Benchmarks continue to trade in green

Indian equity benchmarks added strength and continued their firm trade in the morning session on widespread gains following sustained buying by domestic institutional investors. As per the provisional data, DIIs bought shares worth Rs 1,336.91 crore, while foreign portfolio investors (FPIs) sold shares to the tune of Rs 1,090.10 crore yesterday. Traders took some encouragement from the report that government has revised upward the country’s overall food grain production by 2.3 million tonnes (MT) to a record 275.68 MT in 2016-17 crop year that ended in June. Record output has been achieved in rice, wheat, coarse cereals and pulses on the back of good rains in the said period. Traders also reacted positively to minutes from the last meeting of Monetary Policy Committee whose members said easing inflation had supported the need for a rate cut at its August meeting, but warned consumer prices could start accelerating. Some support also came with report that American think-tank Council on Foreign Relations’ Senior Fellow for India Alyssa Ayers has said that the country has emerged as a strong world power but still has a long way to go.

Some support also crept in after the cabinet cleared the CGST refund scheme with a budgetary allocation of Rs 27,413 crore. This will come as a big relief to sectors like Pharma, Automobiles and FMCG units. Separately, in line with the government’s policy, the RBI said farmers can avail of short-term crop loans of up to Rs 3 lakh at subsidized interest rate of 7% that could go down to 4% on prompt repayment. The RBI said in a notification to banks that in order to ensure hassle-free benefits to farmers under the Interest Subvention Scheme, the banks are advised to make Aadhaar linkage mandatory for availing of short-term crop loans in 2017-18.

Traders were seen piling up position in Metal, Telecom and IT stocks, while selling was witnessed in Bankex and Auto sector stocks. In scrip specific development, Infosys was trading firm after the company informed that the board will consider a proposal to buy back shares on August 19. The company said it would pay shareholders up to $2 billion through dividends and share buybacks in FY18. Majesco was trading in green on expanding its strategic partnership with Tier One Insurer to provide additional services including development, testing and business analysis for their multi-year modernization program.

On the global front, Asian markets were trading mostly in green, as tensions between the US and North Korea came off the boil. Japan’s exports rose for an eighth straight month in July on robust shipments to the United States and a boost from a weak yen, a sign overseas demand rebounded from a lull in the previous quarter to underpin a steady economic recovery. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 31,800 and 9,900 levels respectively. The market breadth on BSE was positive in the ratio of 1492:601, while 88 scrips remained unchanged.

The BSE Sensex is currently trading at 31873.95, up by 103.06 points or 0.32% after trading in a range of 31783.82 and 31937.51. 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 0.54%, while Small cap index was up by 0.99%.

The top gaining sectoral indices on the BSE were Metal up by 2.01%, Telecom up by 1.54%, IT up by 1.39%, TECK up by 1.31% and Energy up by 1.24%, while Bankex down by 0.17% and Auto down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.94%, Infosys up by 3.09%, Bharti Airtel up by 1.45%, Reliance Industries up by 1.23% and NTPC up by 1.09%.

On the flip side, Hindustan Unilever down by 1.29%, Kotak Mahindra Bank down by 0.78%, Cipla down by 0.75%, TCS down by 0.64% and Asian Paints down by 0.58% were the top losers.

Meanwhile, the government has raised estimate on food grain output for the crop year ended June on the back of increase in the estimated yields of paddy and wheat.  As per the agriculture ministry’s fourth advance estimates, production of food grain from major crops has been pegged at 275.68 million tonnes, up by over 2 mt or 0.84 per cent than the third advance estimate. That would also be 4.01 per cent more than the previous record, set in 2013-14.

As per the estimates pulses production is expected to go up by 500,000 mt to 22.95 mt and the maize yield is pegged marginally higher than the previous estimate at 26.26 mt, on back of improved yields estimated from tur and gram, which are projected to be 4.78 mt and 9.33 mt, respectively.

According to the latest data the total cotton output is projected to be 33.10 million bales as against the 32.58 estimated in May. Half a million bales (of 170 kg each) of additional cotton yield is expected as major cotton growing areas in the country received good showers in 2016-17.

On the other hand, oilseeds yield is expected to drop further to 32.10 mt from an earlier estimated 32.52 mt. The poor projections for oilseeds were on account of estimated lower yields of soybean, which as 13.7 mt as against the earlier estimate of 14 mt, and castorseed, whose projections came down to 1.42 mt from 1.54 mt estimated in the 3rd advance estimate.

The CNX Nifty is currently trading at 9934.55, up by 37.25 points or 0.38% after trading in a range of 9900.40 and 9947.80. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Coal India up by 3.61%, Vedanta up by 3.43%, Infosys up by 3.37%, Bank of Baroda up by 2.31% and BPCL up by 1.89%.

On the flip side, Hindustan Unilever down by 1.29%, Kotak Mahindra Bank down by 0.77%, Cipla down by 0.67%, HDFC down by 0.62% and IndusInd Bank down by 0.58% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.66 points or 0.04% to 1,774.41, KOSPI Index increased 13.54 points or 0.58% to 2,361.80, Shanghai Composite increased 14.22 points or 0.44% to 3,260.67 and Taiwan Weighted increased 72.98 points or 0.71% to 10,363.37.

On the other hand, Nikkei 225 decreased 16.67 points or 0.08% to 19,712.61 and Hang Seng decreased 12.3 points or 0.04% to 27,396.77.

Jakarta Stock Exchange is closed on account of ‘Independence Day’ holiday.