Benchmarks continue to hold their head above water

Indian benchmark indices continued to trade in green in the noon session on continuous buying activities by both funds and retail investors. Holding slender gains, both Sensex and Nifty were trading little short of the crucial 28,100 and 8,650 levels respectively. Sentiments remained up-beat with the private report that the strong consumption and public investments have kept India's growth recovery on track this year. According to the report, the present recovery is not accompanied by current account and fiscal excesses or strong core inflationary impulses, unlike previous instances of high growth. Some support also came with raising expectation that food inflation is poised to moderate significantly when data for August is released next month as the wholesale price of pulses has eased 30%, while vegetable rates have dropped as much as 50% in some markets in the past four weeks because normal monsoon rainfall has raised prospects of a bumper harvest after two years of drought.  Prices of all farm commodities are likely to fall noticeably by October, when the new harvest reaches the market and the festive demand has been met.
Furthermore, the tax department is hopeful of meeting the revenue collection target for FY 2016-17. Indirect tax collection rose by about 30.8 per cent during April-June to Rs 199,970 crore, from Rs 1,52,740 crore collected in the year-ago period. However, gains remained capped with hawkish comments from Federal Reserve officials against sharp gains for oil futures, a weakening dollar and fresh consumer-price data that showed US inflation remains tepid. Also, US Federal Reserve Bank president said the Fed could raise interest rates as soon as September, prompting investors to reduce their exposure to risky assets. Market participants have also turned cautious ahead of an annual meeting of central bankers from around the world in Jackson Hole, Wyoming, next week. However, Asian stock markets were trading mixed, despite China signaling its intent to further open up its equity markets to foreigners.

Back home, stocks from Metal, PSU and Auto counters were supporting the markets’ uptrend, while those from information technology (IT), Capital Goods and Power counters were adding to the underlying cautious undertone. In scrip specific development, OCL India has rallied after net profit of the company in June 2016 (Q1FY17) nearly doubled at Rs 105 crore, on the back of strong operational performance. Moreover, Sundram Fasteners has moved higher to its record high on Wednesday, extending its past five days rally, after reported a robust set of numbers for the quarter ended June 30, 2016.

The market breadth remained optimistic as there were 1366 shares on the gaining side against 938 shares on the losing side, while 158 shares remained unchanged.

The BSE Sensex is currently trading at 28107.31, up by 42.70 points or 0.15% after trading in a range of 28024.36 and 28136.10. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.54%, while Small cap index up by 0.74%.

The top gaining sectoral indices on the BSE were Metal up by 1.65%, PSU up by 0.95%, Auto up by 0.92%, Realty up by 0.81% and Bankex up by 0.32%,  while IT down by 0.86%, TECK down by 0.60%, Capital Goods down by 0.10% and Power down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.84%, Coal India up by 2.23%, Tata Steel up by 2.23%, Bajaj Auto up by 2.01% and Axis Bank up by 1.83%. On the flip side, TCS down by 1.54%, Infosys down by 1.09%, Asian Paints down by 1.00%, GAIL India down by 0.90% and Larsen & Toubro down by 0.59% were the top losers.

Meanwhile, in order to promote less cash economy and curb the circulation of black money, the government has decided to bear the transaction cost for all payments made to it through debit or credit cards and net banking. At present times, the cost of transaction, which is commonly known as the Merchant Discount Rate (MDR), has to be borne by the customers when a payment is made to the government.

The Finance Ministry has issued the circular in pursuance of the decision of the government to promote credit/digital transactions in government payments and collections. The government has also said that the methodology for reimbursement of such payment to intermediaries on transactions involving debt/credit cards or digital means is being worked out and the detailed guidelines and operational modalities would be issued in due course.

The circular said that government departments shall take appropriate steps to bear MDR (Merchant Discount Rate) cost like other merchants so the public shall not bear any MDR cost for making payment to the government through debit cards or credit cards or digital means. In 2012, the Reserve Bank of India had capped the MDR for debit card transaction at 0.75% for transaction values up to Rs 2,000 and at 1% for transaction values above Rs 2,000. However, there is no RBI cap on MDR on credit card payments.

The government had earlier set up a task force under the Department of Investment and Public Asset Management Secretary Neeraj Gupta. The Task Force on promotion of payments through cards and digital means has flagged issues with respective government departments.

The CNX Nifty is currently trading at 8650.65, up by 8.10 points or 0.09% after trading in a range of 8626.55 and 8657.60. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 3.00%, Coal India up by 2.49%, Tata Steel up by 2.26%, Bajaj Auto up by 1.88% and Axis Bank up by 1.81%. On the flip side, TCS down by 1.52%, Ambuja Cement down by 1.34%, Ultratech Cement down by 1.34%, Infosys down by 1.14% and Asian Paints down by 1.03% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite rose 0.04%, Jakarta Composite gained 0.96%, Taiwan Weighted rose 0.16%, Hang Seng increased 0.24% and Nikkei 225 was up by 0.92%. On the flip side, KOSPI Index decreased 0.48% and FTSE Bursa Malaysia KLCI was down by 0.26%.