Indian equities continue to trade firm

Indian equities continued to trade in fine fettle on back of strong buying in frontline counters in the late morning session. On the global front, the Asian markets were trading in green on better data from US recovery in housing sector has boosted the outlook of companies engaged in US. The Chinese market too has gained over a percent amid speculation country will take more action to revive economic growth. It is expected that Premier Wen Jiabao will probably decide to cut banks’ reserve requirements and encourage corporate lending as the cabinet meets to discuss efforts to revive economic growth. On the home turf, traders were seen piling up position in CD, IT and Power sector while selling was witnessed in Auto, sector. India's largest car maker by sales Maruti Suzuki down by 8% after violence erupted at its Maneser plant, resulting in dozens of injuries, damaged property and forcing the company to halt output at the plant. Meanwhile, traders will be eyeing the President poll today, though UPA’s presidential candidate Pranab Mukherjee’s win is imminent as per numbers are concerned but market is eyeing some reforms to take place after the election. It is expected that apart from hiking diesel prices the government is planning to quickly put in place a mechanism to cap the number of subsidized LPG cylinders for a household to 6-8 per year and that may support the PSU OMCs. The NSE Nifty and BSE Sensex were trading above their psychological 5,200 and 17200 levels respectively.

The market breadth on BSE was positive in the ratio of 1354:679 while 80 scrips remained unchanged

The BSE Sensex is currently trading at 17285.32 up  by 100.31 points or 0.58% after trading as high as 17317.56 and as low as 17262.11. There were 21 stocks advancing against 9 declines on the index.

The broader indices were trading on a positive note; the BSE Mid cap index up 0.53% while Small cap index was up 0.66%.

On the BSE sectoral space, CD up by 0.1.51%, IT up by 1.46%, Power up by 1.27%, Metal up by 1.23%, and CG up by 1.12%, while Auto down by 0.45%  were the only losers on the index.

BHEL up by 2.63%, Infosys up by 1.94%, Tata Motors up by 1.72%, Sterlite Inds up by 1.60% and Tata Power by 1.58% were the major gainers on the Sensex, while Maruti Suzuki down by 7.49%, Bharti Airtel by 1.42%, Hero MotoCorp down by 0.82%, ITC down by 0.26% and Bajaj Auto down by 0.15% were the major losers in the index.

 Meanwhile, amid the confusing signals of inflation, Dr D. Subbarao, Governor, Reserve Bank of India has said that India needs to have a Producers Price Index (PPI), which measures price changes from the perspective of the seller. The Governor, who constantly keeps a watch on the inflation to shape the apex bank’s policy decision, has said that “It is difficult, even for me, to interpret inflation.” He said the weightage is different for commodities in the consumer price index and the wholesale price index. “This is a problem.”

The RBI governor is of the view that the Wholesale Price Index (WPI) does not capture the price movement of services. Also, it is a hybrid of consumer and producer price quotes. Further stating he said that the Producer Price Index (PPI) will be better able to measure the average change over time in the sale prices of domestic goods and services as it gives a better picture of price trend as it is less volatile.

Core inflation or Producers Price Index is usually estimated by excluding food and energy prices from the basket of goods and services that represents a household’s spending, as the prices of food and energy tend to fluctuate sharply and such volatility from the supply side gets passed on to the general price index, making it difficult to interpret the overall trend. Meanwhile, India’s headline inflation slowed to its lowest level in five months in June to 7.25 percent. 

The S&P CNX Nifty is currently trading at 5,247.15, up  by 30.85 points or 0.59% after trading as high as 5,257.75 and as low as 5,240.95. There were 41 stocks advancing against 8 declines while 1 stock remains unchanged on the index.

The top gainers on the Nifty were BHEL up by 2.95%, Cairn up by 2.26%, IDFC up by 2.12%, INFY by 1.75% and HCL Tech up by 1.71%. While Maruti down by 7.78%, Bharti Airtel down by 1.74%, Bank Baroda down by 0.85%, Hero Moto co down by 0.72% and ITC down by 0.35% were the major losers on the index.

Most of the Asian equity indices were trading in the green; KLSE Composite up 0.08%  Hang Seng index up by 1.46%, Nikkei 225 up 0.93%, Kospi Composite Index up 1.55%, Straits Times up 0.27%, Taiwan Weighted up 1.42% ,Shanghai Composite was up 1.11%.  While Jakarta Composite was down by 0.17% was the only loser in the Asian pack.