Sensex, Nifty trade flat with positive bias

Indian equity benchmarks were trading flat, as investors booked profits in lenders amid caution ahead of Reserve Bank of India’s policy outcome tomorrow. Though, markets managed to trade in green taking support with Moody's report that the Indian economy will likely grow in the range of 6.5-7.5% over the next 12-18 months and the growth momentum will get support from the goods and services tax (GST) regime. However, gains remained capped as some cautiousness crept in as Indian factory activity plunged in July to its lowest since Feb. 2009, after Prime Minister Narendra Modi's new tax policy severely hurt output and demand. The growth in eight core sectors slowed to 0.4 percent in June 2017 as compared to 3.6 percent in May and 6.92 percent in the corresponding month last year, on the back of sharp decline in output of coal, refinery products, fertiliser and cement, too weighted on the sentiments. Sentiments also remained dampened with IMF's latest report that India needs to remain vigilant as greater reliance on debt financing and portfolio inflows could create significant external financing vulnerabilities.

On the global front, European markets were trading in green, as investors monitored earnings reports and reacted to further political uncertainty at the White House. Asian markets were trading in green. Back home, in scrip specific development, Atul Auto edged higher after the company reported sale of 3,402 units, a growth of 6.98% for the month of July 2017 as compared to 3,180 units sold in July 2016. The company’s total sales for April - July 2017 stood at 12,376 units, up by 14.74% as compared to 10,786 units in the same period last year.

The BSE Sensex is currently trading at 32529.78, up by 14.84 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 mixed; the BSE Mid cap index was up by 0.35%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Auto up by 1.40%, Metal up by 0.92%, Consumer Disc up by 0.70%, Oil & Gas up by 0.40% and Healthcare up by 0.38%, while Capital Goods down by 0.56%, Consumer Durables down by 0.38%, Power down by 0.26%, Telecom down by 0.19% and Bankex down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.21%, Dr. Reddy’s Lab up by 2.07%, Adani Ports & SEZ up by 1.78%, Wipro up by 1.57% and Hindustan Unilever up by 1.53%. On the flip side, SBI down by 1.22%, ONGC down by 1.18%, Asian Paints down by 1.13%, Infosys down by 0.81% and Lupin down by 0.72% were the top losers.

Meanwhile, in a clear indication that the introduction of the goods and services tax (GST) weighed heavily on the manufacturing sector, the manufacturing production in India contracted for the first time this year in the month of July since the downturn recorded in December last year post demonetization. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance- fell to 47.9 in July from June's 50.9. A below 50 figure reported for the month was at its lowest mark since February 2009, highlighting the first deterioration in business conditions in 2017 so far.

As per survey, along with sluggish manufacturing activity, the contractions were also reported in demand, employment and purchasing activity. The report further noted that the intermediate goods producers got affected the worst, while new export orders continued to rise in July. Besides, it said that lower sales triggered an overall accumulation in stocks of finished goods.

On the inflation front, the survey said that higher tax rates sparked greater cost burdens in July. However, the pace at which input costs rose was moderate and much weaker than its long-run average. It also mentioned that some companies lowered their selling prices in order to win new business amid competitive environment. Further, the 12-month outlook for output remained positive in July, with companies expecting more clarity regarding the GST to support growth.

The CNX Nifty is currently trading at 10092.85, up by 15.75 points or 0.16% after trading in a range of 10065.75 and 10101.90. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 4.59%, Eicher Motors up by 4.18%, Indiabulls Housing Finance up by 3.19%, Hindalco up by 2.73% and Aurobindo Pharma up by 2.69%. On the flip side, Bank of Baroda down by 1.69%, Asian Paints down by 1.43%, SBI down by 1.20%, ONGC down by 1.15% and HCL Technology down by 1.15% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 6.94 points or 0.39% to 1,766.97, Taiwan Weighted increased 9.96 points or 0.1% to 10,437.29, Shanghai Composite increased 19.61 points or 0.6% to 3,292.64, KOSPI Index increased 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 increased 216.24 points or 0.79% to 27,540.23. On the flip side, Jakarta Composite decreased 30.18 points or 0.52% to 5,810.75.

All European markets were trading in green; France’s CAC increased 21.55 points or 0.42% to 5,115.32, Germany’s DAX increased 44.87 points or 0.37% to 12,163.12 and UK’s FTSE 100 increased 54.89 points or 0.74% to 7,426.89.