Markets retain early gains amid a range bound trade

Markets retaining their early gains continue to trade in a range, there is no sign of any profit taking till the early noon session and the NSE Nifty after reclaiming the 8,600-mark was holding it comfortably on the back of value-buying in realty, banking and technology stocks. There was fresh buying by investors in select blue-chips at prevailing level even though the regional peers continued trading mixed. Traders were encouraged with Union Minister of State for Labour Bandaru Dattatreya’s statement, expressing confidence that the process of investment in equities by Employees Provident Fund Organisation (EPFO), would give higher returns with the investments by EPFO being made with a long-term perspective. He said that “By end of this financial year (FY16), approximately Rs 5,000-6,000 crore will be in the markets.” Back on street, the broader markets too were in jubilant mood and going neck in neck to the benchmarks; while on the sectoral front the rate sensitive realty and banking have taken the lead on the other hand the capital goods sector stocks were showing modest profit taking. The PSU oil marketing companies were trading in green as the international crude prices declined further after top producing cartel OPEC refused to cut output, and as investors wait for Iran to ramp up exports after a major deal over its nuclear programme last month.

The BSE Sensex is currently trading at 28377.57, up by 141.18 points or 0.50% after trading in a range of 28228.27 and 28417.59. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices too were trading in green; the BSE Mid cap index surged by 0.84%, while Small cap index was up by 0.49%.

The gaining sectoral indices on the BSE were Realty up by 1.45%, Bankex up by 0.88%, IT up by 0.70%, TECK up by 0.65%, Power up by 0.37% while, Metal down by 0.41%, PSU down by 0.08%, Capital Goods down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.49%, Lupin up by 1.22%, TCS up by 1.11%, HDFC Bank up by 1.01% and Hindalco up by 0.96%. On the flip side, ONGC down by 1.40%, Coal India down by 1.20%, Tata Motors down by 0.80%, Sun Pharma Inds. down by 0.76% and Mahindra & Mahindra down by 0.68% were the top losers.

Meanwhile, the Commerce Ministry, in order to give a fillip to exports has moved a Cabinet note on a proposal to provide cheaper credit access to exporters from various sectors under the interest subvention scheme. Director General of Foreign Trade (DGFT) Pravir Kumar said that “We have moved a Cabinet note on the interest subvention scheme for inter-ministerial consultation. I hope the scheme should encourage exports.”

Though, the details of subvention rate or the sectors were not given but under the interest subvention scheme, exporters are provided credit at subsidised rates by banks which are later compensated by the government. Loans at subsidised rates will help exporters boost shipments as the country's exports stayed in the negative zone in the past seven months in a row. India's exports fell 15.82 per cent in June to $22.28 billion, compared to $26.47 billion in the same month of the previous year due to global economic slowdown.

Pravir Kumar further said that exports are a big challenge considering sluggish global demand, he added that exporters should try other markets like Latin America, Africa, CIS and ASEAN nations besides FTA partner countries. He also said that “It is a good idea not to keep all your eggs in one basket. If we depend too much on the US and Europe, then if there is problem in one area, the whole country and the industry will suffer. So, we would like our exporters to explore possibilities in other countries.”

The interest subvention scheme was available up to March 31, 2014. Recently, Commerce Minister Nirmala Sitharaman had told Parliament that the interest subvention scheme for various sectors was under consideration of the government.

The CNX Nifty is currently trading at 8610.80, up by 46.20 points or 0.54% after trading in a range of 8564.45 and 8621.55. There were 35 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.51%, Asian Paints up by 1.50%, Kotak Mahindra Bank up by 1.43%, Lupin up by 1.27% and Power Grid Corpn. up by 1.15%. On the flip side, ONGC down by 1.59%, Idea Cellular down by 1.14%, Coal India down by 1.11%, Tata Motors down by 0.90% and Mahindra & Mahindra down by 0.84% were the top losers.

The Asian markets were trading mixed, Straits Times was up by 5.27 points or 0.17% to 3,196.66, Taiwan Weighted gained 24.55 points or 0.29% to 8,466.84, Nikkei 225 was higher by 84.13 points or 0.41% to 20,808.69 and Shanghai Composite surged by 163.2 points or 4.36% to 3,907.40.

On the other hand, Jakarta Composite declined by 47.11 points or 0.99% to 4,723.19, FTSE Bursa Malaysia KLCI lost 29.89 points or 1.78% to 1,652.76, Hang Seng was down by 25.14 points or 0.1% to 24,527.33 and KOSPI Index lost 7.06 points or 0.35% to 2,003.17.