Benchmarks trade higher led by Capital Goods and Auto

After making a positive start, Indian equity benchmarks extended their gains and are now trading above half a percent on sustained buying by funds and retail investors, which lifted both Sensex and Nifty above crucial 28,150 and 8,500 levels respectively. Sentiment turned positive after Finance Minister Arun Jaitley said that the Centre was planning to spend Rs 50,000 crore on the farming and irrigation sector and plans were also afoot to roll out an insurance scheme exclusively for the farming sector to compensate for crop loss. Furthermore, government will soon set up a trade facilitation council comprising members of the Centre and states to promote India’s overseas shipments. Some support also came on reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 269.90 crore on July 14, 2015, as per provisional data released by the stock exchanges.    

On the global front, the US markets ended higher as investors took stock of disappointing June retail sales numbers and how the data factor into the Federal Reserve’s plans for a rate hike. Asian markets were trading mixed and the Chinese shares declined despite upbeat economic data.

Back home, all the sectoral indices are trading in the positive terrain, led by Capital Goods, Auto, INFRA and Metal. The market breadth on BSE was positive in the ratio of 1368:468, while 70 scrips remained unchanged.

The BSE Sensex is currently trading at 28156.04, up by 223.14 points or 0.80% after trading in a range of 27986.48 and 28173.21. There were 29 stocks advancing against 1 stocks declining on the index

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index gained 0.71%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.01%, Auto up by 0.95%, INFRA up by 0.85%, Metal up by 0.85% and Realty up by 0.83%, while there were no losers.

The top gainers on the Sensex were Maruti Suzuki up by 2.03%, Mahindra & Mahindra up by 1.39%, ONGC up by 1.38%, Wipro up by 1.38% and Reliance Industries up by 1.21%. On the flip side, GAIL India down by 0.52% was the only loser.

Meanwhile, global rating agency Moody’s while changing the outlook for Asian steel industry to negative from stable has projected an increase in demand for steel in India due to strong economic growth. Moody’s said “the country's relatively strong economic growth and the government's plan to revive infrastructure spending and increased steel consumption in the manufacturing sector will boost the country's steel demand”.

The rating agency expects India to post mid single digit steel demand growth up from 2.2 % in 2014. It has further stated that in order to capture this growth India’s largest steel manufacturers SAIL, Tata Steel and JSW Steel will be adding production capacity in the next one to two years. Further it projected that owing to captive iron ore supplies and due to rise in domestic demand, the profitability of the steel companies such as Tata steel, JSW steel will remain highest in the region. The first sales of steel from Tata Steel’s new plant at Odisha will come on stream in the spring of 2015, which will add 30 per cent more capacity to its highly profitable operations. According to the latest data by the Joint Plant Committee under the Steel Ministry, India’s steel consumption grew 7.1% to 20.10 million tonnes in the first quarter of 2015.16, helped by cheaper imports and increased production of saleable steel.

Talking about China, Moody’s expects the largest producer for steel situation to worsen further due to steady production and slowing demand. Chinese steelmakers, who account 70% for Asian steel demand, will be affected due to weakening trends in real estate, infrastructure and manufacturing. Consequently, the demand of steel from South Asia and India is likely to increase.

The CNX Nifty is currently trading at 8509.00, up by 54.90 points or 0.65% after trading in a range of 8462.95 and 8509.45. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 2.06%, Wipro up by 1.56%, Zee Entertainment up by 1.52%, ONGC up by 1.36% and Mahindra & Mahindra up by 1.30%. On the flip side, BPCL down by 1.30%, HCL Tech. down by 0.97%, GAIL India down by 0.51% and Power Grid Corpn. down by 0.04% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 3.5 points or 0.2% to 1,724.60, KOSPI Index increased 7.3 points or 0.35% to 2,066.53, Straits Times increased 14.11 points or 0.43% to 3,330.61 and Nikkei 225 increased 74.62 points or 0.37% to 20,459.95,

On other hand, Shanghai Composite decreased 94 points or 2.4% to 3,830.49, Hang Seng decreased 86.41 points or 0.34% to 25,034.50, Jakarta Composite decreased 39.94 points or 0.81% to 4,861.87and Taiwan Weighted decreased 15.22 points or 0.17% to 9,026.54.