Benchmarks continue to trade in green in morning session

Indian equity benchmarks continued their trade in green in the morning session on back of buying in frontline blue chip counters. Adding to the optimism, the rupee opened higher against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets on Tuesday and sold shares worth Rs 415.51 crore with gross purchases and gross sales of Rs 4,042.99 crore and Rs 4,458.50 crore, respectively. Traders got some support with report that India’s factory output expanded by a modest 1.2% in July, 2017, after contracting 0.17% in June, possibly on the back of some restocking by companies following the July 1 goods and services tax (GST) rollout and a marginal uptick in the core sector. Investors took note of the joint report by ASSOCHAM-EY, which highlighted that if India has to maintain a sustained gross domestic product (GDP) growth of 9-10 per cent per annum, it is crucial that the manufacturing sector grows steadily at 14-15 per cent per annum over the next three decades. The report added that while the Goods and Services Tax (GST) has to a large extent addressed prevailing regulatory issues, states across India must individually look into bureaucratic obstacles along with other obstructive regulations and policies on priority, based on their own manufacturing goals.

Public sector banks were buzzing on reports that the government is exploring the sale of capitalization bonds to meet the burgeoning capital requirements of state-run lenders, mostly the weaker ones that are finding it difficult to raise resources from the market. Select dairy stocks were buzzing after the Cabinet Committee on Economic Affairs (CCEA) on Tuesday approved a Dairy Processing and Infrastructure Development Fund with an outlay of Rs 10,881 crore for 2017-18 to 2028-29 to boost the dairy sector. Telecom stocks displayed mixed reactions on report that the Telecom Commission (TC) has asked the inter-ministerial panel looking into the health of the telecom sector to consider ways for giving greater and immediate relief to telcos, which are facing high debt levels and falling revenues.

On the global front, Asian markets were trading mostly in red, while Nikkei on track for 3rd straight gain. Japanese wholesale prices rose at the fastest annual pace in nearly nine years in August as robust Chinese demand boosted commodity prices, offering glimmers of hope consumer inflation will accelerate toward the central bank’s 2 percent target. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 32,200 and 10,100 levels respectively. The market breadth on BSE was positive in the ratio of 1234:913, while 113 scrips remained unchanged.

Back home, traders were seen piling up position in Energy, Healthcare and Utilities stocks, while selling was witnessed in Capital Goods, FMCG and Metal sector stocks. In scrip specific development, Jet Airways was trading in green on reporting a two-fold increase in quarterly net profit as a decline in provision of bad loans given to its loss-making subsidiary offset a flat operating performance. India’s second-biggest airline by market share posted a standalone net profit of Rs 53.50 crore in the April-June quarter, compared to Rs 25.88 crore a year earlier. Phoenix Mills was trading in green on reports that the retail developer is buying back stakes from various investors in four of its mall projects for around Rs 1,350 crore, making it the sole owner of the assets.

The BSE Sensex is currently trading at 32239.66, up by 81.00 points or 0.25% after trading in a range of 32137.71 and 32258.28. 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 0.49%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Energy up by 1.33%, Healthcare up by 1.25%, Utilities up by 0.74%, Power up by 0.64% and Oil & Gas was up by 0.59%, while Capital Goods down by 0.51%, FMCG down by 0.41%, Metal down by 0.34% and Telecom was down by 0.02% were the few losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.68%, Dr. Reddy’s Lab up by 2.26%, Sun Pharma up by 1.99%, Mahindra & Mahindra up by 1.25% and Tata Motors up by 1.05%.

On the flip side, ITC down by 1.39%, Larsen & Toubro down by 1.25%, Coal India down by 0.80%, HDFC down by 0.73% and Tata Steel down by 0.53% were the top losers.

Meanwhile, the Consumer Price Index (CPI) or retail inflation jumped to five month high of 3.36% in the month of August 2017, mainly due to an increase in foods prices and higher services costs, indicating Goods and Services Tax’s (GST’s) inflationary impact. But, on a year-on-year basis, it was lower than the 5.05% CPI rate reported for the corresponding month of last year. However, the rate is still below/above the Reserve Bank of India's (RBI) medium-term target of 4%.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the Consumer Price Index (CPI) (Rural, Urban, Combined) on Base 2012=100 for August 2017, stood at 3.30%, 3.35% and 3.36% respectively, compared to at 5.87%, 4.22% and 5.05% respectively in August 2016. The data also showed that Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for August 2017 stood at 1.38%, 1.67% and 1.52%, respectively, compared to 6.32%, 5.10% and 5.91% respectively in August 2016. The index value of CFPI for combined stood at 140.1 for the month of August.

According to the data, Consumer food price inflation, a metric to gauge changes in monthly kitchen costs, continued to remain soft, with prices showing gradual improvement at 1.52% from (-) 0.36% in July as compared with 5.91% in the same period last year. Vegetable prices witnessed a growth of 6.16% in August as compared with (-) 3.57% in July. Prices of pulses though fell 24.43 percent, as compared with (-) 24.75 in July. Housing inflation grew 5.58% in August from 4.98% in July. Fuel inflation was 4.94% in August, as compared with 4.84% in July. Pan, tobacco and intoxicants rose 6.85% in August.

The CNX Nifty is currently trading at 10113.35, up by 20.30 points or 0.20% after trading in a range of 10084.05 and 10120.70. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 6.11%, Reliance Industries up by 2.73%, Dr. Reddy’s Lab up by 2.23%, Sun Pharma up by 2.15% and Bank of Baroda up by 2.01%.

On the flip side, ITC down by 1.46%, Larsen & Toubro down by 1.39%, BPCL down by 1.15%, Indiabulls Housing down by 1.00% and Hindalco down by 0.88% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 68.58 points or 0.65% to 10,541.77, Hang Seng decreased 66.1 points or 0.24% to 27,906.14, FTSE Bursa Malaysia KLCI decreased 1.43 points or 0.08% to 1,788.43 and Shanghai Composite decreased 0.82 points or 0.02% to 3,378.67.

On the other hand, Jakarta Composite increased 1.66 points or 0.03% to 5,874.03, KOSPI Index increased 6.7 points or 0.28% to 2,372.17 and Nikkei 225 increased 100.85 points or 0.51% to 19,877.47.