Benchmarks pare some gains after a gap-up opening

Indian equity benchmarks are trading off day’s highs, as markets participants opted to book some profit at higher levels on report that leading stock exchange BSE announced on Monday that it will ‘compulsorily’ delist 200 firms this week and bar their promoters from the markets for 10 years as trading in these shares have remained suspended for over a decade. All these companies will be delisted from August 23. However, markets managed to trade in green terrain as traders were taking support with DIPP’s report that FDI flow into the country grew 37 per cent to $10.4 billion during the first quarter of this financial year. India received $7.59 billion FDI during April-June 2016-17.

Global cues too remained supportive with all the Asian counters trading in green at this point of time. Japanese market too was showing modest gains as the yen snapped four days of gains and investors reassessed positions ahead of a meeting of central bankers. The US markets extending their sluggishness made a mixed closing in last session and major averages showed a lack of direction over the course of the trading session.

Back home, stocks related to oil & gas sector remained buzzing, as the government has clarified that upstream oil and gas companies can avail an input tax credit (ITC) on Goods and Services Tax paid only on the value added products that are manufactured and covered under GST. Meanwhile, the market breadth indicating the overall health of the market was strong, with 932 shares gaining and 884 shares declining, while a total of 92 shares were unchanged.

The BSE Sensex is currently trading at 31324.72, up by 65.87 points or 0.21% after trading in a range of 31265.02 and 31484.28. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.22%, while Small cap index was up by 0.02%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.31%, Energy up by 0.79%, Telecom up by 0.41%, PSU up by 0.38% and IT was up by 0.36%, while Power down by 0.18%, Realty down by 0.17%, Capital Goods down by 0.08%, Consumer Disc down by 0.07% and Basic Materials down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 2.18%, Sun Pharma up by 1.83%, Axis Bank up by 1.57%, Tata Motors - DVR up by 1.55% and Dr. Reddys Lab up by 0.98%. On the flip side, Power Grid Corporation down by 0.41%, SBI down by 0.38%, Hero MotoCorp down by 0.29%, Bajaj Auto down by 0.27% and Mahindra & Mahindra down by 0.06% were the top losers.

Meanwhile, credit rating agency Care Ratings in its latest report has stated that India Inc.'s profits dipped by 15.7% to Rs 87,475 crore in the first quarter of the fiscal year 2017-18, mainly due to destocking of goods by companies before execution of Goods and Services Tax (GST) regime from July 1, 2017. As per the rating agency’s analysis of 2,108 companies, the corporate net profits stood at about Rs 1.04 lakh crore in April-June period of 2016-17. The net sales of companies also slowed down to 8.7% in the three months ended June 2017, after registering a growth of 9.5% in the same period previous year.

The analysis showed that as many as 7 industries reported net loss, while 33 segments reported lower growth in net profit on year-on-year basis during the quarter ended June 2017. The maximum drop was seen in consumer goods, automobiles and related segments, construction & real estate, finance, refineries, paper & paper products, pesticides & agrochemicals sectors. Moreover, profitability of services sector like hospitality and retailing were also impacted.

According to the report, in terms of net sales, 40 industries saw positive growth in sales in the Q1FY18. Some of the leading industries include sugar, electronics, passenger cars and tractors, capital goods, metals, NBFCs, hotels, resorts and restaurants, mining, refineries, plastic products, industrial gases and fuels. However, 9 industries witnessed negative growth in net sales in the period under review with significant declines witnessed in pharmaceuticals and drugs, auto trucks/LCVs, ferrous metals, telecom service providers. It further added that industries related to households where demand is inelastic remained largely stable with minimal slowdown. However, pharmaceuticals and drugs industry saw a sharp dip on account of lower exports.

The CNX Nifty is currently trading at 9786.70, up by 32.35 points or 0.33% after trading in a range of 9763.05 and 9828.45. There were 35 stocks advancing against 15 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Tech Mahindra up by 2.69%, Indian Oil Corporation up by 2.24%, Lupin up by 1.96%, Bharti Infratel up by 1.80% and Hindalco up by 1.78%. On the flip side, Bank of Baroda down by 1.69%, Hero MotoCorp down by 0.96%, Indiabulls Housing down by 0.96%, Yes Bank down by 0.62% and Power Grid Corporation down by 0.57% were the top losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI rose 2.68 points or 0.15% to 1,774.30, Shanghai Composite gained 4.8 points or 0.15% to 3,291.71, KOSPI Index increased 9.09 points or 0.39% to 2,364.09, Jakarta Composite jumped 10.7 points or 0.18% to 5,871.70, Nikkei 225 advanced 14.13 points or 0.07% to 19,407.26, Taiwan Weighted added 67.12 points or 0.65% to 10,393.51 and Hang Seng was up by 283.08 points or 1.04% to 27,437.76.