Benchmarks magnify gains; Sensex above 27,200 mark

Indian equity benchmarks extended early gains to continue firm trade in late morning session, hovering near intra-day high level, on continued buying activities by both funds and retail investors. Sentiments got a boost with World Bank’s statement that India is a bright spot. The World Bank president has said that he is pleased with the progress that's been made in six priority areas. He added that Prime Minister Modi and his entire Cabinet have set extremely difficult and important targets. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Extending gains for the third consecutive day, Indian rupee appreciated by 9 paise to 67.43 against the US dollar on sustained selling of the American currency by banks and exporters. However, there was some cautiousness too, with the report that Core sector growth fell  sharply to a five-month low in May at 2.8% after hitting a 16-month high in April, indicating further softening in already weak industrial activity. Also, there are reports that India and Cyprus are poised to ink a new tax treaty which, like in the case of a similar deal with Mauritius, shuts the door on investors using the country’s tax loopholes to avoid paying taxes in India.

On the global front, Asian markets were trading mostly higher in early trade as investors resumed buying in riskier assets after near term worries post the Brexit continue to ease. Optimism about more stimulus from central banks, including the Bank of England, lifted investor sentiment. Overnight, Bank of England Governor Mark Carney hinted in a speech at providing further stimulus following Britain's vote to leave the EU.

Back home, all BSE sectoral indices were trading in the green. Among them, FMCG index gained the most by 2.27 percent, followed by Capital Goods 1.85 percent, Oil & Gas 1.60 percent and PSU 0.93 percent. In scrip specific development, Vikas EcoTech rallied after the company commenced the construction of Phase I of its manufacturing plant and innovation center at Dahej, Gujarat. On the other hand, Maruti Suzuki India has declined after the company registered a fall of 13.9% in its total car sales (Domestic + Export) for the month of June 2016 at 98,840 units, as against 114,756 units in June 2015.

The market breadth remained optimistic as there were 1430 shares on the gaining side against 734 shares on the losing side, while 105 shares remained unchanged.

The BSE Sensex is currently trading at 27221.37, up by 221.65 points or 0.82% after trading in a range of 27061.40 and 27227.26. 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 0.94%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were FMCG up by 2.27%, Capital Goods up by 1.85%, Oil & Gas up by 1.60%, PSU up by 0.93% and Bankex up by 0.58%, while there were no losers on the BSE sectoral indices.

The top gainers on the Sensex were ITC up by 4.12%, Dr. Reddys Lab up by 2.54%, Larsen & Toubro up by 2.39%, Tata Steel up by 2.02% and Axis Bank up by 1.31%. On the flip side, Coal India down by 0.62%, NTPC down by 0.54%, Asian Paints down by 0.49%, TCS down by 0.46% and Hero MotoCorp down by 0.40% were the top losers.

Meanwhile, the  retail inflation rate, as measured by monthly consumer price index for industrial workers, increased to 6.59 per cent in May from 5.86 per cent in the previous month on account of an increase in prices of food and beverages, mainly vegetables and pulses.

Vegetable price inflation rose 10.77 per cent in May from 4.82 per cent a month ago, while inflation rate for pulses increased 31.57 per cent in May from 34.13 a month ago. Cereals and products inflation rose 2.59 per cent as against 2.43 per cent in April.

According to data released by the Central Statistics Office, all India CPI-IW for May increased by 4 points and was pegged at 275 per cent. On one-month percentage change, it increased by 1.48 per cent between April and May, when compared with the increase of 0.78 per cent between the two months last year.

The maximum upward pressure to change in current index came from food group contributing 3.69 percentage points to the total change. At item-level, rice, wheat, arhar dal, gram dal, urd dal, groundnut oil, eggs, fish, fresh milk, chillies green, brinjal, cabbage, French bean, potato, tomato, sugar, petrol etc are responsible for the increase in the index.The indices of 31 centres are above all India index and other 42 centres indices are below national average. The indices of Pune, Salem, Vishakhapatnam, Bokaro and Varanasi centres remained at par with all India index.

The CNX Nifty is currently trading at 8348.65, up by 60.90 points or 0.73% after trading in a range of 8308.65 and 8353.90. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were ITC up by 3.89%, Dr. Reddys Lab up by 2.71%, BHEL up by 2.47%, Tata Steel up by 2.14% and Larsen & Toubro up by 2.12%. On the flip side, TCS down by 0.55%, NTPC down by 0.45%, Coal India down by 0.45%, Asian Paints down by 0.43% and Maruti Suzuki down by 0.31% were the top losers.

Asian markets were trading in green; Shanghai Composite rose 0.13%, KOSPI Index surged 1.19%, Taiwan Weighted gained 0.92%, Nikkei 225 added 0.65% and Hang Seng was up by 1.75%. On the flip side, Jakarta Composite decreased 0.56% and FTSE Bursa Malaysia KLCI was down by 0.3%.