Benchmarks trade in green; Nifty tad shy of 10,000 mark

Indian equity benchmarks continued their firm trade in the morning session with Nifty tad close to the magical five-digit figure of 10,000 mark. The buying by retail investors coupled with sustained foreign fund inflows and better-than-expected earnings by some more companies influenced sentiments. The rupee opened lower against dollar on account of buying of American currency by banks and importers. With the FOMC rate outcome later in the day, currency traders preferred to stay on the sidelines and avoided taking any long positions. Foreign Portfolio Investors stood net sellers in domestic equity markets on Tuesday and sold shares worth Rs 270.33 crore with gross purchases and gross sales of Rs 4806.28 crore and Rs 5076.61 crore, respectively. The sentiments remained upbeat with report that the government approved an addition of 7.47 lakh new registration applications under the Goods and Services Tax (GST) regime. Power sector stocks were buzzing as the Ministry of Power has said that outstanding liabilities of power distribution companies to central public sector undertaking power producers have halved under the Ujwal Discom Assurance Yojana.

Investors took note of private brokerage firm report which highlighted that retail inflation in India is expected to rise noticeably from trough in June to 4.4 per cent in the second half of this year, driven mostly by food prices and the base effect. The report added that although inflation has bottomed, in the medium term it is expected to see a significant uptrend and rise above the RBI’s target. The market may remain volatile this week as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. July 2017 series to next month i.e. August 2017 series. The near month July 2017 derivatives contracts will expire on Thursday i.e. July 27, 2017.

Traders were seen piling up position in Metal, Realty and Utilities stocks, while selling was witnessed in Telecom, TECK and IT sector stocks.  In scrip specific development, Indraprastha Gas (IGL) was trading in green after the company hiked the selling prices of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in NCT of Delhi, Noida, Greater Noida and Ghaziabad. This step has been taken by the company in order to offset the overall impact on its costs after transition to GST regime. Prestige Estate Projects was trading in green on reports that the company is looking to raise funds by divesting stake across its business verticals, starting with the commercial and retail portfolios.

On the global front, Asian markets were trading mostly in red, as investors awaited the Federal Reserve’s policy decision later in the day for more clues on its tightening plans. China’s securities regulator said that it will regulate and expand access to capital markets for all types of investors, while also encouraging more long-term institutional participation. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,300 and 9,950 levels respectively. The market breadth on BSE was positive in the ratio of 1436:755, while 105 scrips remained unchanged.

The BSE Sensex is currently trading at 32319.22, up by 90.95 points or 0.28% after trading in a range of 32226.08 and 32320.01. 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 0.54%, while Small cap index was up by 0.80%.

The top gaining sectoral indices on the BSE were Metal up by 1.71%, Realty up by 1.55%, Utilities up by 1.19%, Energy up by 1.01% and Oil & Gas up by 0.86%, while Telecom down by 0.54%, TECK down by 0.36% and IT down by 0.16% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.03%, Mahindra & Mahindra up by 1.71%, Reliance Industries up by 1.56%, ICICI Bank up by 1.22% and Sun Pharma up by 0.83%.

On the flip side, Asian Paints down by 1.88%, Axis Bank down by 1.59%, TCS down by 0.67%, Bharti Airtel down by 0.58% and Dr. Reddy’s Lab down by 0.10% were the top losers.

Meanwhile, amid the intense tariff war following entry of Reliance Jio in the telecom sector, Finance Minister Arun Jaitley has flagged concern of high debt for the sector and said that banks as on whole have an exposure of Rs 97,681 crore in the telecom sector.

Further, the Finance Minister quoting the Reserve Bank of India figure said, total outstanding (funded) advances by public sector banks to the 'communications' sector stood at Rs 63,415 crore, while total exposure to the sector worked out to be Rs 97,681 crore. For public sector banks, the gross Non Performing Asset (NPA) ratio and stressed advances ratio for the sector stood at 3.68 per cent and 11.29 per cent respectively, at the end of 2016-17 fiscal.

Jaitley also cited SBI Chairman, who has pointed out that stress in the telecom sector has reached 'highly unsustainable levels' due to erosion of topline and earnings of the service providers. Though, he also said that SBI Chairman has made certain recommendations for tackling stress in the sector, including aligning deferred payment liabilities for spectrum for its life, rationalisation of regulatory charges, quick resolution of litigation on definition of adjusted gross revenues, easing regulation of merger and acquisition. The finance minister further added that the government has already constituted an Inter-Ministerial Group for the sector, which soon will be giving its report.

The CNX Nifty is currently trading at 9992.50, up by 27.95 points or 0.28% after trading in a range of 9965.95 and 9993.45. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.91%, Vedanta up by 2.81%, Tata Steel up by 2.08%, Eicher Motors up by 1.69% and Reliance Industries up by 1.64%.

On the flip side, Zee Entertainment down by 1.98%, Axis Bank down by 1.80%, Asian Paints down by 1.75%, Bharti Infratel down by 1.46% and ACC down by 1.14% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 41.13 points or 0.39% to 10,422.02, KOSPI Index decreased 8.14 points or 0.33% to 2,431.76, Shanghai Composite decreased 6.86 points or 0.21% to 3,236.83 and FTSE Bursa Malaysia KLCI decreased 0.42 points or 0.02% to 1,762.92.

On the other hand, Jakarta Composite increased 6.99 points or 0.12% to 5,820.52, Hang Seng increased 43.5 points or 0.16% to 26,895.55 and Nikkei 225 increased 90.56 points or 0.45% to 20,045.76.