Indian equities continue firm trade; CG, HC and Realty leads

Indian equities gain minor strength to continue firm trade above neutral line in the late afternoon session on back of buying in front line counters and taking clues from European counterparts. The gains at Dalal Street however remain curbed, with the release of manufacturing activity data, which grew at a slower clip in July. According to the HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at the slowest pace in the past eight months to 52.9 in July, 2012 as against 55.0 in the previous month of 2012. Traders were seen piling up position in Capital Goods (CG), Health Care (HC) and Realty sector while selling was witnessed in Metal, IT and TECk sector. In the scrip specific development, Rain Commodities is trading firm as its board will meet on August 13 to consider buyback of shares. Orissa Minerals Development Company (OMDC) was trading in green as the company is going to consider bonus share issue and stock split on August 9. Besides, it will also consider merger of Bisra Stone Lime with itself on the same day.

On the global front, the Asian markets were trading on a mixed note while the European markets were trading on optimistic note. The European central banks and some leaders have reiterated that the 17-nation union is staying together, but already there is comments coming out of Germany indicating that they are not willing to go down that path without serious concessions from other countries. Besides, the euro-zone unemployment rate remained unchanged in June. The jobless rate for June was a record high of 11.2% matching the data in May but increased from 10% in the month a year ago. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,200 and 17,200 levels respectively. The market breadth on BSE was positive in the ratio of 1614:1013 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 17,263.08 up by 26.90 points or 0.16% after touching a high of 17,291.99 and a low of 17,189.16. There were 17 stocks advancing against 13 declines on the index.

The broader indices were too trading in green; the BSE Mid cap index was up 0.80%, while Small cap index shot higher by 0.90%.

The top gainers on the BSE sectoral space were, Capital Goods up by 1.05%, Health Care up by 1.04%, Realty up by 0.93%, Power up by 0.74% and Consumer Durable up by 0.51% while Metal down by 0.75%, IT down by 0.58%, TECk down by 0.53% and PSU down by 0.25% were the only losers on the BSE sectoral space.

Cipla up by 4.27%, BHEL up by 2.18%, SBI up by 1.51%, HDFC up by 1.49% and Tata Power up by 1.48% were major gainers on the Sensex, while Coal India down by 3.34%, Hero MotoCorp down by 1.78%, ONGC down by 1.03%, TCS down by 1.02% and Tata Steel down by 0.87% were the major losers in the index.

Meanwhile, with the economic growth of India slowing to a nine-year low, both in the March quarter at 5.3 percent as well as in 2011-12 at 6.5 percent, India's chief economic advisor Kaushik Basu expressed an optimistic view on India’s financial growth in his farewell note. He re-emphasized that India is one of the fastest-growing nations in the world and urged it to use current opportunities so as to outperform in the financial year.

Basu committed that the policy reforms were bit slow but affirmed that the country will still register growth at faster pace when compared to other countries. He also pointed out the causes for the slow growth in the last quarter, which were policy inaction, high inflation and interest rates at home and global uncertainty.

He supported Reserve Bank of India's decision in keeping key interest rates unchanged so as to check price rise and also voted its action, which lowered the Statutory Liquidity Ratio (SLR) by 1% to 23%. Though, prescribed partial decontrol of diesel, but opined that the right time has to be decided by the government since drought-like conditions are developing in some states of the country.

Basu by adding further said the eradication of corruption is also inevitable for country’s growth and prospects, while creating other layer of bureaucracy is not the right way of approach.

The S&P CNX Nifty is currently trading at 5,236.85, up by 7.85 points or 0.15% after touching a high of 5,246.35 and a low of 5,212.65. There were 27 stocks advancing against 23 declining ones on the index.

The major gainers on the Nifty were Cipla up by 3.87%, Kotak Bank up by 3.73%, Reliance Infrastructure up by 3.26%, Ambuja Cement up by 2.47% and JP Associates up by 2.45%. While, Coal India down by 3.38%, Hero MotoCorp down by 1.85%, Sesa Goa down by 1.52%, TCS down by 1.40% and ONGC down by 1.28% were the major losers on the index.

Majority of Asian indices were trading in red; Nikkei 225 declined 0.61%, Taiwan Weighted lost 0.03%, Kospi Composite Index slid 0.11%, KLSE Composite inched lower 0.01% and Jakarta Composite skid by 0.59% while Hang Seng index added 0.12%, Straits Times rose 0.50% and Shanghai Composite shot higher by 0.94%.

The European markets were trading in green with, France’s CAC 40 ascending 0.25%, Germany’s DAX gained 0.14% and the United Kingdom’s FTSE 100 added 0.51%.