Benchmarks continue firm trade in late afternoon session

Indian equity benchmarks continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters taking cues from global counterparts. The sentiments were on upbeat note on news about the monsoon covering the whole of the country and on the government’s liberal move to hike salaries of its employees and pension for retired people. The India Meteorological Department (IMD) yesterday stated that during the week ended June 29, monsoon rains were 1% above the long-term average. Traders were seen piling position in FMCG, Capital Goods and Oil & Gas sector stocks. In scrip specific development, KPIT Technologies was trading weak after the company stated that it expects decline in revenues of around 4% in June quarter (Q1) with a consequent drop in profitability. Maruti Suzuki India was trading in red after the country’s largest carmaker reported 13.9 percent drop in total sales in June at 98,840 units as against 114,756 in June 2015. The company’s domestic sales also tumbled 10.2 percent during the month to 92,133 units as against 102,626 in June 2015.

On the global front, the Asian markets were trading mostly in green while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,300 and 27,200 levels respectively. The market breadth on BSE was positive in the ratio of 1544:1013 while 137 scrips remained unchanged.

The BSE Sensex is currently trading at 27207.30, up by 207.58 points or 0.77% after trading in a range of 27061.40 and 27243.36. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.29%, while Small cap index was up by 0.80%.

The gaining sectoral indices on the BSE were FMCG up by 2.16%, Capital Goods up by 2.12%, Oil & Gas up by 1.85%, PSU up by 1.18% and Realty up by 1.02%.

The top gainers on the Sensex were ITC up by 3.61%, Dr. Reddy’s Lab up by 2.97%, Larsen & Toubro up by 2.86%, GAIL India up by 2.58% and Tata Steel up by 2.24%.

On the flip side, Coal India down by 0.93%, TCS down by 0.78%, Tata Motors down by 0.49%, Maruti Suzuki down by 0.49% and Asian Paints down by 0.45% were the top losers.

Meanwhile, once again putting them in gaining trajectory, India's manufacturing sector output surged to three-month high in June, driven by stronger demand, pointing to some improvement in the health of the sector. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) edged to 51.7 in June from 50.7 in May, a reading above 50 on the index indicates economic expansion.

According to the survey, the contributing factors to the upward movement in the PMI were stronger rates of growth in new orders and output. Incoming new work rose across the three broad areas of the manufacturing economy, as did production. The best-performing category was consumer goods. The domestic market continues to be the main growth driver, as the Indian economic upturn provides a steady stream of new business. Besides, there was also a sign of improvement in overseas markets, as new foreign orders rose in June following a decline in May.

Though the new export orders increased in June, the rate of expansion was only slight and below the long-run series average. Two of the three monitored market groups recorded higher levels of new business from abroad, the exception being intermediate goods.

Input costs in June increased for the ninth month running. The rate of inflation eased to the slowest since March, and was moderate overall. Concurrently, factory gate charges were broadly unchanged in June. Furthermore, there was broadly no change to manufacturing employment in India during June due to sufficient staff to work on both new and existing projects and others noting shortages of skilled labour in the country.

The CNX Nifty is currently trading at 8345.55, up by 57.80 points or 0.70% after trading in a range of 8308.65 and 8356.75. There were 39 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.33%, ITC up by 3.14%, Dr. Reddy’s Lab up by 3.12%, Larsen & Toubro up by 2.81% and GAIL India up by 2.66%.

On the flip side, Kotak Mahindra Bank down by 1.02%, Coal India down by 0.85%, TCS down by 0.77%, Tata Motors down by 0.57% and Adani Ports & Special Economic Zone down by 0.53% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 2.87 points or 0.1% to 2,932.48, KOSPI Index increased 16.97 points or 0.86% to 1,987.32, Taiwan Weighted increased 71.66 points or 0.83% to 8,738.24 and Nikkei 225 increased 106.56 points or 0.68% to 15,682.48.

On the other hand, Jakarta Composite decreased 34.45 points or 0.69% to 4,982.20 and FTSE Bursa Malaysia KLCI decreased 8.65 points or 0.52% to 1,645.43. Hong Kong Stock Exchange was closed on account of national holiday.

The European markets were trading in green; UK’s FTSE 100 increased 23.69 points or 0.36% to 6,528.02, France’s CAC increased 13.02 points or 0.31% to 4,250.50 and Germany’s DAX increased 38.1 points or 0.39% to 9,718.19.