Benchmarks pare some early losses; still continue to trade in red

Recovering from day’s low, Indian benchmark indices have gained momentum however were still trading below the neutral line on persistent profit-booking by funds and retail investors, amid mixed quarterly earnings of India Inc for the quarter ended June 30, 2016. Sentiments remained subdued with the private report stating that India has ranked a low 110 out of 149 nations assessed on where they stand with regard to achieving the Sustainable Development Goals, according to a new index which is topped by Sweden and shows all countries face major challenges in achieving these ambitious goals.  Besides, weak trend in Asian stocks coupled with depreciation in rupee value also weighed on the sentiment. Indian rupee depreciated by 3 paise to 67.20 against the US dollar in early trade due to sustained demand for the American currency from importers and banks. However, losses remained capped with a private poll stating that India's economy will hum along at a solid pace for the remainder of this fiscal year provided structural reforms are passed, while above-target inflation means the Reserve Bank of India will only cut rates once more this year.

On the global front, Asian markets slipped on Friday as expectations of further stimulus following Britain's vote to leave the European Union were tempered by the European Central Bank's decision to keep its monetary policy intact. Further, Japanese stocks declined after central bank Governor Haruhiko Kuroda’s opposition to so-called helicopter money became clear. US stocks closed lower on Thursday, snapping the Dow's nine-day winning streak, as oil prices weighed and the market consolidated ahead of next week's Fed meeting. Back home, stocks from Power, Capital Goods and Realty counters were supporting the market, while those from information technology (IT), FMCG and Banking counters were adding to the underlying cautious undertone.

In scrip specific development, Biocon has surged after the company reported 35% year-on-year (YoY) jump in its consolidated net profit of Rs 167 crore for the first quarter ended June 30, 2016. Further, Bharat Financial Inclusion (formerly SKS Microfinance) has rallied after the company reported nearly four-fold jump in net profit at Rs 236 crore for the quarter ended June 30, 2016.

The market breadth remained optimistic as there were 1187 shares on the gaining side against 911 shares on the losing side, while 146 shares remained unchanged.

The BSE Sensex is currently trading at 27680.44, down by 30.08 points or 0.11% after trading in a range of 27646.21 and 27764.19. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Power up by 1.22%, Capital Goods up by 0.86%, Realty up by 0.63%, Auto up by 0.41% and Oil & Gas up by 0.21%, while IT down by 0.63%, TECK down by 0.33%, FMCG down by 0.15%, Bankex down by 0.10% and Metal down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.15%, GAIL India up by 2.14%, Tata Motors up by 1.11%, Larsen & Toubro up by 0.85% and Adani Ports &Special up by 0.81%. On the flip side, Bajaj Auto down by 1.32%, Infosys down by 1.06%, Hindustan Unilever down by 0.96%, Wipro down by 0.83% and Coal India down by 0.72% were the top losers.

Meanwhile,  the country's foreign direct investment (FDI) has got a big push by the launch of Make in India programme in September 2014 and surged up by 46 per cent during October 2014 and May this year. The FDI during October 2014 and May this year has jumped up to 61.58 billion from $42.31 billion in comparison to previous 20 months (February 2013 to September 2014).  During the period, the sectors which attracted maximum FDI include services, trading, automobile and power. Commerce and Industry, Nirmala Sitharaman has said that to further boost the investment environment and bring in more foreign capital, the government is also taking various steps like opening up FDI in many sectors, carrying out FDI related reforms and improving ease of doing business. She added that DIPP has advised ministries and states to simplify and rationalise the regulatory environment through business process re-engineering and use of information technology. The `Make in India’ initiative launched in September 2014, aims to promote India as an important investment destination and a global hub for manufacturing, design, and innovation. Last fiscal 2015-16, the country has received $40 billion FDI which increased by 29 percent from $30.93 billion from the previous fiscal.

The CNX Nifty is currently trading at 8503.90, down by 6.20 points or 0.07% after trading in a range of 8489.80 and 8525.40. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.40%, GAIL India up by 2.03%, Bharti Infratel up by 1.91%, Tata Power up by 1.70% and Idea Cellular up by 1.66%. On the flip side, Bajaj Auto down by 1.53%, Bosch down by 1.38%, Infosys down by 1.11%, ACC down by 0.98% and Hindustan Unilever down by 0.96% were the top losers.

Asian markets were trading in red; Nikkei 225 declined 1.19%, Hang Seng decreased 0.5%, Taiwan Weighted dropped 0.48%, Jakarta Composite shed 0.69%, Shanghai Composite fell 0.72%, FTSE Bursa Malaysia KLCI slipped 0.08% and KOSPI Index was down by 0.07%.