Markets trade flat with positive bias in range-bound session of trade

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were trading flat with bit of positive bias on increasing buying by funds and retail investors in select stocks. Investors were awaiting the release of monthly U.S. jobs data due tomorrow for a sign of the health of the American economy which is likely to provide cues for an impending rate hike by the Fed. The sentiments remained optimistic with 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. Some support also came with government’s proposals for big investments of Rs 30,552.45 crore, pertaining to sectors such as pharmaceuticals, information & broadcasting, insurance, non-banking finance companies and private banks. However, losses in financials coupled with weakness in FMCG major ITC have capped the gains on the upside.

On global front, Asian markets were trading mostly in red as jitters about China's economy and upcoming U.S. jobs data kept buying appetite in check. Major US stock indices ended mixed with the Dow Jones ending flat with a negative bias after lower profit forecast by Disney for its cable business led to profit taking in media shares with Disney slumping over 9%. Back home, Indian rupee recovered by four paise to Rs 63.71 against the US dollar in early trade on increased selling of the American currency by exporters amid higher foreign funds inflow.

Back on street, stocks from Consumer Durables, Realty and Power counters were supporting the markets’ uptrend, while those from FMCG, Banking and Auto counters was adding to the underlying cautious undertone. In scrip specific development, shares of Siemens have surged after the company reported a 13-fold jump in standalone net profit at Rs 168 crore for the quarter ended June 30, 2015 (Q3), due to cost rationalisation process and strong performance by its power and gas segement. Furthermore, shares of Ramco Cements rose after the company reported over two fold jump in its net profit at Rs 97.49 crore for the quarter ended June 30, 2015 as compared to Rs 36.26 crore for the same quarter in the previous year.

The market breadth on BSE was positive, out of 2427 stocks traded, 1355 stocks advanced, while 974 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28231.03, up by 7.95 points or 0.03% after trading in a range of 28180.03 and 28314.40. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index up by 0.37%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.84%, Realty up by 0.76%, Power up by 0.61%, Capital Goods up by 0.50% and TECK up by 0.44%, while FMCG down by 1.04%, Bankex down by 0.15% and Auto down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 2.58%, Lupin up by 1.61%, Cipla up by 1.29%, ONGC up by 1.06% and Bajaj Auto up by 1.02%. On the flip side, ITC down by 1.69%, ICICI Bank down by 0.95%, Coal India down by 0.84%, Wipro down by 0.80% and GAIL India down by 0.46% were the top losers.

Meanwhile, a day after disappointing the street by maintaining status quo on policy rates, Reserve Bank of India (RBI) governor Raghuram Rajan has said the central bank will cut interest rate provided it feels confident that inflation will remain below 6 per cent even after the reduction. He said that “We will cut rate when we see that even after the rate cut, inflation will remain below 6 per cent.”

Rajan said that RBI’s expectation for retail inflation is around 6.1 per cent in January-March, 2016, but it should be actually below that. That is what we are looking for to see how much room we have. He said there is perception among people that inflation is rising because of increase in prices of milk and vegetables, which is “worrying”. RBI tracks CPI, or retail inflation, in deciding its monetary policy action.

The Governor raised a red flag on the sustained hardening of inflation minus the food and fuel elements. Nevertheless, he said that the Reserve Bank was reducing its average inflation projections by 0.2 per cent for the January 2016 to March 2016 period. The risks around the six per cent target were broadly balanced. On growth prospects, Rajan has said the current financial year is expected to end with a growth rate of 7.6%, which is a 'strong growth'.

The Reserve Bank has reduced policy rates by a total of 75 basis points in three tranches since January, though in its Third Bi-monthly Monetary Policy Review, 2015-16, the RBI has maintained a status quo. However, unlike the previous policy statements, the tone of the policy statement this time around was much more dovish as the Governor made it clear that the Reserve Bank was looking for an opportunity to cut rates further.

The CNX Nifty is currently trading at 8575.10, up by 7.15 points or 0.08% after trading in a range of 8552.35 and 8590.50. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 2.57%, Idea Cellular up by 2.02%, NMDC up by 1.87%, ACC up by 1.68% and Lupin up by 1.68%. On the flip side, Tech Mahindra down by 1.94%, ITC down by 1.79%, ICICI Bank down by 1.08%, Asian Paints down by 1.04% and Coal India down by 0.96% were the top losers.

Asian markets were trading Mostly in red; Hang Seng was down by 0.45%, Taiwan Weighted down by 1.43%, Jakarta Composite down by 0.25%, FTSE Bursa Malaysia KLCI down by 1.04%, Shanghai Composite down by 0.33%, KOSPI Index down by 0.84% and Straits Times down by 0.07%. On the flip side, Nikkei 225 was up by 0.62%.