Benchmarks continue firm trade; Nifty shy of 10,100 mark

Indian equity benchmarks continued their firm trade in the morning session on strong political stability cues from the developments in Bihar. Bharatiya Janata Party (BJP) strengthened its foothold in Bihar after Nitish Kumar ended his party, JDU’s mahagathbandhan or Grand Alliance with Lalu Yadav’s RJD and the Congress last evening and joined hands with his former partner BJP.  The continuing record breaking rally was also on account of optimistic sentiment of investors ahead of the corporate earnings, which drove the markets to further peaks and spread of positive cues after the US Federal Reserve kept the benchmark lending rates unchanged. The rupee surged against the US currency in early trade at the Interbank Foreign Exchange as the dollar weakened globally after the US Federal Reserve kept policy rates unchanged. Increased selling of the American currency by exporters and banks amid a higher opening in the domestic equity market lifted the domestic currency. Sentiments remained up-beat on news that retirement fund body the Employees’ Provident Fund Organization plans to pump in Rs 22,500 crore in exchange traded funds in 2017-18 following the go-ahead from the central board of trustees of EPFO to increase the equity investment from 10% to 15%. The EPFO has invested Rs 6,577 crore in ETFs in 2015-16 and Rs 14,984 crore in 2016-17. The banking sector stocks was buzzing as the government said that a combined 5,076 cases of active banking frauds involving Rs 1 lakh or more causing losses of Rs 16,78,853 lakh were reported by 76 banks during 2016-17.

Traders were seen piling up position in Realty, Bankex and Utilities stocks, while selling was witnessed in Telecom and Consumer Durables sector stocks.  In scrip specific development, Pidilite Industries was trading under pressure after the net profit of the company declined 16.77 percent to Rs 226.51 crore in the quarter ended June 2017 as against Rs 272.15 crore during the previous quarter ended June 2016. Sales declined 2.58 percent to Rs 1528.92 crore in the quarter ended June 2017 as against Rs 1569.37 crore during the previous quarter ended June 2016. The market may remain volatile today 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 today i.e. July 27, 2017.

On the global front, Asian markets were trading mostly in green, with Japan’s benchmark Nikkei 225 index reversed earlier losses and trading in green. Earnings for China’s industrial firms surged 19.1 percent in June from a year earlier, accelerating from May in a sign economic momentum remains solid even as rising borrowing costs have raised concerns about pressure on margins. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,600 and 10,050 levels respectively. The market breadth on BSE was positive in the ratio of 1188:968, while 141 scrips remained unchanged.

The BSE Sensex is currently trading at 32630.42, up by 247.96 points or 0.77% after trading in a range of 32492.01 and 32631.36. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.59%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Realty up by 1.27%, Bankex up by 0.94%, Utilities up by 0.65%, Auto up by 0.64% and IT up by 0.61%, while Telecom down by 0.61% and Consumer Durables down by 0.06% were the only losing indices on BSE.

The top gainers on the Sensex were HDFC up by 3.96%, HDFC Bank up by 1.04%, Maruti Suzuki up by 1.03%, Hindustan Unilever up by 0.92% and ICICI Bank up by 0.90%.

On the flip side, Bharti Airtel down by 1.52%, Cipla down by 0.66%, Sun Pharma down by 0.46%, NTPC down by 0.27% and Tata Steel down by 0.16% were the top losers.

Meanwhile, the government defending the ongoing consolidation among telecom operators has said that it will result in efficient use of spectrum for better services, and six players in each service area will have adequate competition. Communications Minister Manoj Sinha has said that “After the reported consolidation among the various Indian Telecom Service Providers, there will be enough competition in the sector as six players are expected to remain in each service area in the access services segment.”

Sinha further added that Mergers and Acquisitions (M&As) among operators do not cause fragmentation of spectrum but rather its consolidation for providing better services by efficient utilisation of the radiowaves.

The entry of Reliance Jio Infocomm led to market faster than expected consolidation with merger proposal of Telenor India and Bharti Airtel, acquisition of telecom business of Sistema Shyam Tele Services by Reliance Communications and the planned merger of two of the biggest telecom companies Vodafone India and Idea Cellular.

The CNX Nifty is currently trading at 10097.15, up by 76.50 points or 0.76% after trading in a range of 10054.95 and 10099.10. There were 42 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were HDFC up by 3.97%, Yes Bank up by 3.62%, HCL Tech up by 2.50%, Eicher Motors up by 1.92% and GAIL India up by 1.65%.

On the flip side, Bharti Airtel down by 1.52%, Tech Mahindra down by 1.18%, Cipla down by 0.75%, Sun Pharma down by 0.62% and NTPC down by 0.33% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 4.59 points or 0.26% to 1,770.59, KOSPI Index increased 5.72 points or 0.23% to 2,440.23, Jakarta Composite increased 19.95 points or 0.34% to 5,820.16, Taiwan Weighted increased 92.7 points or 0.89% to 10,511.81, Nikkei 225 increased 98.62 points or 0.49% to 20,148.78 and Hang Seng increased 142.81 points or 0.53% to 27,083.83.

On the other hand, Shanghai Composite decreased 10.32 points or 0.32% to 3,237.36.