Benchmarks continue to trade in green in late morning session

After getting a firm start, Indian benchmark indices trimmed some gains in early trade, but continue to trade in green in the late morning session on continued buying activities by both funds and retail investors. The benchmarks took a breath in today’s session after running wild in previous session with Sensex gaining around 500 points, while Nifty rose around 150 points. The yesterday’s rally was mainly driven by firm global clues after strong US monthly jobs data reassured investors about the health of the world's largest economy. In today’s session investors got some comfort with the global rating agency Crisil's latest report that Indian economy is likely to grow at 7.9 percent in the current fiscal provided the country receives normal monsoon as it will boost agriculture growth and lift rural demand. The rating agency also expects the Reserve Bank of India to continue its accommodative monetary stance and cut the repo rate by another 25 bps this fiscal. Also, monsoon rains will cover the whole of India in the next 48 hours, the country's weather office said, boosting hopes of a rise in farm output and incomes after two straight years of drought.  Planting of crops has already  jumped 88 per cent in the past week in step with the monsoon's surge since the end of June, raising hopes of a much higher production and moderate prices of pulses and rice.

On the global front, Asian stock markets were trading mostly higher on Tuesday amid expectations of fresh stimulus from global central banks and as worries about the political uncertainty in Britain eased. Further, Japanese market is sharply higher for a second straight session, after Prime Minister Shinzo Abe's ruling coalition clinched victory in the upper house elecions, while a softer yen also aided sentiment. Meanwhile, US stocks edged higher with the S&P 500 hitting record highs on Monday after better-than-expected jobs data signalled that the economy is picking up pace. Back home, stocks from Metal, Oil & Gas and Banking counters were supporting the markets’ uptrend, while those from information technology (IT), Capital Goods and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, shares of Edelweiss Financial Services gained after the company said it plans to enter the general insurance business. Furthermore, Shriram EPC rallied after the company’s board approved preferential issue of shares to the holding company and conversion of the working capital term loan of the lenders into equity shares.

The market breadth remained pessimistic as there were 1115 shares on the gaining side against 1139 shares on the losing side, while 127 shares remained unchanged.

The BSE Sensex is currently trading at 27694.22, up by 67.53 points or 0.24% after trading in a range of 27667.81 and 27760.81. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.44%, while Small cap index was up by 0.15%.

The gaining sectoral indices on the BSE were Metal up by 1.37%, Oil & Gas up by 1.14%, Bankex up by 0.92%, Consumer Durables up by 0.84%, Realty up by 0.82% while, IT down by 0.25%, Capital Goods down by 0.25%, TECK down by 0.14%, FMCG down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.26%, Tata Steel up by 1.99%, Axis Bank up by 1.61%, ONGC up by 1.47% and Maruti Suzuki up by 1.36%. On the flip side, Coal India down by 1.25%, Sun Pharma down by 1.01%, Cipla down by 0.82%, Dr. Reddys Lab down by 0.76% and Hindustan Unilever down by 0.52% were the top losers.

Meanwhile, trying out all possible ways to control pulse prices, the government has set up a committee under the chief economic adviser Arvind Subramanian to frame a long-term policy on pulses, which will look into options of increasing the Minimum Support Price (MSP) and the bonus to promote pulse cultivation.

The Arvind Subramanian-headed panel will give its report in two weeks and will suggest an appropriate policy to promote cultivation of lentils in India. The decision came following a high-level committee, chaired by Finance Minister Arun Jaitely along with Food Minister Ram Vilas Paswan and Urban Development Minister M. Venkaiah Naidu, to review the availability of pulses and their prices.

Food minister has expressed hopes that prices will fall in two-three months. To address domestic shortage through imports, the minister added that the government has decided to talk to other pulse-growing countries like Canada for long-term import of lentils on a government-to-government basis that will encourage farmers in those countries to produce more. The government has also decided to increase the buffer stock for pulses to 20 lakh tonnes from eight lakh tonnes to contain price rise. There could be more incentive in the form of a bonus if the panel decides. The production of pulses in India is expected to increase to 20 mt this year from 17 mt last year, following a sharp increase in MSP announced earlier. So far the government has procured over 1.19 lakh tonnes of pulses in 2016-17 crop year (July-June) that are being offered to state governments for retail distribution at a subsidised rate of Rs 120 per kg.

The CNX Nifty is currently trading at 8489.10, up by 21.20 points or 0.25% after trading in a range of 8479.20 and 8503.45. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.92%, Grasim Industries up by 2.32%, ICICI Bank up by 2.32%, Tata Steel up by 2.09% and Axis Bank up by 1.60%. On the flip side, Tata Power down by 1.42%, Aurobindo Pharma down by 1.33%, Coal India down by 1.26%, BHEL down by 1.19% and Dr. Reddys Lab down by 1.13% were the top losers.

Asian markets were trading mostly in green, KOSPI Index was up by 0.08%, Taiwan Weighted gained 0.49%, Jakarta Composite was higher by 0.72%, Hang Seng added 0.6%, Nikkei 225 surged by 2.85% and Shanghai Composite was up by 0.08%. On the other hand, FTSE Bursa Malaysia KLCI declined by 0.3%.