Benchmarks erase gains; starts trading in red

Indian equity markets erased all the early gains and are now trading in red in the late afternoon session on account of selling in frontline blue chip counters. The sentiments remained dampen on reports that foreign portfolio investors sold shares worth a net Rs 859.94 crore on July 27, 2015, as per provisional data released by the stock exchanges. Traders were seen piling position in Power, FMCG and Capital Goods stock while selling was witnessed in Realty, Auto and Metal sector stocks. In scrip specific development, Maruti Suzuki India was trading in green after the company posted 56.49 percent increase in its standalone net profit at Rs 1,192.92 crore in the first quarter riding on high volumes, favourable foreign exchange and cost reduction efforts. However, Bank of India, the country’s third-biggest state-run lender by assets, was trading in red on reporting a sharply bigger-than-expected 84 percent fall in quarterly profit as bad loans surged. The market may remain volatile today as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. July 2015 series to next month i.e. August 2015 series. The near month July 2015 derivatives contracts expire on Thursday i.e. July 30, 2015.

On the global front, the Asian markets were trading mostly in red, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,350 and 27,500 levels respectively. The market breadth on BSE was negative in the ratio of 1272:1296 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 27454.37, down by 107.01 points or 0.39% after trading in a range of 27416.39 and 27676.65. 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 0.12%, while Small cap index down by 0.09%.

The gaining sectoral indices on the BSE were Power up by 0.32%, FMCG up by 0.21%, Capital Goods up by 0.17%, Consumer Durables up by 0.12% and Bankex up by 0.06%, while Realty down by 2.21%, Auto down by 0.67%, Metal down by 0.64%, INFRA down by 0.49% and Oil & Gas down by 0.46% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.30%, Hindalco up by 1.20%, NTPC up by 1.04%, SBI up by 0.71% and Lupin up by 0.71%.

On the flip side, Hero MotoCorp down by 3.02%, ICICI Bank down by 2.51%, HDFC down by 2.04%, Tata Motors down by 1.76% and Bharti Airtel down by 1.20% were the top losers.

Meanwhile, Arvind Subramanian, Chief Economic Advisor (CEA) of the country has said that India can grow at the rate of 8-10% if it has strong performing exports. CEA said that the International Economic environment of exports is not in the favor of India, as Europe, China and Japan are slowing down and said “I don't think there is one historical experience in the last 50-60 years where countries have rapid rate of growth without having strongly performing exports”. While talking about loose monetary policy which is followed by some countries he said that it will surely impact the growth performance of India.

CEA expressed his concern that India might lose the biggest export market of the world and is going to be a victim of trade diversion, as negotiations of big countries for preferential trade agreements is increasing, where US is close to competing agreement with a number of Asian countries and the European Union. Also, China which is going to be a part of trans-Atlantic trade agreement is a real risk for India to get excluded from the biggest market of the world. Non tariff barriers can also be disadvantageous for India and these are a huge challenge for the external trade environment which should be taken care of.

Further CEA said that India should have a competitive exchange rate where we have to upgrade local infrastructure which will boost exports growth and also added that the government's Make in India initiative will help to strengthen the economy.

The CNX Nifty is currently trading at 8324.85, down by 36.15 points or 0.43% after trading in a range of 8321.75 and 8397.40. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were PNB up by 3.66%, BHEL up by 2.08%, Kotak Mahindra Bank up by 1.13%, Hindalco up by 1.10% and NTPC up by 1.01%.

On the flip side, NMDC down by 5.02%, Hero MotoCorp down by 2.99%, ICICI Bank down by 2.77%, Tata Motors down by 2.46% and Idea Cellular down by 2.30% were the top losers.

The Asian markets were trading mostly in red; Shanghai Composite decreased 62.56 points or 1.68% to 3,663.00, Jakarta Composite decreased 56.57 points or 1.19% to 4,714.72, Straits Times decreased 25.66 points or 0.77% to 3,287.76, Nikkei 225 decreased 21.21 points or 0.1% to 20,328.89 and FTSE Bursa Malaysia KLCI decreased 6.65 points or 0.39% to 1,703.11.

On the other hand, KOSPI Index increased 0.29 points or 0.01% to 2,039.10, Taiwan Weighted increased 25.81 points or 0.3% to 8,582.49 and Hang Seng increased 151.98 points or 0.62% to 24,503.94.

The European markets were trading in green; France’s CAC increased 20.38 points or 0.41% to 4,947.98, Germany’s DAX increased 41.39 points or 0.37% to 11,097.79 and UK’s FTSE 100 increased 36.48 points or 0.56% to 6,541.61.