Key indices add gains; Axis Bank top gainer

Going from strength to strength, the local equity indices gathered further ground in afternoon trade, with gains of over half a percent, on the back of easing wholesale price index (WPI) inflation data. Inflation based on wholesale prices cooled slightly to 5.09% in July as compared to 5.77% in June, indicating that prices of certain commodities have fallen marginally. Sentiments remained up-beat with the Central Statistics Office’s (CSO) data showing that India’s Retail inflation fell to nine-month low of 4.17% in July on account of slowdown in prices of vegetables and fruits. Its previous low was in October 2017 at 3.58%. Retail inflation, measured by Consumer Price Index (CPI) had hit a five-month high of 5% in June. Besides, recovery in the rupee value against dollar along with encouraging earnings by some blue-chip firms including Tata Steel also helped in building positive sentiments. On the sectoral front, realty sector remained in focus with private report stating that the sector needs more reforms to break free of the various ills that still plague it in order to realise its full potential as a major contributor to the country's GDP.

On the global front, Asian markets were trading mostly in red, after Wall Street declined and Turkey's currency crisis fed fears about emerging markets. Back home, the BSE Sensex is currently trading at 37867.37, up by 222.47 points or 0.59% after trading in a range of 37689.71 and 37870.03. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Realty up by 1.25%, IT up by 1.11%, TECK up by 0.93%, Bankex up by 0.81% and FMCG up by 0.68%, while Telecom down by 0.33%, Capital Goods down by 0.31%, Industrials down by 0.21% and Power down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.01%, Yes Bank up by 1.46%, Hindustan Unilever up by 1.45%, Sun Pharma up by 1.31% and ICICI Bank up by 1.09%. On the flip side, Adani Ports &SEZ down by 1.23%, Larsen & Toubro down by 0.69%, Bharti Airtel down by 0.65%, Vedanta down by 0.58% and NTPC down by 0.44% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has backed the proposal of state-owned Rural Electrification Corporation (REC) to set up an Asset Reconstruction Company (ARC) to take over stressed assets in the power sector. The power sector is grappling with non-performing assets (NPAs) of about Rs 1.74 lakh crore. 

The apex bank had said that it is open to plan of REC setting up an ARC. It noted that the proposal should be premised on a ‘level playing field’ agnostic of public/private ownership, and based on transparent price discovery. A panel was formed in compliance of the order of the Allahabad High Court. The High Court on May 31 stayed the February 12 RBI circular on companies other than willful defaulters and directed the finance ministry to hold a meeting of all stakeholders on resolutions.

Acting on the direction, a meeting chaired by the financial services secretary with all stakeholders was convened on June 22. On the basis of meeting, a report was prepared and sent to the power ministry for further action as per the court order. Besides, the report suggested setting up of a high level empowered committee (HLEC). In line with the report, the government constituted a high-level empowered panel under the cabinet secretary to resolve issues plaguing the power sector and revive stressed assets.

The CNX Nifty is currently trading at 11429.95, up by 74.20 points or 0.65% after trading in a range of 11370.80 and 11432.65. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 3.40%, Eicher Motors up by 2.56%, Bajaj Finance up by 2.38%, Tech Mahindra up by 2.28% and Axis Bank up by 1.98%. On the flip side, UPL down by 4.04%, Adani Ports &SEZ down by 1.33%, Bharti Airtel down by 0.97%, HPCL down by 0.90% and Indiabulls Housing Finance down by 0.85% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 240.12 points or 0.87% to 27,696.45, Straits Times dipped 0.08 points or 0% to 3,245.26, Shanghai Composite was down by 7.08 points or 0.25% to 2,778.79 and Jakarta Composite shed 37.75 points or 0.65% to 5,823.50.

On the flip side, KOSPI increased 10.46 points or 0.46% to 2,258.91, Nikkei 225 added 498.65 points or 2.23% to 22,356.08 and Taiwan Weighted rose 75.31 points or 0.7% to 10,824.23.