Benchmarks continue firm trade in late afternoon session

Indian equity markets continued its firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on up-beat note on hopes of a monetary easing by the Reserve Bank of India (RBI) after the US Federal Reserve did not opt for a short term interest rate hike. Investors took note of Paris-based think tank, the Organisation for Economic Cooperation and Development (OECD) report which stated that India is projected to grow at a slightly slower pace than expected earlier at 7.2% this fiscal but the country is an exception to the worsening picture in major emerging economies. Traders were seen piling position in Realty, Bankex and PSU stocks while selling was witnessed in FMCG sector stocks. In the scrip specific development, SKS Microfinance and Dewan Housing Finance (DHFL) were trading in red after these lenders failed to find a place on the list of 10 NBFCs that were granted small bank licences by the Reserve Bank of India (RBI).

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,000 and 26,400 levels respectively. The market breadth on BSE was positive in the ratio of 1747:744 while 97 scrips remained unchanged.

The BSE Sensex is currently trading at 26404.01, up by 440.04 points or 1.69% after trading in a range of 26130.36 and 26471.82. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.59%, while Small cap index up by 1.40%.

The gaining sectoral indices on the BSE were Realty up by 4.09%, Bankex up by 3.46%, PSU up by 1.81%, Auto up by 1.44%, Power up by 1.38% while, FMCG down by 0.39% was the only losing index on BSE.

The top gainers on the Sensex were Axis Bank up by 4.61%, ICICI Bank up by 4.23%, Mahindra & Mahindra up by 4.11%, SBI up by 3.80% and HDFC Bank up by 3.30%.

On the flip side, Tata Motors down by 2.69%, Hindustan Unilever down by 1.33%, GAIL India down by 1.21%, ITC down by 0.58% and Bharti Airtel down by 0.49% were the top losers.

Meanwhile, global credit rating agency Moody's has said that the imposition of a safeguard duty on certain categories of hot-rolled coil steel imported into the country is credit positive for Indian steel producers because the duty will support domestic steel prices, improve producers profitability and their leverage metrics.

Moody's Investors Service in its report said that domestic prices fell 25 percent between June 2014 and June 2015 owing to a 57 percent increase in cheaper imports, one third of which came from China, adding that the safeguard duty and a depreciating rupee will provide a stabilising impact on domestic prices and demand-supply equations. It added that the weak rupee makes steel imports more expensive and therefore, helps domestic steel producers indirectly.

The report further highlighted that surging imports, especially from China, South Korea and Japan, have resulted in an imbalance between the supply and demand of steel in India and led to a sharp drop in prices. Earlier the government had announced a 20% safeguard duty on hot-rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more, effective September 14 and levied for 200 days. The levy will be applicable uniformly to the aforesaid category of steel imported from all countries, even the ones with whom India has an FTA (free trade agreement).

The CNX Nifty is currently trading at 8032.70, up by 133.55 points or 1.69% after trading in a range of 7958.75 and 8055.00. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.60%, Bank of Baroda up by 4.35%, ICICI Bank up by 4.03%, Mahindra & Mahindra up by 4.00% and SBI up by 3.91%.

On the flip side, Tata Motors down by 2.38%, Hindustan Unilever down by 1.47%, Cairn India down by 1.42%, GAIL India down by 1.35% and ITC down by 0.73% were the top losers.

The Asian markets were trading mostly in green; Jakarta Composite increased 0.01 points or 0% to 4,378.40, Straits Times increased 8.49 points or 0.29% to 2,904.30, Shanghai Composite increased 11.86 points or 0.38% to 3,097.92, Taiwan Weighted increased 16.64 points or 0.2% to 8,462.14, KOSPI Index increased 19.46 points or 0.98% to 1,995.95 and Hang Seng increased 66.2 points or 0.3% to 21,920.83.

On the other hand, Nikkei 225 decreased 362.06 points or 1.96% to 18,070.21 and FTSE Bursa Malaysia KLCI decreased 13.53 points or 0.8% to 1,668.01.

The European markets were trading in red; UK’s FTSE 100 decreased 12.36 points or 0.2% to 6,174.63, Germany’s DAX decreased 118.48 points or 1.16% to 10,111.10 and France’s CAC decreased 47.49 points or 1.02% to 4,607.65.