Benchmarks continue lackadaisical trade in late afternoon session

Indian equity markets continued their lackadaisical trade hovering near the neutral line in a narrow range in the late afternoon session in absence of any positive upside triggers. Investors remained concerned as monsoon session has commenced in the Parliament and investors will look out for the key developments concerning the rollout of GST and the passage of the land acquisition bill. Traders were seen piling position in IT, TECK and Auto sector stocks while selling was witnessed in FMCG, Oil & Gas and Infra sector stocks. In scrip specific development, Infosys was trading firm after software major’s net profit for the April-June quarter rose 5% to Rs 3,030 crore and under its new CEO, Vishal Sikka, who is just one year into the job, it has manage to win large orders. Sun Pharmaceuticals plunged after India’s largest drugs manufacturer issued a revenue and profit warning. The company will discontinue some of Ranbaxy’s low-margin businesses.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,600 and 28,400 levels respectively. The market breadth on BSE was negative in the ratio of 1118:1519 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 28429.76, up by 9.64 points or 0.03% after trading in a range of 28354.81 and 28518.06. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.48%, while Small cap index down by 0.37%.

The gaining sectoral indices on the BSE were IT up by 5.51%, TECK up by 4.72%, Auto up by 0.26% and Capital Goods up by 0.19%, while FMCG down by 1.36%, Oil & Gas down by 0.89%, INFRA down by 0.73%, Bankex down by 0.59% and Realty down by 0.57% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 11.94%, Bharti Airtel up by 4.09%, Wipro up by 2.70%, BHEL up by 2.50% and Coal India up by 1.43%.

On the flip side, Sun Pharma down by 13.60%, Vedanta down by 3.56%, Lupin down by 3.46%, Hindustan Unilever down by 2.69% and Tata Steel down by 2.66% were the top losers.

Meanwhile, local rating agency India Ratings and Research (Ind-Ra) has said that Kharif production is likely to cross the FY15 level in FY16 if the rainfall pattern during the rest of the monsoon period remains similar to that seen during 1 June-15 July 2015, says India Ratings and Research (Ind-Ra). This is in view of this year’s higher sowing of kharif food grains, increased acreage under pulses and higher reservoir levels than in FY15. 

The rating agency has said that Kharif food grains represent close to half (FY15: 49.6%) of the total food grain output in India and sowing of this crop was 63% higher by mid-July 2015 than in the corresponding period last year. Although this was because FY15 was a bad monsoon year, sowing is currently 8.72% higher than the normal kharif sowing area by mid-July.  Higher sowing is mainly due to 13% more than long-period average rainfall in June 2015. Total kharif crop sowing area on 17 July was 56.33 million hectares compared with 34.63 million hectares in the corresponding period last year. For kharif oil seeds, the probability of higher production is also brightened due to a 44.7% increase in its acreage from normal acreage.

Ind-Ra further added that FY16 kharif food grain production outlook depends on the amount of rainfall in the second half of July and in the remaining two months of monsoon, as rainfall in the first half of July was well below normal. A bad monsoon during FY15 pulled down the kharif production to 124.60 million tonnes from 128.69 million tonnes in FY14. 

Earlier, Agriculture Minister Radha Mohan Singh too had said that there has been a significant increase in area under pulses, oilseeds and coarse cereals so far and we expect a record production of these crops. Singh said higher minimum support price and other measures taken under various programmes has encouraged farmers to bring more area under these crops.

The CNX Nifty is currently trading at 8606.30, up by 2.85 points or 0.03% after trading in a range of 8588.25 and 8646.75. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Infosys up by 11.99%, HCL Tech up by 4.21%, Bharti Airtel up by 4.14%, Tech Mahindra up by 3.38% and Zee Entertainment up by 2.57%.

On the flip side, Sun Pharma down by 13.76%, Ultratech Cement down by 3.59%, Vedanta down by 3.49%, Lupin down by 3.45% and Ambuja Cement down by 3.02% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 6.91 points or 0.4% to 1,731.04, KOSPI Index increased 10.31 points or 0.5% to 2,083.62, Shanghai Composite increased 25.57 points or 0.64% to 4,017.68, Taiwan Weighted increased 30.96 points or 0.34% to 9,005.96, Hang Seng increased 131.62 points or 0.52% to 25,536.43 and Nikkei 225 increased 191.05 points or 0.93% to 20,841.97.

On the other hand, Straits Times decreased 0.51 points or 0.02% to 3,372.97. Indonesia stock exchange is closed on account of ‘National Leave’ holiday.

The European markets were trading in red; Germany’s DAX decreased 9.32 points or 0.08% to 11,726.40, UK’s FTSE 100 decreased 8.26 points or 0.12% to 6,780.43 and France’s CAC decreased 7.58 points or 0.15% to 5,134.91.