Indian equities regain lost ground to trade above neutral line

Indian equities gain strength to continue firm trade above neutral line in the late afternoon session on back of buying in front line counters. After RBI’s first quarterly monetary policy review the market drifted towards the day lows but it recouped the lost ground as support emerged at lower levels. Traders were seen piling up position in IT, Realty and FMCG sector while selling was witnessed in Consumer Durable, Metal and Bankex sector. Interest rate sensitive Banking stocks were seen trading under pressure after the apex bank kept repo rate unchanged its first quarter review of monetary policy 2012-13. In the scrip specific development, Shree Cements was seen trading under pressure after the competition watchdog the Competition Commission of India (CCI) yesterday imposed a penalty of Rs 397.5 crore on the company. SpiceJet, a low fare carrier, was seen trading firm in green after investor Rakesh Jhunjhunwala’s Rare Enterprises bought 25 lakh shares yesterday amounting to Rs 7.69 crore.

On the global front, the Asian markets were trading in green barring Straits Times and Shanghai Composite while the European markets were trading on a mixed note. The European Central Bank President Mario Draghi met with US Treasury Secretary Timothy Geithner after leaders in Berlin, Paris and Rome backed him by saying they will do what’s needed to protect the 17-nation euro. Separately, European Commission survey showed a decline in confidence among businesses and consumers in the euro zone in July from June as investors worry about the growing uncertainties in the region. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,200 and 17,100 levels respectively. The market breadth on BSE was negative in the ratio of 1223:1315 while 139 scrips remained unchanged.

The BSE Sensex, after gaining 51.96 points or 0.30% is currently trading at 17,195.64. The index, so far has touched a high of 17208.45 and a low of 17004.09. There were 17 stocks advancing against 13 declining ones on the index.

The broader indices were trading on a mixed note; the BSE Mid cap was up 0.23% while Small cap indices were down 0.02%.

Consumer Durables down by 1.36%, Metal down by 0.31% and Bankex down by 0.28% were the only losers on BSE sectoral space, while IT up by 0.97%, Realty up by 0.80%, Fast Moving Consumer Goods (FMCG) up 0.57%, TECk up 0.52% and Health Care up by 0.52% were the top gainers on the index.

Wipro up by 2.03%, Cipla up by 1.98%, ONGC up by 1.65% HDFC up by 1.45% and Maruti Suzuki up by 1.33% were the top gainers on the Sensex, while Bharti Airtel down by 2.04%, Jindal Steel down by 1.61%, M&M down by 1.54%, SBI down by 1.15% and Dr Reddy’s Lab down by 1.00% were the major losers in the index.

Meanwhile, as drought-like situation has started evolving in some states of India, the Empowered Group of Ministers (EGoM) chaired by Agriculture Minister Sharad Pawar is going to hold a meeting to discuss measures to tackle the situation. The primary focus of the meeting will be on addressing fodder and water scarcity, besides insulating farmers from higher input costs.

The EGoM will also concentrate on limiting stockholdings and a possible ban on futures trade in agricultural items. The government might also consider providing a diesel and electricity subsidy to farmers in the four worst-hit states of Rajasthan, Gujarat, Karnataka and Maharashtra.

The annual monsoon rains in India has recorded a 21% decline since the four-month season began in June.  Karnataka, Maharashtra, Gujarat and Rajasthan are currently facing drought-like conditions throwing threat to the sowing of kharif crops.

The S&P CNX Nifty is currently trading at 5217.50, up by 17.70 points or 0.34%. The index so far has touched a high of 5218.35 and low of 5154.05 respectively. There were 28 stocks advancing against 21 declining ones while 1 stock remained unchanged on the index.

The top gainers on the Nifty were DLF up by 3.27%, Wipro up by 2.46%, Grasim Industries up by 2.34%, Power Grid up by 2.07% and Cipla up by 1.91%. While, Bank Baroda down by 2.42%, BPCL down by 2.32%, Bharti Airtel down by 2.17%, M&M down by 1.92% and Jindal Steel down by 1.81% were the major losers on the index.

Most of the Asian indices were trading in green; Hang Seng index gained 1.08%, Nikkei 225 added 0.69%, Taiwan Weighted surged 1.56%,  KLSE Composite inched up 0.16%, Kospi Composite Index spurted by 2.07%  and  Jakarta Composite  rose 0.61%  while  Straits Times down by 0.07%  and Shanghai Composite lost 0.30% were the losers.  

The European markets were trading on a mixed note with, France’s CAC 40 ascending 0.08%, Germany’s DAX gained 0.44% and the United Kingdom’s FTSE 100 dropped 0.09%.