Weak trade continues in late morning session

Indian equity benchmarks continued their weak trade in the late morning session on account of selling in frontline blue chip counters. Investors remain wary ahead of Thursday's British vote, as well as Federal Reserve chief Janet Yellen's two-day testimony before Congress starting later on Tuesday, she might offer clues on the timing of the next US interest rate increase. However, losses remained capped with report of good advancement of monsoon, which after a delay is now romping its way through central and north India. Monsoon rains have covered nearly half of the country, accelerating planting of summer crops like paddy rice, soybeans, cotton and pulses. The June to September monsoon is crucial for farm output and economic growth in India, where just over half of arable land is fed by rain. Moreover, in view of the prevailing shortage of pulses and their rising prices, Commerce Minister Nirmala Sitharaman said, the country is negotiating with neighbouring Myanmar and other countries towards creating a buffer stock of up to eight lakh tonnes eventually.

On the global front, Asian markets were trading mostly in green on Tuesday on growing expectations that Britain will vote to stay in the European Union, but gains slowed as investors awaited an economic report by the head of the U.S. Federal Reserve. Further, China’s stocks rose for a third day, sending the benchmark index toward its longest stretch of gains in more than two months, as an increase in trading fueled a rally for brokerages before this week’s UK referendum on European Union membership.

Back home, stocks from Power, Capital Goods and Banking counters were among the worst performers, while Auto, PSU and Metal counters battled out against all odds. In scrip specific development, shares of Supreme Infrastructure surged after the company bagged (declared L1) two EPC projects of CIDCO worth Rs 397.68 crore. Eros International Media gained after the company entered into a strategic alliance with veteran producer Vashu Bhagnani by signing a term sheet to acquire a 50% stake in his film company -- Puja Entertainment & Films.

The market breadth on BSE was optimistic, out of 2194 stocks traded, 1203 stocks advanced, while 837 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26818.18, down by 48.74 points or 0.18% after trading in a range of 26776.16 and 26925.64. There were 11 stocks advancing against 18 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 gained 0.40%.

The top gaining sectoral indices on the BSE were Auto up by 0.47%, PSU up by 0.34%, Metal up by 0.27%, Oil & Gas up by 0.22% and Realty up by 0.21%, while Power down by 0.34%, Capital Goods down by 0.29%, Bankex down by 0.22%, TECK down by 0.11% and FMCG down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.29%, Mahindra & Mahindra up by 1.11%, Adani Ports &Special up by 1.09%, ONGC up by 1.03% and ICICI Bank up by 0.86%. On the flip side, NTPC down by 1.36%, Axis Bank down by 0.91%, Asian Paints down by 0.89%, HDFC Bank down by 0.76% and Larsen & Toubro down by 0.72% were the top losers.

Meanwhile, with an aim to push labor reforms, the labour ministry has lined up amendments of four key laws for the Cabinet’s approval. The laws include Shop & Establishment Act and also amendments to the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, amendments to the Maternity Benefits Act, 1961 and the amendments to the Employees' Compensation Act, 1923. The decision was taken after the meeting between the officials of the labour ministry and the Prime Minister's Office (PMO) last week. The idea is to line up enough legislation for Parliament’s approval in the upcoming monsoon session.

Among the four legislation, first that could soon get an approval from Cabinet is the Shop & Establishment Act, which will pave the way for retailers in order to remain open round the clock. The model Shop & Establishment Act is expected to come up for cabinet’s approval in this week. Under the model Shop & Establishment Act, which will be made effective through a notification, bricks-and-mortar stores will have the flexibility to remain open round the clock.  Further the Shop & Establishment Act will provide equal opportunity in order to compete with their online peers. At present, shops remains closed on a specified day depending on traditional practices and there is no provision for shops to remain open round the clock.

Moreover, as proposed by Jaitley in the previous budget a year ago the other amendments to the EPF & MP Act will provide EPFO subscribers an option of choosing between EPF and the New Pension System. However, the amendments to the Maternity Benefit Act could more than double the maternity leave to 26 weeks from the existing 12 weeks.

The CNX Nifty is currently trading at 8227.25, down by 11.25 points or 0.14% after trading in a range of 8210.00 and 8257.25. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.07%, Bajaj Auto up by 1.22%, Mahindra & Mahindra up by 1.09%, Adani Ports &Special up by 1.06% and ONGC up by 1.03%. On the flip side, NTPC down by 1.72%, Tata Power down by 1.20%, BHEL down by 1.17%, Ambuja Cement down by 0.93% and Larsen & Toubro down by 0.82% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 0.01%, Shanghai Composite gained 0.27%, Jakarta Composite increased 0.22%, Taiwan Weighted jumped 0.37%, Nikkei 225 added 1.28% and Hang Seng was up by 0.5%. On the flip side, KOSPI Index was down by 0.3%.