Benchmarks trade slightly in red in early deals

Extending their previous session’s fall, Indian equity market have made a negative start and are trading slightly in red on account of weak global cues. The sentiments were further weighed down by a report from a private research firm saying that the underlying business sentiment in India during July-September quarter of calendar 2015 is likely to remain subdued amid concerns of weak factory data and potential impact of deficient monsoon. Further, depreciation in Indian rupee against dollar too was putting pressure. The rupee has opened at 63.58 against the US dollar, weaker by 7 paise. Furthermore, foreign portfolio investors (FPIs) sold shares worth a net Rs 226.88 crore July 21, 2015, as per provisional data released by the stock exchanges, kept pressurizing the sentiments.   

In scrip specific development, Supreme Petrochem surged 18% in early morning trades after the company reported an over eight-fold jump in net profit at Rs 63.42 crore for the quarter ended June 30, 2015 (Q4), due to lower raw material costs.

On the global front, the US markets ended lower on disappointing quarterly reports from some blue chip companies. Asian markets were trading in red after US earnings fell short of expectations and investors began to focus on next week's Federal Reserve meeting.

Back home traders were piling up position in Healthcare, FMCG, Oil & Gas and Auto, while selling was Witnessed in IT, TECK, Consumer Durables, Metal and Capital Goods. The market breadth on BSE was positive in the ratio of 932: 693 while 64 scrips remained unchanged.

The BSE Sensex is currently trading at 28136.93, down by 45.21 points or 0.16% after trading in a range of 28070.91 and 28159.42. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.06%, while Small cap index up by 0.12%.

The top gaining sectoral indices on the BSE were  Healthcare up by 067%, FMCG up by 0.45%, Oil & Gas up by 0.27% and Auto up by 0.04%, while IT down by 1.37%, TECK down by 1.12%, Consumer Durables down by 0.79%, Metal down by 0.77%, Capital Goods down by 0.43% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.06%, Hindustan Unilever up by 1.91%, Sun Pharma Inds. up by 1.76%, Cipla up by 1.36% and ONGC up by 0.62%. On the flip side, Vedanta down by 2.75%, Infosys down by 2.31%, Tata Steel down by 1.33%, TCS down by 1.23% and Hindalco down by 1.02% 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 8513.00, down by 16.45 points or 0.19% after trading in a range of 8498.65 and 8524.70. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.47%, Bajaj Auto up by 2.10%, Hindustan Unilever up by 1.95%, Zee Entertainment up by 1.76% and Sun Pharma up by 1.74%. On the flip side, Vedanta down by 2.60%, Infosys down by 2.44%, Cairn India down by 1.94%, Tech Mahindra down by 1.57% and PNB down by 1.38% were the top losers.

Asian markets were trading in red; Hang Seng decreased 249.72 points or 0.98% to 25,286.7, 1Nikkei 225 decreased 242.78 points or 1.16% to 20,599.19, Taiwan Weighted decreased 86.55 points or 0.96% to 8,919.41, KOSPI Index decreased 22.59 points or 1.08% to 2,061.03, Shanghai Composite decreased 16.89 points or 0.42% to 4,000.79, Jakarta Composite decreased 9.04 points or 0.19% to 4,860.81, FTSE Bursa Malaysia KLCI decreased 7.09 points or 0.41% to 1,729.10 and Straits Times decreased 2.74 points or 0.08% to 3,368.67.