Benchmarks trim gains; trade continues in green

After getting a gap-up start, Indian equities trimmed gains but continued to trade in green in the late morning session on the back of fresh foreign capital inflows and renewed prospects of a rate cut by the Reserve Bank of India (RBI ) at its policy meet later this month largely due to positive macroeconomic numbers, including easing inflation. Sentiments got some support with Finance Minister Arun Jaitley’s statement the government is confident of the new GST regime to roll out from the next fiscal. He also hopes the economy will grow faster this year than last, and expects that Asia's third-largest economy will not see a big hit from China's slowdown. Besides, a firming trend at other Asian markets tracking overnight gains on Wall Street gave sentiment a boost. At present, Sensex and Nifty were trading above the crucial 26,200 and 7,950 levels respectively, with gains of over 0.10 percent. The broader markets were underperforming the larger peers with BSE Mid-cap and Small-cap indices trading up by 0.35% and 0.66%, respectively. The markets are likely to remain volatile ahead of the near-month September derivatives contracts expiry on Thursday, as traders roll-over positions to the October 2015 series.

On the global front, Asian markets were trading mostly in green, tracking the overnight gains on Wall Street and European markets as sentiments improved after comments from US Federal Reserve officials hinted at the possibility of an interest rate hike before the end of this year. Furthermore, US stocks rose overnight as St. Louis Fed President James Bullard and Atlanta Fed President Dennis Lockhart separately made the case for an increase in U.S. interest rates this year, boosting financial shares. Back home, Indian rupee edged higher by 17 paise to 65.56 against the US dollar in early trade on increased selling of the American unit by exporters amid fresh foreign fund inflows.

Back on street, stocks from IT, Consumer Durables and Teck counters were supporting the markets’ uptrend, while those from Metal, Power and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Infosy shave surged after the company secured a three-year contract to develop and maintain all global web-based properties of not for profit enterprise TOMS Shoes for an undisclosed sum. Furthermore, United Bank of India has rallied after the bank proposed to issue and allot through private placement rated, unsecured, non-convertible, perpetual, listed BASEL-III compliant Additional Tier-1 Bonds of Face Value of Rs 10.00 lakh per Bond aggregating up to Rs 200 crore including oversubscription.

The market breadth on BSE was positive, out of 2057 stocks traded, 1308 stocks advanced, while 671 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26242.56, up by 49.58 points or 0.19% after trading in a range of 26218.44 and 26339.10. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index up by 0.66%.

The top gaining sectoral indices on the BSE were IT up by 1.46%, Consumer Durables up by 1.26%, TECK up by 1.13%, FMCG up by 0.57%, Oil & Gas up by 0.21%, while Metal down by 0.44%, Power down by 0.23%, Capital Goods down by 0.17% and Infrastructure down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.16%, Wipro up by 1.39%, ITC up by 1.02%, Dr. Reddys Lab up by 0.95% and Mahindra & Mahindra up by 0.84%. On the flip side, Hindalco down by 3.27%, Bharti Airtel down by 1.55%, NTPC down by 1.50%, ONGC down by 0.84% and Bajaj Auto down by 0.78% were the top losers.

Meanwhile, India may ratify an agreement on trade facilitation so that it can negotiate from a position of strength when taking up issues such as food subsidies at the next World Trade Organization (WTO) ministerial meeting in December. The government has started simplifying trade-related processes and classifying them as per WTO norms as it plans to ratify the Trade Facilitation Agreement by November. 

Recent measures taken by India including the reduction in the number of documents required for export and import of goods and the facility of online filing of applications by exporters and importers are likely to make it to Category A of the agreement, which are provisions that can be complied with immediately and have to be implemented as soon as the accord comes into force. Also, online submission of applications for issue of online Importer Exporter Code in digital format, too, could be a Category A item.

Earlier, India had refused to sign the global protocol to speed up world trade until its demands related to public stockholding for food security purposes were met. Subsequently, it was agreed that WTO members will not challenge such programmes of developing countries until a permanent solution is adopted.

The CNX Nifty is currently trading at 7987.70, up by 10.60 points or 0.13% after trading in a range of 7979.65 and 8021.60. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Infosys up by 2.22%, Wipro up by 1.47%, ITC up by 1 %, Tech Mahindra up by 0.99% and Dr. Reddys Lab up by 0.92%. On the flip side, Hindalco down by 3.46%, NTPC down by 1.70%, Bharti Airtel down by 1.50%, Yes Bank down by 1.45% and Reliance Industries down by 1.09% were the top losers.

Asian markets were trading mostly in green; KOSPI Index was up by 0.63%, Straits Times up by 0.48%, Shanghai Composite up by 0.65%, Taiwan Weighted up by 0.45% and Hang Seng up by 0.72%. On the flip side, Jakarta Composite was down by 0.48% and FTSE Bursa Malaysia KLCI was down by 0.17%.