Benchmarks continue firm trade; Nifty holds 9,900 mark

Indian equity benchmarks continued their firm trade in morning session, on account of buying in frontline blue chip counters. The rupee opened higher against dollar on account of selling of American currency by banks and exporters amid sustained inflows by foreign institutional investors. Foreign investors have poured nearly Rs 11,000 crore in the capital markets in the first two weeks of July, supported by the trouble-free rollout of GST and stimulating Indian economy. The latest inflow comes following a net infusion of over Rs 1.62 lakh crore in the previous five months (February-June) on several factors. Traders were taking support from the latest edition of the OECD’s economic outlook report on India, which said that economic growth is projected to remain strong and India will remain the fastest growing G20 economy. It said that the acceleration of structural reforms in the Indian economy, with the efforts made by Prime Minister Narendra Modi led BJP government in the centre, is bringing a new growth impetus, which has won the confidence of the people by increasing public wages and pensions that will support consumption. Separately, India’s trade deficit narrowed in June after swelling to a 30-month high in May even as exports grew slowly in the month. Exports grew 4.39%, a four-month low in the 10-months of continuous growth, to $23.5 billion. Trade deficit was $8.1 billion in the year ago period and $13.84 billion in May.

Investors will be eyeing the Monsoon Session of Parliament beginning today as it is set to be dominated by issues such as cow vigilantism, farmers’ protests, Kashmir unrest, action of law enforcement agencies against some opposition leaders over alleged corruption, and India’s stand-off with China. Investors will also be eyeing quarterly results. The day will see 17 BSE listed companies to report June quarter results. Among them would be cement maker ACC and the master franchise for Domino’s Pizza and Dunkin Donuts in India, Jubilant FooodWorks. Prakash Industries, AGN Industries, Cochin Minerals and Sharda Motor Industries would also report earnings later in the day.

Traders were seen piling up position in IT, TECK and Metal stocks, while selling was witnessed in FMCG and Realty sector stocks. In scrip specific development, GMR Infrastructure was trading in green on report that it is in advanced talks with sovereign wealth fund Abu Dhabi Investment Authority (ADIA) to sell a stake of up to 49% stake in Hyderabad International Airport. The Bengaluru-based infrastructure developer is looking to sell non-core assets to lighten its debt burden. If the transaction goes ahead, the airport entity will be valued at Rs 5,000 crore. PSU Banking stocks were buzzing on reports that the government is working on a consolidation agenda with a view to creating 3-4 global-sized banks and reduce the number of state-owned lenders to about 12, an official said. The 21 public sector banks would get consolidated to 10- 12 in the medium term.

On the global front, Asian shares were trading mostly in green. China’s economy grew faster than expected in the second quarter as industrial output and consumption picked up and investment remained strong, though analysts expect slower growth over the rest of the year as policymakers seek to reduce financial risk. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,100 and 9,900 levels respectively. The market breadth on BSE was positive in the ratio of 1209:959, while 126 scrips remained unchanged.

The BSE Sensex is currently trading at 32119.87, up by 99.12 points or 0.31% after trading in a range of 32053.98 and 32128.36. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.03%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were IT up by 1.31%, TECK up by 1.06%, Metal up by 0.79%, Basic Materials up by 0.77% and Utilities up by 0.60%, while FMCG down by 1.25% and Realty down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.66%, Adani Ports & Special Economic Zone up by 1.70%, Infosys up by 1.63%, Mahindra & Mahindra up by 1.52% and Reliance Industries up by 1.45%.

On the flip side, ITC down by 2.40%, Coal India down by 0.48%, Axis Bank down by 0.41%, Hindustan Unilever down by 0.24% and Maruti Suzuki down by 0.16% were the top losers.

Meanwhile, the Federation of Indian Export Organisations (FIEO) has raised concern over implication of the Goods and Services Tax (GST), and said that it will severely dent the liquidity situation of traders and the compliance cost of merchant exporters may go up.

The top exporter body further added that export competitiveness of India may tank by about 2 per cent and this will be a big blow to exporters. It pointed that before GST, exporters used to get ab-initio exemptions from duties. But they have to pay first and then seek refund and due to this process, about Rs 1,85,000 crore will get stuck with the government.

FIEO President Ganesh Kumar Gupta termed GST as a “path breaking” reform, but it will bear fruits in the long run with initial hiccups. He said that that the liquidity problem of the exporters, delays in initial returns for exports in July and August, procedural issues in bonds are being flagged by FIEO with the officials concerned.

FIEO had already asked the government to provide interest on delay in payment of refund of taxes/duties after 10 days of exporters filing claim under the GST regime. As per the refund rules, the interest on delayed payment would be due only after 60 days.

The CNX Nifty is currently trading at 9917.40, up by 31.05 points or 0.31% after trading in a range of 9894.70 and 9920.30. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Wipro up by 3.41%, Vedanta up by 1.89%, Mahindra & Mahindra up by 1.70%, Infosys up by 1.67% and Adani Ports & Special Economic Zone up by 1.56%.

On the flip side, ITC down by 2.36%, GAIL India down by 0.97%, Aurobindo Pharma down by 0.87%, Indian Oil Corporation down by 0.80% and Coal India down by 0.46% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.22 points or 0.01% to 1,755.22, Taiwan Weighted increased 1.34 points or 0.01% to 10,445.25, Jakarta Composite increased 1.55 points or 0.03% to 5,833.34, KOSPI Index increased 9.07 points or 0.38% to 2,423.70 and Hang Seng increased 132.43 points or 0.5% to 26,521.66.

On the other hand, Shanghai Composite decreased 14 points or 0.43% to 3,208.42.

Tokyo Stock Exchange was closed on account of National holiday.