Benchmarks recover from day's low; bounce back into positive territory

Reversing gears, Indian benchmark indices have now entered into positive territory in late morning deals on emergence of buying by funds and retail investors in select stocks. Sentiments got some support with report that a group of central and state government officials set up to frame the law for the proposed goods and services tax (GST) has submitted its final draft that could be taken up at a meeting of the empowered committee of state finance ministers next week. Investors got some confidence after Indirect tax collections rose by about 37 per cent during April-May compared to the same period of the last fiscal. Further, support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 234.20 crore on June 09, 2016. However, weak trend in Asian stocks coupled with depreciation in rupee value have limited the gains.  India rupee was trading lower by 17 paise at 66.88 against the US dollar on higher demand for the American currency from importers and banks. Investors remained anxious with the report that monsoon rains in India were 18 per cent below average in the week to June 8, as the onset of rainfall was delayed by nearly a week from its usual arrival on June 1, 2016. Further, some traders remained on the sidelines and refrained from any buying activity ahead of Industrial production data slated to be announced later in the day, the IIP for March 2016 was just 0.1 per cent higher as compared to the level in March 2015.

On the global front, Asian stock markets were trading lower in early trade as investors shied away from risky assets before the release of Chinese economic data and a Fed policy meeting, and as fears loomed that Britain could vote to leave the European Union. Overnight, US stocks pared earlier losses but ended in negative territory, snapping a three-day win streak as oil futures pulled back from 10-month highs. Back home, stocks from Power, Metal and PSU counters were supporting the markets’ uptrend, while those from Consumer Durables and information technologies (IT) counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Adani Ports & Special Economic Zone gained after rating agency India Ratings & Research assigned a stable outlook for its proposed non-convertible debentures (NCDs). Moreover, Satin Creditcare Network has rallied after Morgan Stanley Asia (Singapore) bought more than 2% stake in the company via open market purchases.

The market breadth on BSE was optimistic, out of 2183 stocks traded, 1424 stocks advanced, while 648 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26795.83, up by 32.37 points or 0.12% after trading in a range of 26683.08 and 26814.70. There were 19 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.45%, while Small cap index up by 0.69%.

The top gaining sectoral indices on the BSE were Power up by 1.50%, Metal up by 1.07%, PSU up by 0.78%, Oil & Gas up by 0.68% and Capital Goods up by 0.59%, while Consumer Durables down by 0.33%, TECK down by 0.09% and IT down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.96%, Mahindra & Mahindra up by 1.41%, Lupin up by 1.34%, Adani Ports &Special up by 1.11% and Reliance Industries up by 1.11%. On the flip side, Tata Motors down by 0.73%, Asian Paints down by 0.58%, Bharti Airtel down by 0.53%, Infosys down by 0.41% and HDFC down by 0.31% were the top losers.

Meanwhile, Finance Ministry has said that the recent memorandum of understanding (MoU) between the National Investment and Infrastructure Fund (NIIF) and the Qatar Investment Authority (QIA) on June 5 during the visit of Prime Minister Narendra Modi to Doha will enable the Qatar sovereign wealth fund to study investment opportunities in the Indian infrastructure sector.

The MoU between NIIF with QIA, which was signed by QIA CEO Abdullah Bin Mohamed Al Thani and Ministry of External Afairs Secretary (Economic Relations) Amar Sinha, will remain in effect for 12 months during which both NIIF and QIA will discuss and agree on terms, principles and criteria for such investments. The Finance Ministry has said that the objective of the MoU is to assist QIA to study investment opportunities in India’s infrastructure sector and develop a framework for exchange of information with regard to such investment opportunities in order to enable both sides to decide on joint investments. 

The Ministry has further stated that NIIF shall share with QIA a pipeline of investment opportunities available in the infrastructure sector in India. Recently, the NIIF Governing Council, under chairmanship of Finance Minister Arun Jaitley, met and reviewed the progress of India's maiden sovereign wealth fund and discussed investment proposals and project pipeline.

The CNX Nifty is currently trading at 8213.85, up by 10.25 points or 0.12% after trading in a range of 8179.05 and 8215.20. There were 32 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were BHEL up by 4.21%, Hindalco up by 2.66%, Lupin up by 1.55%, Yes Bank up by 1.50% and Power Grid up by 1.47%. On the flip side, Tata Motors - DVR down by 1.42%, Tata Motors down by 0.76%, Bosch down by 0.69%, Bharti Airtel down by 0.65% and Kotak Mahindra Bank down by 0.54% were the top losers.

Asian markets were trading in red, Hang Seng was down by 0.7%, Nikkei 225 down by 0.76%, KOSPI Index down by 0.32%, Jakarta Composite down by 0.3% and FTSE Bursa Malaysia KLCI down by 0.31%.