Sensex holds early gains; Nifty inches towards 8,700 mark

Indian equity markets are holding their early gains on account of sustained buying by investors and foreign funds buoyed by a pick-up in infrastructure sector in June coupled with rising hopes of GST Bill passage this week. Two sets of data released on Monday suggested that India's manufacturing and infrastructure sectors are on a recovery path. While Nikkei India Manufacturing Purchasing Managers Index showed manufacturing activity grew at its fastest pace in four months in July, government data on eight core industries revealed a 5.2% expansion in June, compared with 2.8% in May and 3.1% in the year-earlier month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers Index edged higher in July, to 51.8 from 51.7 in June, led by higher sales, new orders for consumer goods and exports encouraged by the rupee's depreciation.  Meanwhile,  FMCG stocks like ITC and HUL rallied on renewed buying interest on expectations that rural volume growth may pick up pace after the IMD retained its earlier forecast of ‘above normal’ rains during the four-month season of monsoon that started in June. Further, Auto majors like Maruti Suzuki and M&M continued their uptrend for the second consecutive day after registering strong growth in domestic sales in July on improved consumer sentiment.

On the global front, Asian market were trading mostly lower on Tuesday as investors remained cautious ahead of the RBA policy meeting, wherein the officials are expected to cut rates. Further, US stock markets closed almost on a flat note, ahead of the employment number that will be released this week. Back home, barring Teck index which lost 0.05%, all the other indices were in the positive territory, with FMCG, Auto and Consumer Durables indices being major gainers. In scrip specific development, Delta Corp has gained after the company reported a consolidated net profit at Rs 20 crore for the quarter ended June 30, 2016 as compared to a net loss of Rs 1 crore in the year ago quarter. On the other hand, InterGlobe Aviation (IndiGo) has dipped after the company reported 7.3% year on year (YoY) decline in net profit of Rs 592 crore for the quarter ended June 30, 2016 due to higher non-fuel expenses. 

The market breadth remained optimistic as there were 1258 shares on the gaining side against 1078 shares on the losing side, while 135 shares remained unchanged.

The BSE Sensex is currently trading at 28122.25, up by 119.13 points or 0.43% after trading in a range of 28000.94 and 28175.22. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index up by 0.34%.

The top gaining sectoral indices on the BSE were FMCG up by 1.99%, Auto up by 0.75%, Consumer Durables up by 0.63%, PSU up by 0.54% and Capital Goods up by 0.50%, while TECK down by 0.05% was the only losing index on BSE.

The top gainers on the Sensex were ITC up by 3.25%, Maruti Suzuki up by 2.32%, Hero MotoCorp up by 1.51%, Tata Steel up by 1.18% and Hindustan Unilever up by 1.03%. On the flip side, Wipro down by 1.68%, HDFC down by 1.26%, ICICI Bank down by 0.96%, Bharti Airtel down by 0.74% and Lupin down by 0.72% were the top losers.

Meanwhile, the government has sought Parliament's approval for additional spending of Rs 1.03 lakh crore in the current fiscal. The first supplementary demand for grants presented by Finance Minister Arun Jaitley, proposing spending with net cash outgo of only Rs 20,948 crore, of which Rs 5,000 crore is for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

The Demands for Grants include 51 grants and one appropriation.  Arun Jaitley sought approval for transfer of Rs 5,000 crore towards National Employment Guarantee Fund and Rs 1,000 crore for providing funds to Indian Strategic Petroleum Reserves for Sovereign Strategic Crude Oil Reserve at Vizag, Mangalore and Pudur. The Demands for Grants also include Rs 40,000 crore as Ways and Means Advance to Food Corporation of India (FCI) to meet the working capital requirements towards procurement of food grain for targeted public distribution system.

Jaitley also sought approval for additional assistance of Rs 2,000 crore to states affected by natural calamities like hailstorm and non-seasonal rain under National Disaster Response Fund (NDRF). Among other sectors, the government sought Parliament's approval for providing Rs 31,957 crore to the Ministry of Road Transport and Highways under various heads.

Finance Ministry sought approval of Parliament to authorise gross additional expenditure of Rs 1,03,013.74 crore, of this, the proposals involving net cash outgo aggregates to Rs 20,948.26 crore and gross additional expenditure. This is in addition to the total expenditure of Rs 19.78 lakh crore, consisting of Rs 5.50 lakh crore under Plan and Rs 14.28 lakh crore under Non-Plan, projected in the Union Budget 2016-17.

The CNX Nifty is currently trading at 8669.00, up by 32.45 points or 0.38% after trading in a range of 8635.30 and 8687.20. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were ITC up by 3.57%, Maruti Suzuki up by 2.42%, HCL Tech up by 1.74%, Hero MotoCorp up by 1.62% and Yes Bank up by 1.60%. On the flip side, Ultratech Cement down by 1.62%, Wipro down by 1.43%, HDFC down by 1.29%, Ambuja Cement down by 1.25% and Aurobindo Pharma down by 1.06% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 was down by 1.31%, Taiwan Weighted slipped 0.13%, KOSPI Index declined 0.43% and FTSE Bursa Malaysia KLCI was down by 0.34%. On the other hand, Shanghai Composite rose 0.04% and Jakarta Composite was up by 0.34%.

Trading in Hong Kong stocks was delayed as the city braced for Typhoon Nida, shutting down most of the financial hub.