Indian benchmarks come off day’s high levels; hold on psychological levels

Indian stock markets are continuing their good work and are holding on to the psychological 8,650 and 28,100 levels. On Friday in the noon session, optimistic investors are showing hefty buying interests across the board. Sentiments remained up-beat after India Meteorological Department (IMD) stated that monsoon rains in India were 15 percent above average in the week ended August 10, 2016. The weather office has retained its forecast for an above-average monsoon this year, boosting hopes of a rise in farm output and income after two years of drought. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 608 crore on August 11, 2014.  However, investors remained cautious ahead of key economic data, industrial production (IIP) for June and consumer price index (CPI) for July, to be released after market closing today also added to the upbeat investor sentiment.

On the global front, Asia markets edged higher in early trade, tracking sharp gains in US stocks, which hit fresh record highs in overnight trades. Rising oil prices also lifted sentiment. Japanese shares gained the most on the back of a weaker yen and ahead of GDP data on Monday, while the Shanghai Composite rose after fixed asset investment, retail sales and industrial output all rose but were below expectations.

Back home, all BSE sectoral indices were trading in the green. Among them, Metal index gained the most by 1.67 per cent, followed by Auto up by 1.26 per cent, Capital Goods up by 1.18 per cent and FMCG up by 1.14 per cent. In scrip specific development, Rane Engine Valve has rallied after the company announced the sale of part of its land in Alandur, Chennai at a market value of Rs 94.82 crore. Further, Glenmark Pharmaceuticals jumped after the company reported 23.96% rise in its consolidated net profit at Rs 226.78 crore for the quarter ended June 30, 2016 as compared to Rs 182.95 crore for the same quarter in the previous year.

The market breadth remained optimistic as there were 1299 shares on the gaining side against 1008 shares on the losing side, while 149 shares remained unchanged.

The BSE Sensex is currently trading at 28133.51, up by 273.91 points or 0.98% after trading in a range of 27900.91 and 28150.76. 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 1.00%, while Small cap index up by 0.71%.

The top gaining sectoral indices on the BSE were Metal up by 1.67%, Auto up by 1.26%, Capital Goods up by 1.18%, FMCG up by 1.14% and Bankex up by 1.06%
The top gainers on the Sensex were Tata Motors up by 2.85%, Axis Bank up by 2.83%, Tata Steel up by 2.40%, Reliance Industries up by 2.09% and HDFC up by 1.80%. On the flip side, Adani Ports &Special down by 0.79%, Infosys down by 0.57%, Bharti Airtel down by 0.22%, Dr. Reddys Lab down by 0.18% and Cipla down by 0.18% were the top losers.

Meanwhile, a joint study of industry body Associated Chambers of Commerce and Industry of India (Assocham) and Crisil, titled 'For greater good', has said that there is a need to increase the asset allocation to equity allowed in retirement funds like Employees’ Provident Fund (EPF) from the current level of five per cent, as it will help in realising the country's huge demographic advantage.

The study stated that at five per cent, overall exposure to equity could barely reach five per cent in 20 years, and even if allocation was increased to 15 per cent, it may take three more years to cross the five per cent overall mark. It pointed that the global exposure level is much higher in OECD (Organisation for Economic Co-operation and Development) countries, like Canada and the United States, for instance, the average is near 30 per cent, it is imperative, therefore, to increase this exposure level.

It said the OECD countries, despite having an ageing economy, continue to remain strongly invested in long-term asset classes like equity and even the non-OECD countries are putting their demographic advantage to better use by investing in equities. In India, however, pension assets are predominantly invested in debt. This is despite the demographic advantage the country has and is expected to enjoy over a long term. The study further highlighted that as per a global analysis of investments, even the non-OECD countries are putting their demographic advantage to better use by investing in equities.

The CNX Nifty is currently trading at 8670.75, up by 78.60 points or 0.91% after trading in a range of 8604.45 and 8675.20. There were 41 stocks advancing against 9 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Hindalco up by 3.69%, Yes Bank up by 2.86%, Tata Motors up by 2.76%, Tata Steel up by 2.57% and Axis Bank up by 2.54%. On the flip side, Tech Mahindra down by 1.52%, Bosch down by 1.15%, BPCL down by 1.11%, Adani Ports &Special down by 0.81% and Idea Cellular down by 0.79% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.22%, Jakarta Composite gained 0.1%, Shanghai Composite rose 0.58%, Taiwan Weighted advanced 0.2%, Nikkei 225 added 1.05% and Hang Seng was up by 0.94%. On the flip side, KOSPI Index was down by 0.06%.