Benchmarks magnify gains; Nifty above 8600 mark

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high levels on buying interest in IT majors after robust July jobs data in the US, the largest market for software, fuelled hopes of new orders going forward. Besides, renewed buying interest in financials also contributed to the rise of the Indian markets. At present, Sensex and Nifty were trading above the crucial 28,350 and 8,600 levels respectively, with gains of over half a percentage point. The broader markets continued to outperform benchmarks with the BSE Midcap and Smallcap indices rising over 0.65%. Some support also came with a survey report of CII ASCON, which has said that the economy is showing signs of a turnaround, albeit moderately, on the back of continued policy actions, implementation and enhanced business and consumer confidence. However, gains remained capped  with the report that Foreign Direct Investment (FDI) in services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, has dipped 15% to $488 million during April-May 2015 as compared to $574 miilion during same period of last year, as per latest data released by Department of Industrial Policy and Promotion (DIPP).

On the global front, most of the Asian markets declined after Chinese data indicated a deepening slowdown in demand in the world's industrial powerhouse. China's slowdown comes at a particularly sensitive time for emerging markets as expectations that the U.S. Federal Reserve will end nearly a decade of its zero interest rates soon have gained momentum in recent weeks, dealing a further blow to emerging market currencies and commodities. Further, Wall Street ended lower on Friday on the back of declines in oil prices and upbeat job growth data that was seen as putting the Federal Reserve on course for a potential rate hike in September. Back home, snapping its three-day falling streak, Indian rupee recovered 4 paise to 63.77 against the US dollar in early trade on fresh selling of the American currency by exporters and banks amid a higher opening in the domestic equity market.

Back on street, most sectoral indices were in the green except for Metal which was trading flat with negative bias. BSE Realty, Bankex, Power, IT and Teck were among the top gainers. In scrip specific development, shares of Avanti Feeds have surged after reporting a robust 78% year-on-year (yoy) jump in standalone net profit at Rs 45.71 crore for the quarter ended June 30, 2015. On the other hand, Shares of VA Tech Wabag have dipped after the company reported a consolidated net loss of Rs 9.88 crore for the first quarter ended June 30, 2015.

The market breadth on BSE was positive, out of 2458 stocks traded, 1560 stocks advanced, while 807 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28392.17, up by 155.78 points or 0.55% after trading in a range of 28228.27 and 28417.59. 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 0.86%, while Small cap index up by 0.66%.

The top gaining sectoral indices on the BSE were Realty up by 1.47%, Bankex up by 0.81%, IT up by 0.70%, TECK up by 0.63% and Oil & Gas up by 0.58%, while Metal down by 0.08% was the only losing index on BSE.

The top gainers on the Sensex were HDFC up by 2.19%, Hindalco up by 1.32%, Lupin up by 1.26%, TCS up by 1.11% and HDFC Bank up by 1.02%. On the flip side, Sun Pharma Inds. down by 0.88%, ONGC down by 0.81%, Tata Motors down by 0.70%, Coal India down by 0.51% and Mahindra & Mahindra down by 0.40% were the top losers.

Meanwhile, in the first two month of current financial year, India’s trade deficit with China touched $8 billion. Rising trade deficit with China on account of increasing Chinese exports to India rely strongly on manufactured items meeting the demand of fast expanding sectors like telecom and power, while India's exports to China are characterized by primary products, raw material and intermediate.

In an attempt to increase exports and to maintain balance of trade with country's trade partners including China, the government has taken a number of measures including market study initiatives to identify specific products having export potential. It is also actively taking up issues related to trade and non-trade measures with its trading partners.

In the last fiscal, trade deficit between India and China increased about 34% to 48.47 billion as compared to $36.2 billion in the financial year 2014. According to provisional figures, in the financial year 2015, India's exports to China stood at $11.95 billion, while imports were $60.39 billion. Commerce and Industry Minister Nirmala Sitharaman has said that India has entered into 11 free trade agreements and five preferential trade agreements with other countries. She further added 'India is negotiating FTAs and PTAs with some countries, including Israel and the EU (European Union).'

According to the Commerce Ministry data, India’s total trade deficit for April-March, 2014-15 was estimated at $ 137.014 billion which was higher than the deficit of $ 135.79 billion during April-March, 2013-14.

The CNX Nifty is currently trading at 8614.00, up by 49.40 points or 0.58% after trading in a range of 8564.45 and 8621.55. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.21% and Asian Paints up by 1.65% and Hindalco up by 1.64% and BPCL up by 1.51% and Tata Power up by 1.23%. On the flip side, Idea Cellular down by 1.17%, Sun Pharma down by 1.09%, ONGC down by 1.03%, Tata Motors down by 0.94% and Mahindra & Mahindra down by 0.49% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite was down by 0.99%, Hang Seng down by 0.29%, FTSE Bursa Malaysia KLCI down by 1.78% and KOSPI Index down by 0.35%. On the flip side, Taiwan Weighted was up by 0.36%, Nikkei 225 up by 0.34% and Shanghai Composite was up by 3.2%.