Markets firm up showing steady trade in early noon session

Markets showing a steady trade were firm in the early noon session, with benchmarks comfortably sailing over their crucial psychological levels of 28200 (Sensex) and 8550 (Nifty). There was across the board buying and traders were rejoicing the report of seasonally adjusted Nikkei Services Business Activity Index rising back above the 50.0 no-change mark in July, posting 50.8 from 47.7 in June. For the first time in three months the Services PMI has nudged above the 50 mark that separates growth from contraction. Trade was gradually strengthening for the day, powered by capital inflows by foreign funds and buying by retail investors amid a strong Asian trend. Foreign traders were encouraged on some reports that as per the recommendations of Justice AP Shah-led three-member committee on minimum alternative tax (MAT), foreign investor is not liable to pay MAT prior to April 1, 2015. While, the broader markets were outperforming, all the sectoral indices on the BSE were extending their advances led by realty, metal and FMCG. State-run banks too have extended their winning streak to a fifth straight day.

Surge in some bluechips too was supporting the market sentiments; Bharti Airtel after reporting solid earnings was trading higher by 1.5%. The company has reported about a 40 per cent jump in consolidated net profit at Rs 1,554.3 crore in the first quarter of the current fiscal.

The BSE Sensex is currently trading at 28288.41, up by 216.48 points or 0.77% after trading in a range of 28135.68 and 28308.50. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 1.12%, while Small cap index surged by 1.37%.

The top gaining sectoral indices on the BSE were Realty up by 3.35%, Metal up by 1.49%, FMCG up by 1.40%, IT up by 1.34%, Auto up by 1.31%

The top gainers on the Sensex were Tata Steel up by 4.06%, Bajaj Auto up by 2.57%, Wipro up by 1.84%, Vedanta up by 1.76% and Infosys up by 1.76%. On the flip side, GAIL India down by 0.41%, SBI down by 0.23% and ICICI Bank down by 0.10% were the top losers.

Meanwhile, the Indian services industry bounced back to growth in July, although the rate of expansion was only marginal, the seasonally adjusted Nikkei Services Business Activity Index rose back above the 50.0 no-change mark in July, posting 50.8 from 47.7 in June. The seasonally adjusted Nikkei India Composite PMI Output Index too climbed to 52.0 from 49.2 in June to signal a modest increase in activity, helped by a first rise in services activity in three months and acceleration in the rate of manufacturing production growth. Growth has now been recorded in 14 of the past 15 months.

As per the survey response, services activity rose primarily in response to a renewed increase in new business, with panelists commenting on strengthening demand conditions. Although growing for the first time in three months, the expansion in new business was slight.

The upturn in incoming new work led Indian service providers to take on additional workers in July. Although slight, the rate of job creation was the quickest in two years. Increased employment led services outstanding business to decline for the first time since February 2014.

Inflationary pressures remained muted during the month, with companies actually raising their output prices at a slower pace than in June. Although, input prices rose only modestly overall, but there were reports from services panellists that fuel, transportation and staff salaries had contributed to the latest increase in cost burdens.

The survey also noted that services output prices rose, extending the current sequence of charge inflation to eight months. Nonetheless, the latest increase was only marginal and the confidence among Indian services firms deteriorated in July. Though companies remained optimistic (on average), the level of positive sentiment dipped to a survey low.

The CNX Nifty is currently trading at 8577.80, up by 60.90 points or 0.72% after trading in a range of 8545.85 and 8587.45. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.08%, Bajaj Auto up by 2.59%, Cairn India up by 2.05%, Infosys up by 2.01% and Vedanta up by 1.92%. On the flip side, Asian Paints down by 1.56%, Yes Bank down by 0.86%, Kotak Mahindra Bank down by 0.79%, SBI down by 0.45% and Bank Of Baroda down by 0.44% were the top losers.

The Asian markets were trading in green, barring Shanghai Composite which declined by 45.24 points or 1.2% to 3,711.31

On the other hand, Straits Times was up by 1.59 points or 0.05% to 3,192.63, KOSPI Index gained 1.77 points or 0.09% to 2,029.76, FTSE Bursa Malaysia KLCI increased by 4.61 points or 0.27% to 1,728.34, Jakarta Composite was up by 23.55 points or 0.49% to 4,804.63, Taiwan Weighted added 31.41 points or 0.37% to 8,542.27, Hang Seng was up by 63.01 points or 0.26% to 24,469.13 and Nikkei 225 was higher by 93.7 points or 0.46% to 20,614.06.