Benchmarks trim gains; Sensex holds 28,200 level

After a smart up move in opening trades, Indian equity markets pared some gains and are currently moving in a narrow range. The BSE benchmark moved up 163 points, while NSE benchmark was up by 55 points as market participants indulged in widening their bets after the government listed the much-awaited GST Bill for consideration and passage in Rajya Sabha’s agenda for this week. Sentiments got further boost with the report that manufacturing activities gathered pace slightly in July compared to the previous month to post a four-month high expansion on high demand from both domestic and external markets. The widely-tracked Nikkei purchasing managers' index (PMI). During July 2016 inched up to 51.8 points as against 51.7 in the previous month, indicating a further improvement in overall business conditions across the sector. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Indian rupee strengthened for the fifth straight day, rising 26 paise, to trade at 66.76 against the dollar on sustained selling of the US currency by exporters and banks amid sustained foreign fund inflows. Meanwhile, Auto stocks were among the top gainers with automaker Maruti Suzuki leading the gains followed by strong July sales. Maruti Suzuki clocked its highest-ever monthly domestic sales in July, reporting a growth of 13.9%. The July domestic sales stood at 125,778 units against 110,405 units in the same month last year. Good buying was also witnessed in steel stocks as the Union Minister for Steel Birender Singh stated that the Centre is making all efforts to boost steel production so that India could become the second largest steel producer in the world.

On the global front, Asian markets were trading mostly higher on Monday, as the chances of a U.S. interest-rate increase diminished, after the nation’s economic growth for the second quarter came in below expectations. Back home, barring Capital Goods index which lost 0.76%, all the other indices were in the positive territory, with Auto, information technology (IT) and Metal indices being major gainers. In scrip specific development, L&T gained after the company's net profit for the quarter ended June grew 46% to Rs 610 crore against Rs 419 crore for the corresponding quarter of the previous year. on the other hand, Astra Microwave Products has dipped nearly 9% to Rs 115 on the BSE in an otherwise strong market after the company reported net loss of Rs 2.43 crore for the quarter ended June 30, 2016 (Q1FY17), because of lower operational income.

The market breadth remained optimistic as there were 1421 shares on the gaining side against 915 shares on the losing side, while 128 shares remained unchanged.

The BSE Sensex is currently trading at 28215.35, up by 163.49 points or 0.58% after trading in a range of 28077.42 and 28284.85. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.13%, while Small cap index up by 0.87%.

The top gaining sectoral indices on the BSE were Auto up by 1.46%, IT up by 1.45%, TECK up by 1.35%, Metal up by 1.22% and Realty up by 0.83%, while Capital Goods down by 0.76% was the sole losing index on BSE.

The top gainers on the Sensex were TCS up by 3.04%, Maruti Suzuki up by 2.52%, Bajaj Auto up by 2.52%, Wipro up by 2.51% and Tata Motors up by 2.03%. On the flip side, ICICI Bank down by 2.17%, Larsen & Toubro down by 1.78%, Lupin down by 0.62%, Coal India down by 0.30% and NTPC down by 0.13% were the top losers.

Meanwhile, the government is considering an initiative to merge state owned  oil companies in order to create one of the largest players on the world stage, whose revenue will dwarf global energy major Chevron which competes with US conglomerate General Electric.

Union Minister for Petroleum and Natural Gas Dharmendra Pradhan has said that the government is deliberating on the issue of merging of state-owned exploration and production (E&P) companies and oil marketing firms in the public sector to create a behemoth. He said with crude oil prices falling, the profits and margins of state-owned E&P firms ONGC and Oil India were getting eroded and directly hitting on profits.

India's top six public listed oil firms run by the government have a combined market value of $77 billion. In financial year 2015-2016, they reported Rs. 45,000 crore in profit and Rs. 9.32 lakh crore in revenue. If the idea materializes, this will be India's largest firm in terms of turnover, net profit, capital expenditure and market capitalization. Its market value can be bigger than India's Reliance Industries. Globally too, the merged entity's market value and financial powers would challenge that of Russia's Rosneft and Britain's BP Plc.

The CNX Nifty is currently trading at 8694.10, up by 55.60 points or 0.64% after trading in a range of 8650.80 and 8711.30. There were 41 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were TCS up by 3.08%, Tata Motors - DVR up by 3.05%, Hindalco up by 2.92%, Wipro up by 2.68% and Maruti Suzuki up by 2.53%. On the flip side, ICICI Bank down by 2.23%, Larsen & Toubro down by 1.68%, Tech Mahindra down by 1.29%, Kotak Mahindra Bank down by 0.84% and Lupin down by 0.64% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI was up by 0.62%, KOSPI Index rose 0.7%, Nikkei 225 jumped 0.24%, Taiwan Weighted surged 1.07%, Jakarta Composite increased 2.33% and Hang Seng was up by 1.46%. On the other hand, Shanghai Composite decreased 1.11%.