Markets give up all early gains to trade modestly in red

Indian markets after giving up their morning gains have turned sluggish and were trading flat in the early noon session with a negative bias, on some selling in financial and auto stocks; however, the losses are capped by gains IT and pharma stocks. The early gains which was triggered by the government's move to introduce a composite foreign investment cap by clubbing all forms of overseas investments to define sectoral limits, was fading on some cautiousness with news of South Korean steel giant POSCO putting on hold its $12 billion steel project in Odisha due to delays in various regulatory approvals. Traders also overlooked some improvement in rupee, which was trading higher on fresh selling of the American currency by exporters amid increased foreign capital inflows. IT and Tech stocks have taken the lead on sectoral front, while banking and metal counter were putting pressure. Infra stocks kept buzzing with government’s announcement of 400 A1 and A category stations to be offered for redevelopment by inviting open bids from interested parties. The government has said that these stations are to be developed by leveraging real estate development of land and air space in and around the stations.

The BSE Sensex is currently trading at 28442.11, down by 4.01 points or 0.01% after trading in a range of 28417.46 and 28576.32. There were 21 stocks advancing against 8 stocks declining on the index.

The broader indices were outperforming the benchmarks and were trading in green; the BSE Mid cap index was up by 0.13%, while Small cap index gained 0.58%.

The top gaining sectoral indices on the BSE were TECK up by 0.84%, IT up by 0.74%, Power up by 0.69%, Consumer Durables up by 0.62%, Capital Goods up by 0.47%, while Bankex down by 0.28%, Metal down by 0.19%, Realty down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.25%, BHEL up by 1.23%, Tata Steel up by 0.94%, Hindalco up by 0.94% and Infosys up by 0.90%. On the flip side, HDFC down by 2.03%, Coal India down by 1.39%, Hindustan Unilever down by 0.99%, Wipro down by 0.78% and Axis Bank down by 0.70% were the top losers.

Meanwhile, the Asian Development Bank (ADB) in its supplement to the Asian Development Outlook  (ADO) 2015, has retained its India GDP growth projection for 2015-16 at 7.8 percent, but cautioned that delay in reforms relating to land acquisition and GST could hamper growth. ADB said that “In India, growth forecasts remain unchanged at 7.8 percent in fiscal year (2015-16) and 8.2 percent in 2016-17, supported by a healthy monsoon and new investments.” It further stated that, underlying indicators suggest that India is on track to achieve the ADO 2015 growth forecast of 7.8 percent in 2015-16.

ADB also said that the pace of GDP growth is expected to accelerate to 8.2 percent in 2016-17, driven by continued service sector growth and removal of procedural bottlenecks that have hampered investment flow. It said “A healthy monsoon extending to early July has seen summer crop sowing increase 57.6 percent over the last year and is expected to boost growth in agriculture. The number of new investment projects announced has continued to increase for the fourth consecutive quarter during the quarter ended June 2015, indicating brighter investment sentiment.”

It added that improvements in indirect tax collection in the first quarter of the current fiscal points to some recovery in manufacturing. The index of industrial production rose at an average rate of 3.2 percent in January-May 2015, double the 1.6 percent growth in the same period of 2014.

The international agency based in Manila, though has cut its 2015 growth forecast for developing Asia to 6.1% from 6.3%, amidst slower-than-expected economic activity in the United States (US) and the People’s Republic of China. It added that ongoing softness in the major industrialized economies (US, Japan, Euro Area) will see a slowdown in East Asia as a whole, with growth now at 6.2% in 2015, down from 6.5% forecast earlier.

The CNX Nifty is currently trading at 8603.25, down by 4.80 points or 0.06% after trading in a range of 8593.15 and 8642.95. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.20%, Ultratech Cement up by 1.31%, Tata Steel up by 1.21%, BHEL up by 1.18% and Grasim Industries up by 1.15%. On the flip side, Asian Paints down by 2.25%, HDFC down by 1.97%, Kotak Mahindra Bank down by 1.52%, Zee Entertainment down by 1.35% and Wipro down by 1.29% were the top losers.

Asian markets were trading mostly in green, Taiwan Weighted was up by 3.77 points or 0.04% to 9,045.98, Nikkei 225 50.8 points or 0.25% to 20,650.92, Shanghai Composite surged by 117.72 points or 3.08% to 3,940.90 and Hang Seng was higher by 302.43 points or 1.2% to 25,465.21

On the flipside, KOSPI Index declined by 11.1 points or 0.53% to 2,076.79.