Benchmarks recover from day's low; bounce back into positive territory

Bouncing back from day's low, benchmark equity indices were trading firmly in green, with gains of around half of a percent, which took Sensex above the psychological 28,300 level and Nifty above its crucial 8,550 mark. Besides, broader indices continuing with their outperformance were trading with gains of around 0.60 percent. Sentiments got a boost with the introduction of composite cap in foreign investment policy, portfolio investors can invest up to 49 per cent in multi-brand retail and e-retail companies without government approval. Although the ruling BJP is against opening of multi-brand retail to FDI, introduction of composite cap has opened the gates for portfolio investors (FIIs, FPIs and QFIs) to pick up to 49 per cent in the politically sensitive sector without the government's nod. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 226.88 crore on July 21, 2015. Weakening trend on the other Asian markets following overnight losses on the US bourses, weighed on the sentiment.  Meanwhile, the monsoon session of the Parliament, which began on a stormy note on Tuesday, would be closely watched by the investors as the government is looking to pass the key bills including the controversial Land Acquisition Bill as well as the GST bill.

On global front, Asian stock markets dropped after U.S. earnings fell short of expectations and investors began to focus on next week's Federal Reserve meeting. Back home, Indian rupee fell marginally by 4 paise to 63.59 against the US currency in early trade due to fresh demand for the dollar from importers.

Back on street, stocks from Oil & Gas, Auto and FMCG counters were supporting the markets’ uptrend, while those from Metal, Consumer Durables and IT counters were adding to the underlying cautious undertone. In scrip specific development, shares of Supreme Petrochem have surged 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. Moreover, Indiabulls Housing Finance gained after the company reported a 21% jump in profit at Rs 511 crore in the June quarter on higher loan disbursement.

The market breadth on BSE was positive, out of 2234 stocks traded, 1448 stocks advanced, while 690 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28339.73, up by 157.59 points or 0.56% after trading in a range of 28070.91 and 28353.72. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index up by 0.60%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.06%, Auto up by 0.65%, FMCG up by 0.62%, PSU up by 0.49% and Infrastructure up by 0.37%, while Metal down by 0.57%, Consumer Durables down by 0.36%, IT down by 0.35% and TECK down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.60%, Cipla up by 2.08%, Bajaj Auto up by 1.89%, HDFC up by 1.86% and Hindustan Unilever up by 1.86%. On the flip side, Vedanta down by 3.77%, TCS down by 1.02%, Hindalco down by 0.93%, Infosys down by 0.84% and Bharti Airtel down by 0.71% were the top losers.

Meanwhile, Telecom regulator, the Telecom Regulatory Authority of India (TRAI) releasing the findings of the audit of quality of service being provided by telecom operators has said that most of the telecom companies in Delhi and Mumbai are not meeting the prescribed standards. TRAI said “The drive test results revealed that most of operators are not meeting the benchmarks of network related parameters. They failed to achieve the benchmarks due to high block call rate, high drop call rate, low call setup success rate and poor Rx quality.”

The service quality audit which was done by an agency through independent drive tests in the two cities in June and July, has revealed that only Bharti Airtel in Mumbai and Tata Teleservices in Delhi met the laid-down quality of service (QoS) benchmarks for call drop rate, which as per norms should be less than 2 per cent. Airtel had call drop rate of 0.97 per cent and Tata was having call drop rate of 0.84 per cent

Regarding other service providers the audit stated that in Mumbai, Idea has a call drop rate of 5.56 per cent, Tata has 5.51 per cent, Vodafone has 4.83 per cent, Aircel has 3.19 per cent, Reliance has 2.29 per cent. In Delhi Reliance had a call drop rate of 17.29 per cent, Airtel 8.04 per cent, Aircel 5.18 per cent, Vodafone 4.28 per cent and Idea 2.84 per cent.

TRAI further stated that the drive test results revealed that most of operators are not meeting the benchmarks of network related parameters. It however, said that this result reflects only the network conditions on the route followed by the test vehicles and as determined during the day and time of the drive test.

Meanwhile, the telecom department has written to telecom operators to take steps to optimise radio frequencies in their networks and analyse the reasons for call drops, and report back to the government on the action they have taken to deal with the matter by July 31. The government has also asked TRAI to suggest a disincentive mechanism to tackle the problem.

The CNX Nifty is currently trading at 8575.10, up by 45.65 points or 0.54% after trading in a range of 8498.65 and 8579.10. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.15%, Sun Pharma up by 2.58%, Asian Paints up by 2.41%, Cipla up by 2.31% and Bajaj Auto up by 2.01%. On the flip side, Vedanta down by 3.63%, Cairn India down by 3.08%, Idea Cellular down by 1.35%, TCS down by 1.18% and Infosys down by 0.96% were the top losers.

Asian markets were trading in red; Hang Seng was down by 1.16%, Nikkei 225 down by 1.04%, Taiwan Weighted down by 1.03%, KOSPI Index down by 1.1%, Shanghai Composite down by 0.59%, Jakarta Composite down by 0.01%, FTSE Bursa Malaysia KLCI down by 0.42% and Straits Times down by 0.06%.