Markets erase losses to trade in green; Auto stocks shine

In a volatile trade, Indian equity benchmarks erased their earlier losses in early afternoon session and entered into positive territory, on the back of buying witnessed in Auto, Metal and Oil & Gas stocks. Sentiments got some comfort with global rating agency Moody’s latest report that India's GDP growth will remain in the range of 6.5-7.5 percent over the next 12-18 months and GST will support the momentum for faster growth. Moreover, a firm trend in the rest of Asia following a record close on Wall Street, also supported the sentiments. However, further gains were muted as investors remained cautious ahead of the Reserve Bank of India (RBI)'s policy meeting that started today. Meanwhile, the rupee firmed up by 11 paise to 64.08 against the US dollar as exporters and banks intensified selling of the American currency. In scrip specific development, Maruti Suzuki India, leader in passenger vehicles, was up by over two percent after reporting a jump of 20.6% in total sales at 1,65,346 units in July 2017.

On the global front, Asian markets were trading mostly in green, as higher commodity prices, upbeat corporate earnings results from Japanese companies and better-than-expected China Caixin manufacturing PMI data boosted investor sentiment. The latest survey from Caixin revealed that the manufacturing sector in China picked up steam in July, with a Manufacturing PMI score of 51.1. That beat forecasts for 50.4, which would have been unchanged from the previous month.

The BSE Sensex is currently trading at 32532.73, up by 17.79 points or 0.05% after trading in a range of 32462.25 and 32615.45. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.55%, while Small cap index was up by 0.02%.

The top gaining sectoral indices on the BSE were Auto up by 1.40%, Metal up by 0.84%, Consumer Disc up by 0.74%, Oil & Gas up by 0.69% and Healthcare up by 0.62%, while Capital Goods down by 0.86%, Consumer Durables down by 0.38%, Telecom down by 0.23%, Power down by 0.16% and Utilities down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 2.49%, Maruti Suzuki up by 2.24%, Mahindra & Mahindra up by 1.81%, Wipro up by 1.59% and Hindustan Unilever up by 1.47%. On the flip side, HDFC down by 1.34%, Larsen & Toubro down by 1.27%, ONGC down by 1.15%, Asian Paints down by 1.12% and Infosys down by 0.88% were the top losers.

Meanwhile, after hitting a 7-month high in the month of May, the share of foreign portfolio investments (FPI) through participatory notes (P-notes) has decreased to Rs 1.65 lakh crore at the end of June, due to strict norms enforced by SEBI to tackle inflow of illicit funds. According to Securities and Exchange Board of India (SEBI) data, total value of P-Notes investments in Indian markets including equity, debt and derivatives, at June-end declined to Rs 165,241 crore, from Rs 180,718 crore at the end of May.

Of the total, P-note holdings in equities at June-end were at Rs 107,113 crore, while in debts and derivatives were at Rs 25,672 crore and Rs 32,456 crore respectively. The quantum of FPI investments via P-Notes decreased to 5.7 percent in June, from 6.3 percent in the preceding month. P-notes are issued by registered Foreign Portfolio Investors to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. They however need to go through a proper due diligence process.

The SEBI had put in place restrictions on foreign portfolio investors from issuing participatory notes where the underlying asset is a derivative, as the markets regulator continues to make norms stricter for such instruments. Now, participatory notes or Offshore Derivative Instruments (ODIs) where the derivative is underlying can be issued only for the purpose of hedging with respect to the equity shares held.

The CNX Nifty is currently trading at 10089.05, up by 11.95 points or 0.12% after trading in a range of 10065.75 and 10101.90. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 4.73%, Dr. Reddy’s Lab up by 2.76%, Aurobindo Pharma up by 2.76%, Indiabulls Housing Finance up by 2.72% and BPCL up by 2.71%. On the flip side, HDFC down by 1.54%, Larsen & Toubro down by 1.50%, HCL Tech. down by 1.44%, Bank of Baroda down by 1.42% and Asian Paints down by 1.35% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite surged 5.46 points or 0.17% to 3,278.48, FTSE Bursa Malaysia KLCI rose 8.3 points or 0.47% to 1,768.33, Taiwan Weighted added 9.96 points or 0.1% to 10,437.29, KOSPI Index was up by 20.25 points or 0.84% to 2,422.96, Nikkei 225 increased 60.61 points or 0.3% to 19,985.79 and Hang Seng inched up 190.39 points or 0.7% to 27,514.38.

On the flip side, Jakarta Composite was down by 16.47 points or 0.28% to 5,824.47.