Benchmarks continue to trade in red in late morning session

After getting a cautious start, Indian equity bourses made some attempts to claw back into the green zone in late morning trades but profit booking at higher levels dragged the key indices once again into negative territory.  Sentiments remained down-beat as the rate cuts hope by Reserve Bank of India was dampened after retail inflation surged to eight-month high of 5.4 per cent in June, compared to 5.01 percent in May and 6.77 percent in June last year, mainly due to costlier food items. As per the data of Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation the Consumer Food Price Index (CFPI) increased to 5.48 percent in June compared to 4.80 percent in May and 7.21 percent in June 2014. However, losses remained capped with India Ratings retaining its 7.7 percent growth forecast for this year but calling for continuous government interventions to fill the deficits in physical and social infrastructure spaces for long-term higher growth. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 527.98 crore on July 13, 2015. Meanwhile, some investors remained on the sidelines and refrained from any buying activity ahead of WPI inflation data to be released later in the day.

On global front, Asian stock markets are mostly higher, joining the global rally following news that Greece and its international creditors have finally reached an agreement on a new bailout for the debt-laden country.  Overnight, both the Dow and Nasdaq closed above their 50-day moving averages for the first time since June. Back home, Indian rupee fell marginally by 5 paise to 63.57 against the US dollar in early trade on increased demand for the American currency from importers.

Back on street, stocks from Metal, Capital Goods and PSU counters were supporting the markets’ uptrend, while those from Auto, IT and Teck counters was adding to the underlying cautious undertone. In scrip specific development, Shares of Petron Engineering surged after the company reported more than three-fold jump in net profit of Rs 10.04 crore for the first quarter ended June 30, 2015 on the back of higher operational income and other income. Furthermore, Ramco Systems rose after the company signed multi-million dollar tech transformation deal with Cobham Aviation Services.

The market breadth on BSE was positive, out of 2335 stocks traded, 1383 stocks advanced, while 857 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27935.11, down by 26.08 points or 0.09% after trading in a range of 27877.56 and 27995.04. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index up by 0.66%.

The top gaining sectoral indices on the BSE were Metal up by 0.91%, Capital Goods up by 0.71%, PSU up by 0.63%, Infrastructure up by 0.55% and Power up by 0.55%, while Auto down by 0.51%, IT down by 0.24%, TECK down by 0.18% and Bankex down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.11%, Hero MotoCorp up by 1.30%, Dr. Reddys Lab up by 1.23%, BHEL up by 1.19% and Lupin up by 0.79%. On the flip side, Tata Motors down by 1.85%, TCS down by 0.66%, Hindalco down by 0.66%, HDFC down by 0.54% and Reliance Industries down by 0.52% were the top losers.

Meanwhile, in its bid to safeguard the retail investors from excessive speculation through the derivatives route, the market regulator Securities and Exchange Board of India (SEBI) has increased the minimum contract size in the equity derivatives segment to Rs 5 lakh, from the present, minimum contract size of Rs 2 lakh. It’s for the first time since the launch of derivatives in June 2000 that SEBI has proposed the review of the minimum contract size.

In its latest circular, modifying the circular dated January 08, 2010, SEBI stated that “The lot size for derivatives contracts in equity derivatives segment shall be fixed in such a manner that the contract value of the derivative on the day of review is within Rs 5 lakhs and Rs 10 lakhs”. The revision will be made effective from the next trading day after expiry of October 2015 contracts.

The circular further specified that for stock derivatives with minimum lot sizes of 50, the subsequent lot sizes will be fixed as a multiple of 25. But if the contract value of the minimum lot size of 50 is more than Rs 10 lakhs, then subsequent lot size will be a multiple of 5, provided the lot size is not below 10. “For index derivatives, the lot size (in units of underlying) shall be fixed as a multiple of 5, provided the lot size is not less than 10.”

SEBI further stated that the stock exchanges shall jointly ensure that the lot size is same for an underlying traded across exchanges. The stock exchanges will also have to review the lot size once in every 6 months based on the average of the closing price of the underlying for last one month and wherever warranted, revise the lot size by giving an advance notice of at least 2 weeks to the market. If the revised lot size is higher than the existing one, it will be effective for only new contracts. In case of corporate action, the revision in lot size of existing contracts shall be carried out as per SEBI circular dated December 18, 2002.

The CNX Nifty is currently trading at 8452.70, down by 6.95 points or 0.08% after trading in a range of 8433.35 and 8470.60. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.14%, Dr. Reddys Lab up by 1.32%, BHEL up by 1.26%, Hero MotoCorp up by 1.23% and BPCL up by 1.02%. On the flip side, Tata Motors down by 1.89%, TCS down by 0.74%, HCL Tech. down by 0.71%, Hindalco down by 0.70% and Ultratech Cement down by 0.63% were the top losers.

Asian markets were trading mostly in green; KOSPI Index was up by 0.09%, Straits Times up by 0.05%, FTSE Bursa Malaysia KLCI up by 0.49%, Jakarta Composite up by 0.47%, Taiwan Weighted up by 0.41% and Nikkei 225 up by 1.67%. On the flip side, Hang Seng was down by 0.64% and Shanghai Composite was down by 0.71%.