Markets trade flat with positive bias in range-bound session of trade

In the extremely range-bound session of trade, Indian benchmark indices were now trading flat with bit of positive bias as investors and foreign funds were adopting a cautious approach, amid mixed global cause. Sentiments got some support with the report that the Southwest monsoon rainfall has shown a marginal rise of one per cent with a good amount of precipitation in several parts of the country for the period between June 1 and July 6, 2016. All regions, barring the east and northeast have started recording monsoon above the normal. Investors also got some confidence with the newly appointed Minister of State for Finance Santosh Gangwar’s statement that the government is confident of getting the much-delayed GST Bill passed in the upcoming Monsoon session of Parliament, beginning later this month. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 265.63 crore on July 05, 2016. However, markets participants remained cautious with the US stating that India’s growth rate target of 7.5% seems 'overstated' due to 'depressed investor sentiment' stemming from its failure to implement crucial market reforms, but it lauded Reserve Bank governor Raghuram Rajan for his 'monetary stewardship'.

On the global front, Asian markets were trading mixed despite bounce back in the US markets overnight, after an upbeat service sector activity data in the month of June. Back home, stocks from Realty, Metal and Banking counters were supporting the markets’ uptrend, while those from IT, Capital Goods and Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, ITD Cementation India surged after its joint venture has secured orders worth of Rs 2,830 crore to build parts of phase-III of Mumbai metro project. Moreover, Claris Lifesciences rallied after the company received the Abbreviated New Drug Application (ANDA) approval for Tobramycin Injection USP, 80mg/2mL and 1,200mg/30mL multiple dose vials, in the US.

The market breadth remained optimistic as there were 1439 shares on the gaining side against 855 shares on the losing side, while 112 shares remained unchanged.

The BSE Sensex is currently trading at 27222.40, up by 55.53 points or 0.20% after trading in a range of 27161.37 and 27250.27. 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 0.03%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Realty up by 1.89%, Metal up by 1.17%, Bankex up by 0.34%, FMCG up by 0.33% and PSU up by 0.31%, while IT down by 0.94%, TECK down by 0.82%, Capital Goods down by 0.24%, Oil & Gas down by 0.14% and Auto down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.40%, HDFC up by 1.34%, Hindustan Unilever up by 1.26%, Cipla up by 1.17% and Bharti Airtel up by 1.05%. On the flip side, Adani Ports &Special down by 1.49%, NTPC down by 1.28%, Infosys down by 1.10%, Larsen & Toubro down by 0.77% and TCS down by 0.71% were the top losers.

Meanwhile, Moody's which has earlier forecasted India’s GDP growth to 7.5% for the next two years has said that India’s GDP growth is likely to face challenge in next two years, due to sluggish global demand, high leverage in some corporate sectors and impaired credit supply. Further, it said that investment activity for at least several quarters will be affected by continued high corporate leverage, low nominal domestic growth and lack of corporate pricing power.

According to the Moody’s Investors Services quarterly publication report 'Inside India' that looks at major credit trends in the country, the corporate deleveraging is likely to take time as weak global demand has impacted cash flows and commodity producing. It added that measures like imposition of minimum import price of steel will have only little positive result, while spectrum auctions will raise corporate leverage.

Though Moody's estimated a downside risk to the forecast because of potential negative external or domestic shocks, but remained positive on the India's medium-term potential, adding that it will be supported by steady implementation of policy reforms, which will improve the business environment, state of infrastructure and productivity growth. 

Moody's  with a long term outlook said that India has better opportunities for ‘catch-up’ GDP growth at levels higher than similarly rated peers provided improvements in the business environment, increase in the infrastructure investment and in the share of manufacturing and foreign direct investment in the economy.

Commenting on the Brexit impact on India’s financial markets, Moody’s said that the effects will be limited as exports to the UK and the rest of the European Union account for 0.4 per cent and 1.7 per cent of India's Gross Domestic Product respectively.

The CNX Nifty is currently trading at 8339.25, up by 3.30 points or 0.04% after trading in a range of 8321.85 and 8345.60. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.64%, Ambuja Cement up by 1.46%, Dr. Reddys Lab up by 1.35%, Hindustan Unilever up by 1.27% and HDFC up by 1.17%. On the flip side, Zee Entertainment down by 2.90%, Bharti Infratel down by 2.15%, HCL Tech down by 2.12%, Tech Mahindra down by 1.87% and Adani Ports &Special down by 1.75% were the top losers.

Asian markets were showing mixed trend, KOSPI Index increased 1.04%, Taiwan Weighted gained 0.8% and Hang Seng was higher by 0.78%. On the other hand, Nikkei 225 declined by 0.48%, Jakarta Composite was lower by 0.9% and Shanghai Composite decreased by 0.47%.