Markets take a u-turn in green thanks to surprisingly lower July’s inflation data

Local equity markets took a U-turn to trade in green as lower than expected July month’s Inflation number impressing investor’s, provided the required impetus to the lackluster Indian equity markets. The inflation rate, measured by the Wholesale Price Index (WPI), came in much lower at 6.87% than street’s projection of 7.4% and also lower than previous month’s 7.25% figure. This pleasant figure sharply drove the markets to intra-day high level, with 30 share barometer index, piercing through the 17650 level, with gains of over 0.20%, while widely followed 50 share index, Nifty, on NSE, too surpassed the 5350 crucial mark. Broader indices too gained traction in-line with front line indices. Outperforming the 30 share barometer index, Bankex, shot higher close to a percent, after a week today. Following the positive trajectory were the stocks belonging to Metal, Oil & Gas and Public Sector Undertaking counters, however, stocks from Power, Realty and Health care index, remained the weak links of the trade.

Encouraging leads also came at Dalal Street tracing the uptick of the European futures after Germany and France posted better than expected economic data. Germany’s gross domestic product expanded 0.3% in the second quarter from the first, compared with 0.2%. Meanwhile, French GDP was unchanged in the quarter, better than the 0.1% decline that economists had predicted. Additionally, Asian counterparts continue to support the sentiment.

Closer home, the BSE Sensex is currently trading at 17,674.43, up by 40.98 points or 0.23% after touching high of 17,683.16 and low of 17,572.34. There were 17 stocks advancing against 13 declines on the index. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1231:1151, while 127 shares remained unchanged.

The broader indices too gained additional traction; the BSE Mid cap index was up by 0.23%, while Small cap index was up by 0.25%.

The top gainers on the BSE sectoral space were, Bankex up by 0.93% Metal up by 0.81%, Oil & Gas up by 0.57%, PSU up by 0.53%, and Auto up by 0.38%, while Power down by 0.47%, Realty down by 0.37%, HC down by 0.35%, FMCG down by 0.19%, and CG down by 0.09% were top losers on the index.

Jindal Steel up by 2.05%, Coal India up by 2.01%, Tata Steel up by 1.81%, Mahindra & Mahindra up by 0.93% and Tata Motors up by 0.83% were major gainers on the Sensex, while Sun Pharma down by 2.26%, Sterlite Industries down by 1.71%, HDFC down by 1.61%, NTPC down by 1.22% and Bajaj Auto down by 1.15% were major losers on the index.

Meanwhile, after facing an embarrassment last week that only two state and two Union Territories have given written consent for foreign direct investment (FDI) in retail, the government now claims that eight states and two Union territories have expressed their support for FDI in multi-brand retail.

Earlier it was stated that, states of Delhi and Manipur along with Union Territories of Daman and Diu as well as Dadra and Nagar Haveli had expressed their support for FDI, but now Minister of State for Commerce and Industry has said that Maharashtra, Assam, Haryana, Uttarakhand, Andhra Pradesh and Jammu and Kashmir state chief’s have given their consent and asked for its implementation, also one of the non-congress ruled state Punjab, too has been said to be giving a similar commitment soon.

There has been widespread resistance for the retail FDI move, from within the government and outside. Though, the Centre has been trying to evolve a consensus by holding consultations with all stakeholders, including the states, which have to take the final call. But for now the decision has been suspended to evolve a broader consensus among the various stakeholders.

However, there is encouraging news for the retail sector, the commerce ministry has said that India has received six proposals from global single-brand retailers seeking permission to own 51 per cent of their operations in the country. Retailers who have applied to the government include apparel maker Tommy Hillfiger, clothing retailer Brooks Brother Group, Italian jewellery brand Damiani International, French fashion brand Promod SAS, Fapa Company and NA Pali Europe SARL, which is a unit of sport-wear retailer Quiksilver Inc. 

The S&P CNX Nifty is currently trading at 5362.85, up by 14.95 points or 0.28% after trading in a range of 5364.40 and 5,328.80. There were 27 stocks advancing against 22 declines while 1 remains unchanged on the index.

The top gainers on the Nifty were Tata Steel up by 2.15%, ICICI Bank up by 2.11%, Jindal Steel up by 2.00%, Coal India up by 1.98% and Ranbaxy up by 1.95%. While, Sun Pharma down by 2.12%, HDFC down by 1.26%, Sesa Goa down by 1.15%, Sterlite Industries down by 1.05% and Maruti Suzuki down by 0.92% were top losers on the index.

Most of the Asian indices continued to trade in fine fettle; Kospi Composite Index surged 1.27%, Nikkei 225 inched up by 0.50%, Taiwan Weighted added 0.58%, Hang Seng index edged higher by 0.46%, KLSE Composite was holding up by 0.08%, Straits Times rose 0.30% and Shanghai Composite bounced back in green by 0.04% while Jakarta Composite down by 0.01% were the only losers.

European markets got off to positive start; CAC 40 gained 0.70%, DAX surged 0.76% and FTSE 100 advanced 0.55%.