Local bourses trade flat in early noon deals

Key gauges were trading flat in early noon deals in absence of any major trigger. Traders were taking some solace with a private poll stating that India will remain the fastest-growing major economy this year supported by increased government spending ahead of next year’s general election, but rising oil prices pose the biggest downside risk. Market participants were also taking some support with Narendra Modi’s statement that India is emerging as a global manufacturing and start-up hub and many of the ‘Made-in-India’ products, including cars and smartphones, are exported to nations from whom the country used to import. However, traders remained little cautious with report that the International Monetary Fund (IMF) has cautioned India it should not rely on global financial markets to finance its current account deficit (CAD) when it goes above 3% of gross domestic product (GDP).

On the global front, Asian markets are trading mostly in green on Wednesday thanks to strong US corporate earnings and hopes that China will boost fiscal support for its economy, while long-term US yields hovered near six-week highs on speculation the Bank of Japan could be less accommodative. Back, Buying in metal, industrial and FMCG counters too provided some strength to domestic indices. Some support came in after rupee recovered from its initial sluggishness to trade higher by 8 paise to 68.86 against the American currency in noon deals, following bouts of dollar selling from banks and exporters.

The BSE Sensex is currently trading at 36844.14, up by 19.04 points or 0.05% after trading in a range of 36809.45 and 36928.06. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.09%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Metal up by 1.10%, Industrials up by 0.32%, FMCG up by 0.24%, Basic Materials up by 0.21% and Energy was up by 0.18%, while Telecom down by 1.41%, Consumer Durables down by 0.96%, Power down by 0.71%, Utilities down by 0.67% and TECK was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports up by 1.99%, Yes Bank up by 1.93%, Vedanta up by 1.48%, Bajaj Auto up by 1.20% and Hero MotoCorp was up by 1.20%. On the flip side, NTPC down by 2.93%, Bharti Airtel down by 2.86%, Kotak Mahindra Bank down by 1.17%, TCS down by 1.09% and Hindustan Unilever was down by 1.00% were the top losers.

Meanwhile, State Bank of India’s (SBI) economic research wing has said that the Reserve Bank of India (RBI) will go for status quo in key policy rates in its August policy review. It noted that the only reason why the RBI may go for a hike will be to satiate the self-fulfilling prophecy of market expectations of a rate hike to stem the rupee depreciation. It pointed out that risks to Consumer Price Index (CPI) inflation, which rose to a five-month high of 5.0 percent in June, are evenly balanced, and hike in the minimum support price (MSP) of kharif crops would only statistically push up consumer price inflation by 0.73 percent. However, it added that such an eventuality is unlikely.

It highlighted that the impact from MSP can also be negated by the decline in oil prices which have given a breather to the economy. With concerns being raised on the surge in core inflation or the price rise excluding energy and food, it said that the rise is not broad based and expected the number to come down to 4.5 percent by March from the 6.5 percent for the June quarter. However, it stated that food prices may move up, particularly so for cereals, due to the uneven spatial distribution of the monsoon.

RBI's Monetary Policy Committee (MPC) will begin its three-day meeting on July 30 and announce its decision on the third bi-monthly policy of the current fiscal on August 1. In its last review in June, it had voted unanimously for a rate hike of 0.25 percent.

The CNX Nifty is currently trading at 11125.05, down by 9.25 points or 0.08% after trading in a range of 11118.20 and 11153.00. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 3.64%, Bajaj Finserv up by 2.52%, Yes Bank up by 1.93%, Adani Ports up by 1.88% and Vedanta was up by 1.39%. On the flip side, Ultratech Cement down by 3.10%, NTPC down by 3.02%, Bharti Airtel down by 2.84%, Grasim Industries down by 2.39% and HPCL was down by 2.32% were the top losers.

Asian Markets were trading mostly in green; Jakarta  Composite  gained  4.77  points  or  0.08%  to  5,936.61, Hang  Seng  surged  190.53  points  or  0.66%  to  28,853.10, Straits  Times  advanced  30.44  points  or  0.92%  to  3,323.09 and Nikkei  225  was strengthened  103.77  points  or  0.46%  to  22,614.25.

On the other hand, Taiwan  Weighted  declined  29.60  points  or  0.27%  to  10,965.79, Shanghai  Composite  slipped  1.60  points  or  0.06%  to  2,903.96 and KOSPI  was down  7.09  points  or  0.31%  to  2,273.11.