Benchmarks add gains; Power, Metal lead

Indian equity markets added gains and continued its firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on up-beat mood as industrial production expanded at better-than-estimated 4.2% in July this year compared to the same month last year as manufacturing activity and off-take of capital goods improved. Investors were however shying away from building huge positions as global markets speculated whether the US Federal Reserve will raise rates for the first time in almost a decade. Traders were seen piling position in Power, Metal and Realty stocks while selling was witnessed in Consumer Durables sector stocks. In the scrip specific development, Amtek Auto was trading firm on reports that the company may sell non-core assets to reduce its debt.

On the global front, the Asian markets traded mixed, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,800 and 25,700 levels respectively. The market breadth on BSE was positive in the ratio of 1597:870 while 85 scrips remained unchanged.

The BSE Sensex is currently trading at 25771.38, up by 161.17 points or 0.63% after trading in a range of 25531.07 and 25815.91. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.14%, while Small cap index up by 0.73%.

The gaining sectoral indices on the BSE were Power up by 1.73%, Metal up by 1.69%, Realty up by 1.53%, Bankex up by 1.43%, PSU up by 1.04% while Consumer Durables down by 0.08% was the losing index on BSE.

The top gainers on the Sensex were NTPC up by 3.39%, Tata Steel up by 3.30%, Hindalco up by 2.56%, Wipro up by 2.51% and Axis Bank up by 2.48%.

On the flip side, Bajaj Auto down by 0.41%, Hindustan Unilever down by 0.21%, Reliance Industries down by 0.13%, ONGC down by 0.09% and Hero MotoCorp down by 0.01% were the top losers.

Meanwhile, amid the flow of cheap imports from China, which can impact investments worth Rs 1.2 lakh crore, the representatives of the domestic aluminium industry have met Finance Minister Arun Jaitley urging him to raise the import duty on the metal. Primary producers are ruing that production cost of aluminium is around $2,000 per tonne, while prices at the London Metal Exchange (LME) have slumped to $1,600 a tonne. The government has asked the industry to provide the performance of various companies for it to study and to ensure whether a hike in import duty is really needed.

Aluminium industry can contribute to India's growth, but while domestic production costs are rising they are falling globally. According to data from the Aluminium Association of India, cheaper imports have badly impacted the domestic industry. The domestic capacity of 41 lakh tonnes an annum is currently operating at 50 per cent. Meanwhile, the market share of domestic manufacturers has dropped to 44 per cent in 2014-15 with imports nearly doubling to 15.63 lakh tonne from 8.81 lakh tonne in 2010-11.

India’s total imports mainly from China and Middle-Eastern countries have grown by more than 159 per cent to 1,563 kilo tonnes (KT) in 2015, compared to 881 KT in 2011.This led to imports accounting for 56 per cent of Indian aluminium consumption in 2014-15, while products of Indian producers account for only 44 per cent. Moreover, China, having more than 50 per cent of world aluminium production, is now exporting over 20 per cent of its products and their exports to India have surged by 200 per cent in FY15 as compared to FY11.

Primary aluminium producers -Vedanta, Hindalco and Nalco have invested around Rs 1.2 lakh crore to increase the production capacity from 2.1 million tonnes per annum (MTPA) to 4.1 MTPA by 2018-19 fiscal. But the falling price of the metal on the benchmark London Metal Exchange and rising imports have forced, Vedanta to shut down the rolling mill of group company BALCO and also to shut down its Lanjigarh alumina refinery process production stream, which lead to the Lanjigarh facility's output declining to half and impacting up to 2,000 jobs. In last three years, LME prices have come down by 35 per cent to $1,660 per tonne in June, 2015 from a peak of $2,555 a tonne in June, 2011.

The CNX Nifty is currently trading at 7838.25, up by 48.95 points or 0.63% after trading in a range of 7761.85 and 7849.25. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were NTPC up by 3.55%, Tata Steel up by 3.54%, Yes Bank up by 2.95%, Hindalco up by 2.63% and BPCL up by 2.50%.

On the flip side, Cairn India down by 2.06%, Idea Cellular down by 1.41%, Bajaj Auto down by 0.67%, Hindustan Unilever down by 0.35% and Larsen & Toubro down by 0.27% were the top losers.

The Asian markets were trading on a mixed note, Taiwan Weighted increased 1.47 points or 0.02% to 8,307.29, Jakarta Composite increased 16.49 points or 0.38% to 4,376.95, FTSE Bursa Malaysia KLCI increased 37.78 points or 2.36% to 1,641.38 and Hang Seng increased 57.53 points or 0.27% to 21,561.90.

On the other hand, Nikkei 225 decreased 298.52 points or 1.63% to 17,965.70, Shanghai Composite decreased 85.44 points or 2.67% to 3,114.80, KOSPI Index decreased 9.91 points or 0.51% to 1,931.46 and Straits Times decreased 8.59 points or 0.3% to 2,879.44.

The European markets were trading in green; France’s CAC increased 25.18 points or 0.55% to 4,573.90, Germany’s DAX increased 50.4 points or 0.5% to 10,173.96 and UK’s FTSE 100 increased 40.93 points or 0.67% to 6,158.69.