Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued their firm trade in the late morning session on account of buying in frontline blue chip counters. The sentiments were on optimistic note with FICCI survey that India’s economy is likely to expand 7.8% during the current financial year on the back of good monsoons. The estimated median GVA (gross value added) growth for Q1 FY17 has been put at 7.6%. Meanwhile, with inflation likely to moderate following a good monsoon, Finance Minister Arun Jaitley stated that it is logical to hope for a rate cut by Reserve Bank of India (RBI) though the actual decision will have to be taken by the central bank. Buoyed by the monsoon progress, the minister exuded confidence that India can achieve a 9-10 percent growth rate with a supportive global economic environment. Inviting foreign investment, Jaitley added that new legislations such as Goods and Services Tax (GST) along with structural reforms in the last two years will boost growth and the overall development of the country. Minor selling crept in after the rupee weakened against the dollar in early trade at the Interbank Foreign Exchange market on month-end demand for the American currency from importers. The dollar’s strength against some other currencies overseas also weighed on the rupee but a strong domestic equity market capped the losses. Traders were seen piling position in Auto, Bankex and Consumer Durables stocks while selling was witnessed in Metal, IT and TECK sector stocks. In scrip specific development, RBL Bank was trading in green after making a firm debut on the exchanges over its issue price of Rs 225. The first private lender IPO in a decade was opened for subscription from August 19 to 23, 2016.

On the global front, Asian stocks were trading mixed, with investors looking ahead to China PMI data this week and taking note of regional data in Japan. Growth in Japan’s industrial output ground to a halt in July after June’s gains, underscoring the fragility of factory activity and the continuing challenge to policymakers grappling with a stalling economy. Malaysia stock exchange was closed on account of ‘National Day’ holiday. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,750 and 28,400 levels respectively. The market breadth on BSE was positive in the ratio of 1245:817, while 129 scrips remained unchanged.

The BSE Sensex is currently trading at 28426.28, up by 83.27 points or 0.29% after trading in a range of 28363.10 and 28490.21. 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 0.43%, while Small cap index was up by 0.39%.

The top gaining sectoral indices on the BSE were Auto up by 1.13%, Bankex up by 0.74%, Consumer Durables up by 0.51%, Capital Goods up by 0.28% and Realty up by 0.19%, while Metal down by 0.33%, IT down by 0.17%, TECK down by 0.08%, Oil & Gas down by 0.07% and PSU down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.10%, Hero MotoCorp up by 2.03%, Asian Paints up by 0.99%, Bajaj Auto up by 0.86% and Lupin up by 0.75%.

On the flip side, ONGC down by 1.12%, NTPC down by 1.02%, Coal India down by 0.85%, TCS down by 0.83% and Hindustan Unilever down by 0.59% were the top losers.

Meanwhile, trade unions rejecting the government announcement of 42 percent minimum wage hike and a two-year bonus for unskilled non-farm workers of the central government to Rs 350 a day, from the current Rs 246, have said that they would go ahead with nation-wide strike on September 2, terming these announcements as “completely inadequate”.

Finance Minister Arun Jaitley in the wake of mass strike call has announced a hike in the minimum wage for unskilled non-agricultural workers in central public sector units for Rs. 350 a day. Calculated monthly, the minimum wage for unskilled worker comes out to be near Rs. 9,100 per month, but is way below the unions' demand of Rs 18,000 a month. The unions had demanded Rs 15,000 as minimum monthly income for daily wagers but the demand was revised after the government accepted the recommendations of the 7th Pay Commission.

The trade unions, demanding minimum monthly wage of Rs 18,000 per month or Rs 692 a day and base pension of Rs 3,000 a month, were not impressed by the government's move and said they would go ahead with the day-long general strike and demanded that they should enact a law to fix minimum (universal) wage. Meanwhile, the Labour Minister Bandaru Dattatreya has said that an amendment in the Minimum Wage Act is required for fixing a universal minimum wage and an initiative has been taken in this direction. The strike call is being supported by almost all major labour unions except RSS-affiliated BMS, and may impact all major services including banking, insurance services, power supplies and coal mining.

The CNX Nifty is currently trading at 8782.40, up by 38.05 points or 0.44% after trading in a range of 8754.05 and 8801.50. There were 32 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.16%, Ultratech Cement up by 3.14%, Tata Motors - DVR up by 2.53%, Kotak Mahindra Bank up by 2.04% and Indusind Bank up by 1.98%.

On the flip side, BPCL down by 1.35%, ONGC down by 1.12%, NTPC down by 0.99%, Bosch down by 0.93% and Coal India down by 0.73% were the top losers.

The Asian markets were trading mixed; Jakarta Composite increased 8.31 points or 0.15% to 5,370.63, Shanghai Composite increased 10.49 points or 0.34% to 3,085.17 and Nikkei 225 increased 163.16 points or 0.98% to 16,888.52.

On the other hand, Taiwan Weighted decreased 38.92 points or 0.43% to 9,071.64, KOSPI Index decreased 11.03 points or 0.54% to 2,028.71 and Hang Seng decreased 0.67 points or 0% to 23,015.44.