Benchmarks surrender to selling pressure after positive start

Reversing gears, Indian benchmark indices slipped into negative territory on profit booking in frontline blue-chip stocks and in absence of positive triggers which could have taken the markets higher. Earlier the market started the session on positive note tracking firm trade in other regional markets, but IT major infosys' result came as a strong wind, which blew away all earlier gains and pushed the market off the cliff to lowest level of the session. Shares of Infosys slumped over 9 percent after posting lower-than-expected dollar revenue growth in the first quarter and lower guidance of constant currency revenue growth in FY 17 to 10.5 percent -12 percent from 11.5 percent -13.5 percent earlier.   However, investors got some comfort with report that Monsoon rains in India were 11 per cent above average in the week ended July 13. The June-September monsoon has so far delivered 4 percent higher rainfall than average. Some support also came with hopes for smooth passage of much-awaited GST bill in the coming monsoon session of the parliament, after Congress leadership accepted the NDA government's invitation for further negotiations and discussion on alternative proposals on capping of the rate.

On the global front, Asian markets gained for a fifth-straight session on Friday following yet another record close on Wall Street and after China released data showing the economy grew more than expected in the second quarter. China's economy grew 6.7 percent in the second quarter from a year earlier, steady from the first quarter and slightly better than expected as the government stepped up efforts to stabilise growth in the world's second-largest economy. Markets around the world are gaining on expectations central banks around the world will ramp up stimulus measures, while a strong reading on US jobs last week also fired up confidence. Further, Japanese equities rallied and the yen fell on prospects for stimulus.

Back home, stocks from Consumer Durables, Auto and FMCG counters were supporting the market, while those from information technology (IT), Power and Realty counters were adding to the underlying cautious undertone. In scrip specific development, Titan Company rallied after the company signed a share purchase agreement to acquire 61 percent in Carat Lane Trading for a cash consideration of Rs 357.24 crore. Moreover, Biocon gained after the company announced that its partner Fujifilm Pharma Co has launched insulin Glargine in Japan.

The market breadth remained pessimistic as there were 872 shares on the gaining side against 1291 shares on the losing side, while 123 shares remained unchanged.

The BSE Sensex is currently trading at 27799.33, down by 142.78 points or 0.51% after trading in a range of 27742.26 and 28048.70. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in mix; the BSE Mid cap index was up by 0.36%, while Small cap index was down by 0.37%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.45%, Auto up by 1.34%, FMCG up by 0.74%, Metal up by 0.51%, Capital Goods up by 0.10% while, IT down by 5.07%, TECK down by 3.98%, Power down by 0.67%, Realty down by 0.44%, PSU down by 0.41% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.49%, Adani Ports &Special up by 2.38%, Tata Motors up by 2.21%, Hindustan Unilever up by 1.69% and Tata Steel up by 1.66%. On the flip side, Infosys down by 9.02%, TCS down by 2.56%, NTPC down by 1.99%, Wipro down by 1.26% and ICICI Bank down by 1.12% were the top losers.

Meanwhile, Overseas Investments or outward foreign direct investments by the Indian firms in the month of June fell by 3.2% to $1.86 billion from $1.92 billion in the same month last fiscal. According to the RBI data, the overseas investments in the month of May 2016 had stood at $2.69 billion.

The total outward foreign direct investment of $1.86 billion was in the form of equity, loan and issue of guarantee. Of the total investment equity, loan and issue of guarantee stood at $610.87 million, $246.51 million and $1003.16 million respectively in the month of June 2016, as compared to $485.07 million, $246.01 million and $1190.97 million respectively during June 2015.

The major investors overseas during the month included Tata Communications $483 million in a fully-owned subsidiary in Mauritius and Strides Acrolab which committed $130.16 million in the wholly-owned subsidiary in Singapore. Tata Communications also invested $67 million in two separate wholly-owned units in Singapore.

The CNX Nifty is currently trading at 8523.85, down by 41.15 points or 0.48% after trading in a range of 8512.75 and 8594.80. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 2.49%, Mahindra & Mahindra up by 2.25%, Tata Motors up by 2.21%, Hindustan Unilever up by 1.82% and Tata Steel up by 1.80%. On the flip side, Infosys down by 9.64%, TCS down by 2.63%, Tech Mahindra down by 2.49%, NTPC down by 2.36% and Wipro down by 1.38% were the top losers.

All the Asian markets barring Shanghai Composite which was down marginally by 0.05%, were trading in green. KOSPI Index was up by 0.29%, FTSE Bursa Malaysia KLCI was higher by 0.56%, Jakarta Composite added 0.52%, Taiwan Weighted inched up by 0.75%, Hang Seng gained 0.19% and Nikkei 225 surged by 0.69%.