Benchmarks extend gains; trade near intra-day high levels

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high levels amid a rally in Auto, Realty and Metal stocks. Sentiments got a boost after the rating agency Moody's statement that the Reserve Bank is likely to cut interest rates in its upcoming monetary policy review next month despite retail inflation surging to an eight-month high in June. The absence of any negative triggers and the agreement in the Greece deal and stability in the Chinese markets could add momentum to the session. At present, Sensex and Nifty were trading above the crucial 28,150 and 8,500 levels respectively, with gains of over 0.70%. Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over 0.50%. Some support also came with Finance Minister Arun Jaitley’s statement 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. Further, Global rating agency Standard and Poor’s (S&P) in its latest report expects a stable trend in sovereign credit rating in Asia-Pacific nations, including India, despite growing economic uncertainties.

On global front, Asian markets were exhibiting mixed trend in the early deals with Shanghai stocks widening losses despite better-than-expected Chinese gross domestic product data. On Wall Street, stocks closed higher on Tuesday as an unexpected drop in June retail sales raised speculation that the Federal Reserve to delay its first interest rate hike. Back home, Indian rupee strengthened by 4 paise to 63.35 against the US dollar in early trade on selling of American currency by exporters. In scrip specific development, Shares of Adhunik Metaliks have surged after the company’s wholly owned subsidiary - Orissa Manganese & Minerals (OMML), has been granted extension of lease for its three manganese ore mines (Patmunda, Orahuri & Kusumudhi) till March 31, 2020 under merchant category. Furthermore, shares of NIIT Technologies have gained after reporting a strong 35% year-on-year (yoy) growth in its consolidated net profit at Rs 58.50 crore for the first quarter ended June 30, 2015 (Q1), on back of strong operational performance.

The market breadth on BSE was positive, out of 2458 stocks traded, 1621 stocks advanced, while 724 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28172.64, up by 239.74 points or 0.86% after trading in a range of 27986.48 and 28173.24. All the 30 stock were advancing on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.52%, while Small cap index up by 0.82%.

The gaining sectoral indices on the BSE were Auto up by 1.30%, Realty up by 1.28%, Metal up by 0.97%, Infrastructure up by 0.86%, Capital Goods up by 0.81%, while Consumer Durables down by 0.05% was the only losing index on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.45%, Tata Motors up by 1.78%, ONGC up by 1.64%, Mahindra & Mahindra up by 1.58% and Wipro up by 1.50%, while there were no losers on the Sensex.

Meanwhile, global rating agency Standard and Poor’s (S&P) in its latest report expects a stable trend in sovereign credit rating in Asia-Pacific nations, including India, despite growing economic uncertainties. The rating agency for its view of stable sovereign credit rating has given the reason of continuing US recovery, lower energy prices and still-plentiful liquidity in financial markets

In its mid-year review of the Asia-Pacific region, S&P retained India’s sovereign rating at ‘BBB-' with stable outlook as originally mentioned in its report in September 2014. It had projected India’s credit outlook as stable for the next 24 months, saying 'the new government has both willingness and capacity to implement reforms necessary to restore some of India's lost growth potential, consolidate its fiscal accounts, and permit the Reserve Bank of India to carry out effective monetary policy'.  S&P has said that rating could be raised if the economy reverts to a real per capita GDP trend growth of 5.5 per cent per year, and fiscal, external, or inflation metrics improve, while it warned that the rating could be lowered if the government’s structural reform agenda stalls such that economic growth does not accelerate, or fiscal and debt ratios fail to improve'.

According to a new report by the S&P, overall, 'global sovereign creditworthiness has declined slightly since the onset of the global financial crisis in 2008.' 'The average long-term sovereign credit rating has fallen by just over one notch to between 'BBB-' and 'BBB', compared with just below 'BBB+' in 2008.' Referring further to the developments in China, it said the continuing slowdown and its struggle with asset deflation, and euro zone uncertainties weigh on Asia-Pacific's growth prospects.

The CNX Nifty is currently trading at 8517.15, up by 63.05 points or 0.75% after trading in a range of 8462.95 and 8520.15. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.74%, Maruti Suzuki up by 2.41%, Zee Entertainment up by 1.90%, Tata Motors up by 1.83% and Wipro up by 1.79%. On the flip side, HCL Tech. down by 0.90%, BPCL down by 0.65%, Yes Bank down by 0.57%, Kotak Mahindra Bank down by 0.22% and Indusind Bank down by 0.14% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI was up by 0.18%, KOSPI Index in up by 0.46%, Straits Times up by 0.43% and Nikkei 225 up by 0.45%. On other hand, Shanghai Composite was down by 2.82%, Hang Seng down by 0.55%, Jakarta Composite down by 0.63% and Taiwan Weighted was down by 0.13%.