Benchmarks trade slightly in the red in early deals on Tuesday

After sharp gains in last session, Indian equity benchmarks are trading slightly in the red in early deals on Tuesday on account of rise in CPI inflation for June, which surged to eight month high of 5.4 percent, mainly due to costlier food items and can limit the room for RBI to cut rates next month. Some cautious also prevailed ahead of WPI inflation data to be released later in the day. Furthermore, depreciation in Indian rupee against dollar was weighing down the sentiments. The rupee opened lower at 63.57 per dollar, down 7 paise, on Tuesday against the previous day's close of 63.50. At present, Both Sensex and Nifty were trading below the crucial 27,950 and 8,450 levels respectively, with losses of around 0.20% percent. However losses remained capped on reports that Foreign portfolio investors (FPIs) bought shares worth a net Rs 527.98 crore on July 13, 2015, as per provisional data released by the stock exchanges.

In scrip specific development, IIFL Holdings was trading higher after FIH Mauritius Investments, a wholly-owned subsidiary of Fairfax India Holdings Corporation made an open offer at a price of Rs 195 per share. Ramco Systems was also trading higher after the company signed a multi-million dollar tech transformation deal with Cobham Aviation Services.

On the global front, the US markets ended higher after euro zone leaders reached a tentative deal to bail out Greece. Asian markets were trading mostly in green taking cues from US counterpart.

Back home traders are seen piling position in Metal, Capital Goods, PSU, Consumer Durables and Healthcare, while selling was witnessed in Auto, IT, TECK, Bankex and Realty. The market breadth on BSE was positive in the ratio of 1142: 637, while 75 scrips remained unchanged.

The BSE Sensex is currently trading at 27901.98, down by 59.21 points or 0.21% after trading in a range of 27877.56 and 27995.04. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index up by 0.39%.

The top gaining sectoral indices on the BSE were Metal up by 0.63%, Capital Goods up by 0.38%, PSU up by 0.30%, Consumer Durables up by 0.22% and Healthcare up by 0.20%, while Auto down by 0.47%, IT down by 0.25%, TECK down by 0.18%, Bankex down by 0.02% and Realty down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.63%, Dr. Reddys Lab up by 1.40%, Cipla up by 0.95%, Lupin up by 0.60% and Axis Bank up by 0.58%. On the flip side, Tata Motors down by 1.18%, HDFC down by 1.05%, Sun Pharma down by 0.88%, ONGC down by 0.88% and Reliance Industries down by 0.79% were the top losers.

Meanwhile, thermal coal imports jumped 23% to 24.08 million tonnes at 12 major ports during the first quarter of the current fiscal, in spite of increasing domestic production of fuel. The 12 ports which handle approximately 61% of the country’s total cargo traffic (Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata) handled 19.62 MT and 8.10 MT of thermal and coking coal, respectively, for same period.

Altogether, these 12 ports handled 32.25 MT coal during the April-June quarter of the current fiscal as against 27.72 MT in the same quarter of the previous fiscal. Handling of coking coal remained flat with less than 1 % increase at 8.17 MT in that period.

The domestic requirement for thermal coal is about 80%, hence due to consistent fall in meeting the target as well as firms demand, the power plants route to imports. Coal India though recorded an increase of 32 MT in 2014-15 in coal production, but it could record barely a 31 MT increase in coal production in four years from 2010 to 2014. CIL’s production target for the current fiscal has been fixed at 550MT. Less production and due to increased demand the import is likely to increase to 185.5 MT in 2016-17, further widening the gap of demand supply in the country.

The CNX Nifty is currently trading at 8444.05, down by 15.60 points or 0.18% after trading in a range of 8433.35 and 8470.60. There were 21 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.65%, Dr. Reddys Lab up by 1.40%, BPCL up by 1.15%, Cipla up by 0.85% and Yes Bank up by 0.75%. On the flip side, Zee Entertainment down by 1.22%, Tata Motors down by 1.18%, HDFC down by 1.06%, HCL Tech. down by 0.84% and Sun Pharma Inds. down by 0.82% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 1.95 points or 0.09% to 2,063.47, Straits Times increased 4.9 points or 0.15% to 3,316.12, FTSE Bursa Malaysia KLCI increased 9.09 points or 0.53% to 1,725.20, Jakarta Composite increased 20.51 points or 0.42% to 4,914.43, Taiwan Weighted increased 36.4 points or 0.4% to 9,070.32 and Nikkei 225 increased 289.18 points or 1.44% to 20,378.95.

On the flip side, Hang Seng decreased 176.81 points or 0.7% to 25,047.20 and Shanghai Composite decreased 12.55 points or 0.32% to 3,957.84.