Markets pare most of the early gains, trade flat

Markets have pared most of their early gains and were trading at the lowest point of the day, albeit in green. Some concern grew in the market with global rating agency Moody's Investors Service cutting its forecast for India’s economic growth to around 7 percent this year from 7.5 percent earlier, because of lower-than-expected rainfall in the ongoing monsoon season. Though, the rating agency maintained its forecast of around 7.5 percent increase in gross domestic product (GDP) for 2016, but pointed to risks ahead that include delays in the government’s reform plans. Weakness in the regional peers too was weighing down the sentiments after Chinese markets slumped again.

Telecom stocks were trading lower after the government asked telecom service providers to optimise allocation of resources to address the call drop issue and rejected the operators' claim that it was linked to the national tower policy. Bharti Airtel was down by about half a percent, RCom was down by about a percent, while Idea Cellular lost over a percent. On the other hand, Coffee stocks were buzzing since morning on a report that the government is weighing foreign direct investment in plantation sector. A proposal to this effect is under consultation of the commerce and industry ministry. Separately, Coffee Day Enterprises, which runs the country's biggest coffee chain Cafe Coffee Day, received markets regulator Sebi's go-ahead to raise Rs 1,150 crore through initial public offering (IPO).Tata Coffee surged by over 8 percent, CCL Products rose nearly 5 per cent, Tata Global Beverages was higher by 2 percent and Mcleod Russel India was up by around a percent. While, the broader markets were outperforming, IT and tech sector stocks have taken the lead in the absence of rupee trading. PSU banks too strengthened further.

The BSE Sensex is currently trading at 27883.25, up by 4.98 points or 0.02% after trading in a range of 27863.08 and 28040.73. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 0.17%, while Small cap index gained 0.51%.

The top gaining sectoral indices on the BSE were IT up by 1.64%, TECK up by 1.15%, Capital Goods up by 1.01%, Consumer Durables up by 0.50%, Auto up by 0.37%, while Metal down by 0.96%, Realty down by 0.78%, Bankex down by 0.40%, Power down by 0.22%, FMCG down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.09%, Infosys up by 2.08%, Larsen & Toubro up by 1.57%, SBI up by 1.34% and Tata Steel up by 1.32%. On the flip side, GAIL India down by 3.53%, Cipla down by 2.34%, Coal India down by 1.57%, Hindalco down by 1.54% and Lupin down by 1.14% were the top losers.

Meanwhile, the Finance Ministry has advanced the time for Budget preparation by over two months. For the 2016-17 Budget and the process will begin this month instead of October. In a statement, Finance Ministry said that “In consonance with the objective of the Government of India to have wider consultations with various stakeholders as well as to provide more time for planners, it has been decided to start the Budget exercise by middle of August, 2015 for the forthcoming financial year 2016-17.”

The ministry added that the Budget circular, which marks the beginning of Budget formulation exercise, is being issued by the Budget Division. This is for the first time that the government is beginning Budget preparations process seven months ahead of presentation. The Union Budget is traditionally unveiled on the last working day of February.

It also announced the issuance of Budget Circular, which marks the beginning of the Budget formulation exercise. Last year, this circular was issued on October 10. Such a circular fixes the time line for various Ministries to furnish information to the Finance Ministry. It talks about methods to be followed for revenue and expenditure estimates.The budget exercise, which normally starts during later part of October, involves consultations with several interest groups like industry, traders bodies and trade unions.  In addition, various government departments make expenditure proposals to the Finance Ministry. The budget for the next fiscal will be crucial and the finance ministry is apprehensive about the recommendations of the Seventh Pay Commission, which is likely to significantly increase the revenue expenditure of the government in the next fiscal, leaving it less money to spend on building capital assets.

The CNX Nifty is currently trading at 8486.90, up by 9.60 points or 0.11% after trading in a range of 8483.65 and 8525.75. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.04%, Infosys up by 2.47%, TCS up by 2.11%, Larsen & Toubro up by 1.84% and SBI up by 1.41%. On the flip side, GAIL India down by 3.23%, NMDC down by 3.03%, Cipla down by 2.35%, Cairn India down by 1.94% and Idea Cellular down by 1.66% were the top losers.

Most of the Asian markets were trading in red, barring FTSE Bursa Malaysia KLCI which increased by 9.28 points or 0.59% to 1,581.82.

On the other hand, Hang Seng lost168.98 points or 0.71% to 23,645.67, Shanghai Composite plunged by 144.53 points or 3.62% to 3,849.14, Nikkei 225 lost 65.79 points or 0.32% to 20,554.47, Jakarta Composite declined by 42.65 points or 0.93% to 4,542.74, Taiwan Weighted lost 36.2 points or 0.44% to 8,177.22, KOSPI Index was down by 12.26 points or 0.62% to 1,956.26 and Straits Times was tad lower by 0.8 points or 0.03% to 3,066.55.