Benchmarks continue to hold their head above water

After positive opening, Indian equity benchmarks continued to hold their head above water on sustained and selective buying by funds and retail investors amid hopes of rate cut by the Reserve Bank of India after weak IIP numbers. The industrial production grew by 2.7% in May 2015 against expectations of 4.4%, led by a sharp fall in capital goods and consumer goods data. Sentiments got some support with Finance Minister Arun Jaitley’s statement that tax revenues are expected to be higher this year while improving macroeconomic fundamentals and ongoing reforms make 8-10 per cent growth eminently achievable. Some support also came with Chief Economic Advisor Arvind Subramanian’s statement that Indirect tax revenues grew 37.5% in the first quarter of current fiscal, which reflects a healthy growth in the economy. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 465.27 crore on July 10, 2015. Meanwhile, some investors remained on the sidelines and refrained from any buying activity ahead of the Consumer Price Index data (CPI) to be released later in the day.

On global front, Asian markets were trading mostly in green on Monday, extending a recovery from turmoil last week, but attention remained nervously focused on a teetering Greece as investors awaited word whether a bailout deal with European creditors can be reached. Back home, Indian rupee depreciated by 9 paise to trade at 63.48 against the dollar due to fresh demand from importers and gains in the American currency against major currencies globally.

Back on street, stocks from Oil & Gas, Teck and IT counters were supporting the markets’ uptrend, while those from Metal, Capital Goods and Banking counters was adding to the underlying cautious undertone. In scrip specific development, Shares of PVR surged after the company’s shareholders approved the issue of five million equity shares of the company at Rs 700 per share to private equity firm on a preferential basis. Furthermore, Suven Life Sciences rose after the company secures 4 Product Patents for their NCE's in China, Mexico and South Africa.

The market breadth on BSE was positive, out of 2281 stocks traded, 1373 stocks advanced, while 806 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27678.38, up by 16.98 points or 0.06% after trading in a range of 27666.72 and 27791.21. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43%, while Small cap index up by 0.68%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.75%, TECK up by 0.74%, IT up by 0.61%, Consumer Durables up by 0.32% and FMCG up by 0.28%, while Metal down by 0.76%, Capital Goods down by 0.49%, Bankex down by 0.25%, Realty down by 0.17% and Infrastructure down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.83%, Cipla up by 1.62%, Bharti Airtel up by 1.50%, Sun Pharma Inds. up by 1.45% and Maruti Suzuki up by 1.12%. On the flip side, Hindalco down by 1.96%, Vedanta down by 1.37%, Larsen & Toubro down by 1.08%, SBI down by 0.94% and ONGC down by 0.87% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has expressed his confidence on the country’s higher economic growth and said that tax revenues are expected to be higher this year while improving macroeconomic fundamentals and ongoing reforms make 8-10 per cent growth “eminently achievable”.

FM elaborated that with the ongoing reform process, proposed GST, increased infrastructure investment and emphasis on smart cities, India can very much achieve 8-10 per cent GDP growth. “When all these initiatives get onto the field, then our aspiration to cross that 8 per cent level and get on to the 8-10 per cent growth target is not something which is completely out of sight, but is something which may be imminently achievable.”  He emphasized that “We need higher growth on one hand and we need to flag the concerns of the economy in those sections where the benefits of that growth process must reach first.” “And I can tell you that this is only the beginning... I am full confident that with the economy likely to move up in the next few years, resources will be available...

Jaitley added that the government is working on a new agriculture insurance scheme to ensure farmers are not left at the mercy of rains, even as he hoped 'rain gods will be kinder this year' and help check the prices of pulses and other food products. He said the government has taken a number of initiatives, including the recently announced Rs 50,000 crore programme for a national irrigation.

Finance Minister also promised more sustainable measures for the farm sector so that the farmers are not left to the mercy of rain gods and said hopefully, in the near future, a viable and vibrant insurance scheme will be in place for farmers.

The CNX Nifty is currently trading at 8364.05, up by 3.50 points or 0.04% after trading in a range of 8362.20 and 8404.80. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.94%, Asian Paints up by 2.86%, BPCL up by 1.96%, HCL Tech. up by 1.85% and Cipla up by 1.54%. On the flip side, Hindalco down by 2.10%, Yes Bank down by 1.98%, Vedanta down by 1.61%, Larsen & Toubro down by 1.36% and ONGC down by 1.04% were the top losers.

Asian markets were trading mostly in green; Straits Times was up by 0.45%, KOSPI Index up by 1.37%, Jakarta Composite up by 0.56%, Hang Seng up by 0.32%, Shanghai Composite up by 2.99%, Taiwan Weighted up by 1.32% and Nikkei 225 up by 1.58%. On the flip side, FTSE Bursa Malaysia KLCI was down by 0.12%.