Benchmarks reverse gears; enters into positive territory

Reversing gears, Indian equity markets have now entered into positive territory in late morning session on emergence of buying by funds and retail investors in selected stocks. Further, broader indices continuing their outperformance were trading in green with gains of over half a percent. Market participants got some confidence with the report that Crop planting has jumped 23.8 per cent in the past one week helped by heavy rains during the period, with the current overall planting standing at 3.28 per cent higher than last year at 692.98 lakh hectare. The increase was largely seen in acreage of rice, pulses and coarse cereals. Some support also came with the reports that Finance Minister Arun Jaitley will meet his counterparts in states to discuss proposed amendments to the GST Bill on Tuesday, with the likely listing of GST Bill in Rajya Sabha this week. However, investors remained cautious after the International Monetary Fund (IMF) warned that headwinds from weaknesses in Indian corporate and bank balance sheets, slowing pace of reforms and sluggish exports may weigh on the country's economic growth. The reported listed as many as six core areas that need further reforms in India. These are product market, labour, infrastructure, banking, legal system and property rights, and fiscal structural reforms.

On the global front, Asian market were trading mostly in green on Monday as a weaker yen sent shares in Tokyo higher and investors awaited policy meetings by the Federal Reserve and Bank of Japan this week. Japan's central bank -Bank of Japan (BOJ) undertakes monetary policy review on 28-29 July 2016. Meanwhile, consumer stocks led gains in Australia, while equities in New Zealand extended gains at an all-time high.

Back home, stocks from PSU, Oil & Gas and Realty counters were supporting the markets’ uptrend, while those from Banking and information technology (IT) counters were adding to the underlying cautious undertone. In scrip specific development, Sanofi India rallied after the company registered a surge of 32.87% in its net profit at Rs 85.30 crore for the second quarter ended June 30, 2016 as compared to Rs 64.20 crore for the same quarter in the previous year. On the other hand, Axis Bank declined after the bank reported 21% year on year (YoY) decline in net profit at Rs 1,556 crore for the quarter ended June 30, 2016 (Q1FY17), due to higher provisioning for bad loans. The bank had registered a profit of Rs 1,978 crore in the same quarter last fiscal.

The market breadth remained optimistic as there were 1504 shares on the gaining side against 664 shares on the losing side, while 125 shares remained unchanged.

The BSE Sensex is currently trading at 27814.53, up by 11.29 points or 0.04% after trading in a range of 27736.51 and 27833.52. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.66%, while Small cap index was up by 0.89%.

The top gaining sectoral indices on the BSE were PSU up by 1.38%, Oil & Gas up by 1.34%, Realty up by 1.08%, Consumer Durables up by 0.67% and Power up by 0.52%, while Bankex down by 0.09%, IT down by 0.09% and TECK down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.39%, HDFC up by 1.24%, Maruti Suzuki up by 1.10%, ONGC up by 0.97% and GAIL India up by 0.75%. On the flip side, Dr. Reddys Lab down by 2.94%, Axis Bank down by 2.07%, Bajaj Auto down by 0.69%, Hindustan Unilever down by 0.66% and Bharti Airtel down by 0.58% were the top losers.

Meanwhile, India has received $ 5.34 billion Foreign Direct Investment (FDI) in the first two months of the current financial year, indicating that the government has been able to create a suitable climate in which the foreign investors feel confident that interest is protected.

During April-May the country attracted $4.76 billion FDI under automatic route, while $582 million came through the approval route. During April-May, defence received no FDI, while pharmaceuticals attracted $ 452.86 million foreign inflows, followed by air transport which attracted $ 5.65 million, information and broadcasting attracted $ 39.2 million and retail trading attracted $ 7.94 million.

Minister of State for Finance Arjun Meghwal has said that the government has made changes in the FDI policy in several sectors like defence, pharmaceuticals, aviation, food retailing and broadcast to ensure that India remains increasingly attractive and investor friendly investment destination.

Meghwal also said that in the first quarter, April-June, of 2016-17 Foreign Portfolio Investors pumped in Rs 10,4561 crore. He added that to attract global investor, a number of reforms were taken in the FDI policy and FPI policy.

The CNX Nifty is currently trading at 8547.05, up by 5.85 points or 0.07% after trading in a range of 8517.20 and 8551.65. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.13%, Bharti Infratel up by 2.13%, Bank of Baroda up by 1.69%, BPCL up by 1.59% and SBI up by 1.39%. On the flip side, Dr. Reddys Lab down by 2.61%, Axis Bank down by 2.16%, Kotak Mahindra Bank down by 1.19%, Hindustan Unilever down by 0.69% and Bajaj Auto down by 0.64% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.17%, Shanghai Composite increased 0.24%, Nikkei 225 added 0.32% and Jakarta Composite was up by 0.44%. On the flip side, Taiwan Weighted decreased 0.59%, Hang Seng slipped 0.23% and KOSPI Index was down by 0.1%.