Bourses struggle near the neutral line pressured by IT stocks

Indian markets are not showing much movement, trading in a narrow band and moving near the neutral line. Any modest attempts were being sold to profit taking and the major bourses were finding it difficult to come out of red. There are no major supportive cues for the markets and the weakness in other regional markets too was weighing down the sentiments. Traders amid the concerns of probable rate hike by US Fed were unable to get any support with the buzz that the Constitution amendment bill to roll out goods and services tax (GST) is expected to receive nod by about 50 percent of states by early September, in order to roll out GST by April 2017. Meanwhile, the rupee weakness too was dampening the mood of the markets, the domestic currency weakened to a one-week low against the US dollar, tracking the losses in its Asian peers on raised possibility of a September rate hike.

On the sectoral front, auto, metal, industrial and energy sector stocks were trying to hold the markets from falling, while selling in IT, tech, FMCG and realty were restricting any up move. In scrip specific action, Shree Renuka Sugars was maintaining its gains over 5%, on report that Judicial Protection Law has approved a rejig plan presented by the company's Brazilian arm. The management has said that the banks were ready to take 70 percent haircut and exit with 30 percent of the face value of the debt.

The BSE Sensex is currently trading at 27789.42, up by 7.17 points or 0.03% after trading in a range of 27698.71 and 27827.26. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.13%, while Small cap index was higher by 0.15%.

The top gaining sectoral indices on the BSE were Auto up by 1.13%, Capital Goods up by 0.62%, Metal up by 0.58%, Consumer Durables up by 0.39% and Oil & Gas up by 0.29%, while IT down by 1.03%, Realty down by 0.77%, TECK down by 0.71%, Power down by 0.39% and FMCG down by 0.33% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 4.33%, Reliance Industries up by 1.37%, Hero MotoCorp up by 1.36%, Larsen & Toubro up by 0.95% and Bharti Airtel up by 0.77%. On the flip side, TCS down by 1.67%, Wipro down by 1.56%, Adani Ports &Special down by 1.38%, Power Grid Corpn. down by 1.30% and HDFC Bank down by 1.24% were the top losers.

Meanwhile, Commerce and Industry Minister Nirmala Sitharaman has pitched for as much as 200 basis points interest rate cut by Reserve Bank of India (RBI) to boost Small and Medium Enterprises (SMEs) and create jobs. Sitharaman who also heads the SME Ministry said that “I still hold that the cost of credit in India is high. Undoubtedly, particularly MSMEs which create a lot of jobs contribute to exports… are all hard pressed for money and for them, approaching a bank is no solution because of the prevailing rate of interest. I have no hesitation to say, yes 200 bps (2%), I would strongly recommend.”

The minister said that SMEs access to credit is based on real environment in which they are doing business, world over interest rate is low equally, income generation/ jobs are important and also added that for long periods, if rates would remain high SMEs would not be able to afford the borrowing. Undoubtedly, particularly SMEs which create a lot of jobs contribute to exports are all hard pressed for money and for them, approaching a bank is no solution because of the prevailing rate of interest.

She said that for long periods, if rates would remain high SMEs would not be able to afford the borrowing. The minister also said she will take up the matter with the Finance Minister about directing banks to pass on benefits of the rate cuts to the industry.

The CNX Nifty is currently trading at 8572.30, down by 0.25 points after trading in a range of 8543.75 and 8583.75. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 4.32%, Tata Motors - DVR up by 2.31%, Hero MotoCorp up by 1.97%, Zee Entertainment up by 1.56% and Reliance Industries up by 1.33%. On the flip side, HCL Tech. down by 2.16%, TCS down by 1.73%, Wipro down by 1.59%, Tech Mahindra down by 1.52% and Asian Paints down by 1.27% were the top losers.

Most of the Asian markets barring Nikkei 225, which was up by 376.78 points or 2.3% to 16,737.49 were trading in red.
Hang Seng was down by 76.88 points or 0.34% to 22,832.66, Jakarta Composite was lower by 66 points or 1.21% to 5,372.83, Taiwan Weighted declined by 21.55 points or 0.24% to 9,110.17, KOSPI Index was down by 7.34 points or 0.36% to 2,030.16, Shanghai Composite decreased by 3.34 points or 0.11% to 3,066.96 and FTSE Bursa Malaysia KLCI was down by 3.06 points or 0.18% to 1,680.03