back on street, stocks from Capital Goods, Metal and Banking counters were supporting the markets’ uptrend, while those from FMCG, Realty and Teck counters was adding to the underlying cautious undertone. In scrip specific development, shares of KEC International have surged after the company has secured new orders worth Rs 622 crore in its transmission & distribution, and cables business. On the other hand, shares of R S Software India have declined after reporting 26% quarter-on-quarter (Q-o-Q) fall in consolidated net profit at Rs 11.10 crore for the quarter ended June 2015.

The market breadth on BSE was positive, out of 2273 stocks traded, 1207 stocks advanced, while 975 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27555.04, down by 18.62 points or 0.07% after trading in a range of 27555.04 and 27729.46. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index up by 0.10%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.51%, Metal up by 0.34%, Bankex up by 0.26% and Auto up by 0.07%, while FMCG down by 0.97%, Realty down by 0.46%, TECK down by 0.44%, Consumer Durables down by 0.40% and Infrastructure down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.94%, Coal India up by 1.31%, Tata Motors up by 1.13%, Sun Pharma Inds. up by 1.11% and ICICI Bank up by 0.99%. On the flip side, Hindustan Unilever down by 2.95%, Bharti Airtel down by 2.33%, NTPC down by 2.02%, GAIL India down by 1.70% and TCS down by 1.54% were the top losers.

Meanwhile, International Monetary Fund (IMF) in its World Economic Outlook Update has said that India will be the world’s fastest growing economy for the second consecutive year in 2016 at 7.5 per cent. The global agency though lowered its current year global economy growth forecast to 3.3 per cent, but it retained India’s growth projection for current year at 7.5 per cent which will be higher than China’s 6.8 per cent. It forecast a growth rate of 7.5 per cent for India in 2016 as well, as against China’s 6.3 per cent.

For India, IMF follows data for fiscal year ending March, while for other countries it considers the December-ending periods. It has retained the projection made earlier in April for both India and China and said that in emerging market economies the continued growth slowdown reflects several factors, including lower commodity prices and tighter external financial conditions, structural bottlenecks, rebalancing in China, and economic distress related to geopolitical factors. Growth in emerging market and developing economies has been estimated at 4.2 per cent in 2015, down 0.1 per cent from the projection made April.

IMF has said that “Global growth is projected at 3.3 per cent in 2015, marginally lower than in 2014 and 0.2 percentage point below what it predicted in April, with a gradual pickup in advanced economies and a slowdown in emerging market and developing economies. In 2016, growth is expected to strengthen to 3.8 per cent.”

It said that rebound in activity in a number of distressed economies is expected to result in a pickup in growth in 2016. Though, it pinned much of the blame for the lower growth forecast on the United States and said it expected the US economy to grow 2.5 percent this year. Surprisingly, the IMF maintained its forecasts for a pickup in growth in the euro zone, despite Greece moving ever closer to the edge of default and an exit from the currency bloc.

The CNX Nifty is currently trading at 8325.30, down by 3.25 points or 0.04% after trading in a range of 8323.00 and 8376.35. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.62%, Vedanta up by 1.98%, BPCL up by 1.52%, Cairn India up by 1.42% and Coal India up by 1.33%. On the flip side, Hindustan Unilever down by 3.24%, Idea Cellular down by 2.61%, Bharti Airtel down by 2.60%, NTPC down by 1.79% and Asian Paints down by 1.66% were the top losers.

Asian markets were trading mostly in green; KOSPI Index was up by 0.04%, FTSE Bursa Malaysia KLCI up by 0.76%, Straits Times up by 0.5%, Jakarta Composite up by 0.66%, Shanghai Composite up by 4.75% and Hang Seng up by 1.77%. On the flip side, Taiwan Weighted was down by 0.69% and Nikkei 225 was down by 0.11%.