Benchmarks trade slightly in green in early deals

After making a good start, Indian equity benchmarks were altering between positive and negative territory, trading with a positive bias on value buying by participants in select blue chip stocks. Investors’ sentiment was positive after RBI Governor Raghuram Rajan’s statement that the central bank will cut interest rate provided it feels confident that inflation will remain below 6 percent even after the reduction. Traders were getting some support on reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 447.90 crore on August 5, 2015, as per provisional data released by the stock exchanges. Appreciation in Indian rupee against dollar was supporting the markets. The rupee edged up 4 paise to 63.71 against the US dollar in early trades at the Interbank Foreign Exchange market on increased selling of the dollar by exporters amid higher foreign funds inflow. Traders were seen piling up position in Consumer Durables, Healthcare, Oil & Gas, IT and Capital Goods, selling was witnessed in FMCG, Metal, Bankex, Auto and PSU.

In scrip specific development, Salzer Electronics was trading lower after Larsen & Toubro (L&T) sold its stake in the company through bulk deal for about Rs 54 crore.

On the global front, the US markets closed mostly higher led by tech shares. Asian markets were trading mostly in red as traders remain cautious ahead of Friday’s all-important US non-farm payrolls report which may provide further hint on the US interest rates outlook.

Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,550 and 28,200 levels respectively. The market breadth on BSE was positive in the ratio of 1016: 893 while 71 scrips remained unchanged.

The BSE Sensex is currently trading at 28233.38, up by 10.30 points or 0.04% after trading in a range of 28180.03 and 28314.40. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02%, while Small cap index gained 0.14%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.91%, Healthcare up by 1.30%, Oil & Gas up by 0.54%, IT up by 0.49% and Capital Goods up by 0.44%, while FMCG down by 0.92%, Metal down by 0.52%, Bankex down by 0.37%, Auto down by 0.24% and PSU down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 2.27%, Lupin up by 1.60%, Sun Pharma Inds. up by 1.21%, ONGC up by 0.94% and Infosys up by 0.76%. On the flip side, Tata Steel down by 1.62%, ITC down by 1.52%, ICICI Bank down by 0.95%, HDFC down by 0.86% and SBI down by 0.77% were the top losers.

Meanwhile, the US has finally renewed its generalized system of preferences (GSP) programme, which earlier ended on July 31, 2013, under which the Indian exporters will get concessional duty treatment in the US market. The programme has been renewed retrospectively from August 1, 2013 and further will be present till December 31, 2017. India will get duty advantage in respect of 3500 product lines.

The domestic sectors which will get advantage from this duty benefits include certain textiles, gems & jewellery, pharmaceuticals and chemicals. However, products whose annual exports to the US have reached $170 million would not be able to avail the benefit of this programme.

Federation of Indian Export Organizations' (FIEO) President SC Ralhan said that this move will benefit Indian exports and will also increase competitiveness of Indian goods which are covered under GSP in US market. Further, this will help in increasing shipments to the US, which accounts for 13% of Indian exports. The decision of US is significant development at a time when India's exports continue to be in the negative zone.

Declining for the seventh month in a row, country's exports were lower by 15.82% to $22.28 billion in June as global slowdown took place. In the previous fiscal the two way trade between India and the US stood at $64.26 billion.

The CNX Nifty is currently trading at 8571.80, up by 3.85 points or 0.04% after trading in a range of 8552.35 and 8590.50. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 2.56%, Lupin up by 1.66%, BPCL up by 1.38%, ONGC up by 1.06% and HCL Tech. up by 1.02%. On the flip side, ITC down by 1.84%, Tata Steel down by 1.64%, PNB down by 1.32%, Tech Mahindra down by 1.24% and Asian Paints down by 1.06% were the top losers.

Asian markets were trading Mostly in red; Hang Seng decreased 130.79 points or 0.53% to 24,383.37, Taiwan Weighted decreased 118.7 points or 1.39% to 8,423.57, FTSE Bursa Malaysia KLCI decreased 14.85 points or 0.86% to 1,710.71, Shanghai Composite decreased 12.26 points or 0.33% to 3,682.31, KOSPI Index decreased 11.97 points or 0.59% to 2,017.79 and Straits Times decreased 2.34 points or 0.07% to 3,189.05.

On the flip side, Jakarta Composite increased 0.89 points or 0.02% to 4,851.42 and Nikkei 225 increased 158.23 points or 0.77% to 20,772.29,