Benchmarks witness consolidation; Nifty holds 8,600 mark

After witnessing gains of around two percent in previous two sessions, Indian equity indices went through consolidation on Friday with frontline gauges holding their crucial 28,400 (Sensex) and 8,600 (Nifty) bastions. Benchmark indices moved in a narrow range throughout the session with bouts of volatility witnessed during the trade. Earlier, markets made a firm start as some support came in with government’s move of introducing a composite foreign investment cap by clubbing all forms of overseas investments to define sectoral limits. Some support also came with Asian Development Bank (ADB) retaining its India GDP growth projection for 2015-16 at 7.8 percent in its supplement to the Asian Development Outlook (ADO) 2015.

But markets lost momentum and turned flat as investors opted to book profits at higher levels. Sentiments turned down-beat on monsoon worries. The southwest monsoon was 32 per cent below normal in the first 15 days of July, key month for sowing of kharif crops. Large tracts of central and southern India remained dry. This could have serious impact on the final output of pulses and oilseeds, unless there is a pick-up in the second half of this month. Also, once again there was some cautiousness emanating from Greece, with IMF Managing Director Christine Lagarde stating that the institution will participate in the third bailout only if the program is ‘complete’, adding that Greek plan is 'categorically' not viable and the country is in need of a debt reduction.

On the global front, European counters were trading mostly in red in early deals. Meanwhile, German lawmakers will pass their verdict on Greece’s bailout package later today, if approved it will pave the way for creditors to start talks with Greece. Asian markets ended mostly in green with Chinese markets once again surging by over three and a half percent after a report that banks pledged $322 billion to support equities.

Back home, foreign portfolio investors (FPIs) bought shares worth a net Rs 745.81 crore yesterday as per provisional data released by the stock exchanges. Appreciation in Indian rupee too supported the sentiments. The partially convertible rupee was trading at 63.48 per dollar at the time of equity market closing against the Thursday’s close of 63.51 on the Interbank Foreign Exchange.  Meanwhile, shares of five radio operators viz. B.A.G Films & Media, H T Media, Entertainment Network (India), TV Today Network edged higher on hopes of successful FM radio auctions. On the flip side, banking stocks remained under pressure after government decided to keep banks out of the composite foreign investment cap too dampened the sentiments.

The NSE’s 50-share broadly followed index Nifty increased marginally and managed to hold the psychological 8,600 support level, while Bombay Stock Exchange’s Sensitive Index – Sensex gained around twenty points to end above its psychological 28,450 mark. Broader markets, however, traded with some traction and ended the session with a gain of around one third of a percent. The market breadth was evenly divided, as there were 1,423 shares on the gaining side against 1,407 shares on the losing side while 139 shares remain unchanged.

Finally, the BSE Sensex gained 17.19 points or 0.06% to 28463.31, while the CNX Nifty added 1.80  points or 0.02% to 8609.85.

The BSE Sensex touched a high and a low 28576.32 and 28417.46, respectively. The BSE Mid cap index was up by 0.20%, while Small cap index up by 0.44%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.92%, TECK up by 0.99%, Power up by 0.96%, IT up by 0.93% and Healthcare up by 0.69%, while Realty down by 0.50%, Metal down by 0.45%, Bankex down by 0.38%, PSU down by 0.24% and Oil & Gas down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.02%, Mahindra & Mahindra up by 1.74%, Infosys up by 1.44%, Vedanta up by 1.25% and ITC up by 1.23%. On the flip side, HDFC down by 2.46%, Coal India down by 1.88%, Hindustan Unilever down by 1.07%, Axis Bank down by 1.06% and Wipro down by 0.81% were the top losers.

Meanwhile, the Union Cabinet, chaired by Prime Minister Narendra Modi, gave approval for redevelopment of 400 railways stations (A1 and A category) in metros and major cities besides pilgrim centres and tourist spots. Under the model ‘as is where is’, the parties coming through open bids will develop the station with their designs and business ideas, while zonal railways would permit the commercial development of real estate which include land and air space around the stations. This scheme will encourage innovative ideas from interested parties at no cost to the railways.

Finance Minister Jaitley detailing the scheme said that it is new process of giving contracts where any person with credentials can submit a development proposal to the government. That proposal will be put online and a second person can give suggestions to improve and beat that proposal.  The best proposal will be selected by an expert committee; the original proposer will be given a chance to match it, only in case it is an improvement on his proposal. If he is unable to match the competing proposal, the project will be awarded to the competing proposer.

Commenting on development Railway Minister Suresh Prabhu said that, the existing process   for redevelopment are time consuming as they involve various steps which include, inception and pre-feasibility report’, appointment of architect, technical consultants, financial and legal consultants, in-principle approval of local authorities, request for qualification, short listing of bidders, and request for technical proposals, hence they added little success.

The CNX Nifty touched a high and low 8,642.95 and 8,593.15 respectively.

The top gainers on Nifty were Tech Mahindra up by 2.07%, Mahindra & Mahindra up by 1.82%, ITC up by 1.81%, BHEL up by 2.71% and Ultratech Cement up by 1.42%. On the flip side, Asian Paints down by 2.74%, HDFC down by 2.34%, Coal India down by 1.54%, Ambuja Cement down by 1.42% and Axis Bank down by 1.26% were the top losers.

European Markets were trading mostly in the red; UK's FTSE was down by 0.07%, Germany’s DAX was down by 0.28% while France’s CAC was up by 0.05%.

Asian markets closed mostly in green on Friday, while markets in many regional trading centers were closed today to mark the ‘Eid’ holidays, including Singapore, Malaysia and Indonesia. Japan will set aside roughly $32 billion in next fiscal year’s state budget for measures to boost the economy’s productivity, underscoring Prime Minister Shinzo Abe’s resolve to end nearly two decades of deflation. The move will be part of Abe’s strategy to lift Japan's long-term growth potential and reflate the economy so that expected rises in tax revenue will help rein in the country’s massive public debt. Indonesia’s central bank governor stated that the country’s rupiah currency is slightly weaker than it should be. He added that at this time the rupiah is slightly undervalued. The rupiah is one of emerging Asia’s worst-performing currencies this year having lost about 7 percent.