Benchmarks add strength to trade in green

Indian equity benchmarks added strength and started trading above neutral line with modest gains in the morning session on account of buying in frontline blue chip counters. The rupee opened lower against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets on Monday and sold shares worth Rs 1,829.43 crore with gross purchases and gross sales of Rs 4,134.26 crore and Rs 5,963.69 crore, respectively. Traders took support with Prime Minister Narendra Modi’s statement that the abolition of inter-state check posts after the implementation of GST has reduced time for movement of goods by 30 percent and saved thousands of crore of rupees. Separately, a foreign brokerage report highlighted that India’s growth momentum will get stronger with revival in private investment cycle and real GDP growth is expected to average at about 7.4 percent over 2017 and 2018. It also termed as faulty the argument that a 7.5-8 percent real GDP growth in the next few years will still be lower than what was achieved in the boom period of 2006-2008. The medium-term outlook for the country looks exceedingly positive driven by supportive population dynamics, steadily rising aspirational middle class and a reforms oriented government.

Meanwhile, traders remained concerned as retail inflation increased to 2.36% in July from 1.46% in June, wholesale inflation rose to 1.88%, showing effects of implementation of GST and 7th Pay Commission. This effectively shoots down the probability of any near-term interest rate cut by the Reserve Bank of India (RBI). Investors took note that the slowdown in exports may mark the beginning of trouble ahead. On Monday, official data showed exports slowing to an eight-month low in July in the current 11-month cycle of growth of exports with shipments remaining stuck in factories in the first week of last month. The steepest decline was in traditional labour-intensive sectors such as gems and jewellery, readymade garments, pharmaceuticals and carpets, where the incidence of subcontracting is high.

Traders were seen piling up position in FMCG, Auto and Realty stocks, while selling was witnessed in Capital Goods, Bankex and Energy sector stocks. In scrip specific development, Coal India was trading in red on reporting 23% decline in consolidated profit at Rs 2,351.2 crore for the quarter ended June 30, 2017, due to higher expenses. The company had posted a consolidated profit of Rs 3,065.2 crore in the year-ago period.

On the global front, Asian markets were trading mostly in green, tracking a muted performance overnight on Wall Street. Gains earlier this week came from the unwinding of short positions as tensions surrounding the Korean Peninsula eased. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 31,400 and 9,800 levels respectively. The market breadth on BSE was positive in the ratio of 1315:734 while 96 scrips remained unchanged.

The BSE Sensex is currently trading at 31498.35, up by 49.32 points or 0.16% after trading in a range of 31399.35 and 31602.64. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.73%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were FMCG up by 1.72%, Auto up by 0.87%, Realty up by 0.65%, Consumer Disc up by 0.53% and Consumer Durables up by 0.51%, while Capital Goods down by 0.74%, Bankex down by 0.63%, Energy down by 0.33%, PSU down by 0.12% and Telecom down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.25%, Sun Pharma up by 2.22%, Hindustan Unilever up by 1.92%, Tata Motors up by 1.62% and HDFC up by 1.46%.

On the flip side, Larsen & Toubro down by 1.36%, Asian Paints down by 1.18%, ICICI Bank down by 1.18%, Reliance Industries down by 1.09% and ONGC down by 1.02% were the top losers.

Meanwhile, domestic crude steel production witnessed a 4.6 per cent increase at 8.45 million tonnes (MT) in July, as against the total output of 8.082 MT of crude steel in the same month a year ago. The overall production for sale of total finished steel was at 8.256 MT, down 5 per cent over June 2017 but was up by 9 per cent over July 2016, while production of total finished steel for sale was at 34.43 MT during April-June 2017, a growth of 6.9 per cent over same period of last year.

As per the latest report of the Joint Plant Committee (JPC), under the Ministry of Steel, during April-July 2017, the first four months of the fiscal crude steel production was 33.011 MT, against 31.80 MT steel production during the first four months of the preceding fiscal, showing a growth of 3.8 per cent over the same period of the last year.

The JPC which is the only institution in the country, collecting data on the Indian iron and steel industry, also said that overall hot metal production last month stood at 5.526 MT, up 3.5 per cent over July 2016 and 6.1 per cent over June 2017. Further, during the four-month period April-July, the country’s pig iron production for sale was at 3.043 MT, showing a fall of 3.2 per cent over the same period last year, while overall production for sale of pig iron last month at 0.758 MT was up of 0.5 per cent over June 2017 but was down 4.2 per cent over July 2016.

The CNX Nifty is currently trading at 9802.10, up by 7.95 points or 0.08% after trading in a range of 9773.85 and 9830.75. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 4.05%, Tata Power up by 4.02%, Sun Pharma up by 2.31%, Indiabulls Housing up by 2.17% and ITC up by 2.16%.

On the flip side, Bank of Baroda down by 2.36%, Yes Bank down by 2.20%, Larsen & Toubro down by 1.48%, Ultratech Cement down by 1.39% and Asian Paints down by 1.30% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.7 points or 0.04% to 1,773.09, KOSPI Index increased 12.42 points or 0.53% to 2,346.64, Nikkei 225 increased 14.59 points or 0.07% to 19,767.90, Jakarta Composite increased 15.14 points or 0.26% to 5,850.18 and Hang Seng increased 189.78 points or 0.7% to 27,364.74.

On the other hand, Taiwan Weighted decreased 59.03 points or 0.57% to 10,252.13 and Shanghai Composite decreased 5.74 points or 0.18% to 3,245.52.