Benchmarks continue weak trade; Sensex holds 28000 mark

Indian equity benchmarks continued their weak trade in the late afternoon session on account of selling in front line clue chip counters. Though, the losses remain capped with Finance Minister Arun Jaitley’s statement that India saw a record 53% increase in FDI in last two years as the investment climate brightened due to steps taken to foster growth, price stability and fiscal prudence which also improved the overall macroeconomic stability. European stocks traded higher helped by a rally in bank stocks as investors digested the conclusion of a two-day policy meeting of the Bank of Japan (BOJ). Back home, investors have started eyeing the much-awaited GST bill for consideration and passage in Rajya Sabha’s agenda for the next week. Traders were seen piling position in Oil & Gas, Auto and Realty stocks while selling was witnessed in Consumer Durables, Bankex and Capital Goods sector stocks. In scrip specific development, Gujarat Alkalies and Chemicals was trading firm as the company’s net profit nearly doubled in the April-June quarter. The company reported a net profit of Rs 86 crore in Q1 compared to Rs 44 crore net profit in the corresponding quarter of last fiscal.

On the global front, Asian markets were trading mostly in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,650 and 28,100 levels respectively. The market breadth on BSE was positive in the ratio of 1269:1255, while 220 scrips remained unchanged.

The BSE Sensex is currently trading at 28093.27, down by 115.35 points or 0.41% after trading in a range of 28076.48 and 28233.47. 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 0.87%, while Small cap index gained 0.44%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.90%, Auto up by 0.83%, Realty up by 0.49%, Power up by 0.30% and PSU up by 0.21% while, Consumer Durables down by 0.67%, Bankex down by 0.66%, Capital Goods down by 0.57%, TECK down by 0.27% and IT down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.03%, Cipla up by 1.93%, Tata Steel up by 1.77%, Lupin up by 1.61% and Adani Ports & Special Economic zone up by 1.46%.

On the flip side, ICICI Bank down by 2.94%, Bharti Airtel down by 2.46%, HDFC down by 1.93%, Wipro down by 1.45% and Asian Paints down by 1.09% were the top losers.

Meanwhile, the India Meteorological Department (IMD), ahead of its second stage monsoon forecast has predicted that with reduced chances of La Nina weather event, the monsoon rainfall this year is likely to be normal and not 'above normal', even though monsoon rains in India were 4 percent below average in the last one week.

IMD in its second stage forecast issued in June had forecast the average rainfall to be 106% of the normal monsoon rainfall of 89 mm (with +/-4% model error). The July climate outlook issued by IMD's Regional Climate Centre for south Asia expects July, August, September rainfall over India to be more than 100% of the normal rainfall but not above normal 104% to 110%, as forecasted by the IMD.

The experimental Climate Forecast System (CFS) model of Indian Institute of Tropical Meteorology (IITM) too indicated slight reduction in rainfall during August, September based on the initial conditions of June as compared to its forecast based on initial conditions of May. The Australian weather office has also said that the Indian Ocean Dipole (IOD) has strengthened in recent weeks and there are only 50% chances of La Nina. A negative IOD can decrease rainfall over India while La Nina event normally helps rainfall over the Indian sub-continent.

However, Ministry of Earth Sciences (MoES), August and September rainfall are still expected to be 'reasonably okay'. "It will help fill up reservoirs by September end. Meanwhile, CRISIL in its latest report stated that there is still risk of excess rains and a good spread of rains over time and region in August can help increase GDP growth rate to 7.9% in FY 17. It also expects agriculture to grow by 4 per cent and consumer price inflation to be restricted to 5 per cent in 2016-2017.

The CNX Nifty is currently trading at 8640.95, down by 25.35 points or 0.29% after trading in a range of 8636.20 and 8670.35. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 3.75%, Bajaj Auto up by 2.05%, Tata Steel up by 1.92%, Tata Power up by 1.84% and Cipla up by 1.66%.

On the flip side, ICICI Bank down by 2.96%, BHEL down by 2.94%, Bharti Airtel down by 2.58%, HDFC down by 1.96% and Wipro down by 1.53% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 282.97 points or 1.28% to 21,891.37, Taiwan Weighted decreased 92.23 points or 1.02% to 8,984.41, Shanghai Composite decreased 14.98 points or 0.5% to 2,979.34, Jakarta Composite decreased 8.82 points or 0.17% to 5,290.40, KOSPI Index decreased 4.91 points or 0.24% to 2,016.19 and FTSE Bursa Malaysia KLCI decreased 3.77 points or 0.23% to 1,654.73.

On the other hand, Nikkei 225 increased 92.43 points or 0.56% to 16,569.27.

The European markets were trading in green; UK’s FTSE 100 increased 6.03 points or 0.09% to 6,727.09, France’s CAC increased 7.7 points or 0.17% to 4,428.28 and Germany’s DAX increased 64.61 points or 0.63% to 10,339.54.