Bourses gyrate in thin band; broader indices continue to exhibit mix trend

Gyrating in a narrow band, benchmark equity indices have pared some gains, post the release of  July month’s CPI data, which despite easing a bit from previous month’s level, remains substantially above the Reserve Bank of India’s comfort level. Thanks to the drop in petrol prices at the pump, the annual rate of inflation, based on the consumer prices index (CPI) in India, eased marginally in the month of July to 9.86 percent, although drought in parts of the country, which drove food prices higher, limited the downside. However, much of the strength continues to persist in Indian equity markets, on account of sustained buying by funds and retailers driven by the government’s bid to revive investments across-the-board amid better trend in Asia. In an effort to restart the engine of manufacturing Finance Minister P Chidambaram urged banks to slash interest rates and keep EMIs at affordable levels in order to encourage sale of consumer durables. 30 share barometer index of Bombay Stock Exchange (BSE), Sensex, sustaining over 50 points gains, is currently trading above the 17700 level, while 50 share index of National Stock Exchange (NSE), Nifty, advancing over 15 points, was trading above the crucial 5350 level. However, the broader indices continued to showcase mixed trend. Supporting the upside of the bourses, are the stocks belonging from Information Technology, Technology and Auto counters, however, stocks from Consumer Durable, Metal and Capital Goods, continue to eat into the gains of the bourses.

Positive start of European counterparts also might support the uptrend of the bourses, going further in the day. European shares, edged higher on Tuesday, ahead of a series of meetings in the euro zone later this week, even as European Central Bank quashed speculation that it is preparing to set a cap on euro-zone government bond yields as part of a policy response to the crisis in the region.

Closer home, the BSE Sensex is currently trading at 17759.47, up by 68.39 points or 0.39% after touching a high of 17815.76 and low of 17705.14. There were 18 stocks advancing against 12 declines on the index.  The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1297:1262, while 117 shares remained unchanged.

The broader indices continued to exhibit mixed trend; the BSE Mid cap index edged lower by 0.01%, while Small cap index edged higher by 0.32%.

The top gainers on the BSE sectoral space were, IT up by 1.41%, TECk up by 1.08%, Auto up by 0.75%, Realty up by 0.71%, Power up by 0.49% and while CD down by 0.43%, Metal down by 0.48%, CG down by 0.36% Bankex down by 0.41%, and FMCG down 0.18%  were top losers on the sectoral space.

HDFC up by 2.33%, Infosys up by 2.20%, Tata Motors up by 2.02%, Cipla up by 2.00% and  Mahindra & Mahindra up by 1.41% were major gainers on the Sensex, while Hindalco Industries down by 2.90%, Tata Steel down by 1.57%, Hero MotoCorp down by 1.32%, HDFC Bank down by 1.04% and Coal India down by 0.73% were major losers on the index.  

Meanwhile, with slowing industrial activity, CII-Ascon survey has suggested the government of India to expedite measures in fiscal and monetary policy for arresting downward in industrial activity, which may continue in the current quarter as well. It also urged Reserve Bank of India (RBI) to reduce policy rates, while emphasizing importance of building investors’ confidence.

It has projected possible growth in 103 industrial sectors in the current quarter, and called for some steps that can improve growth prospects, like reduction in interest rates, faster implementation of GST (Goods and Services Tax), fast tracking of large projects, re-consideration of the retrospective amendments and GAAR.

It pointed out that faster implementation of projects would lift sentiments and boost investments. As per the survey, sectors which are likely to dip in the current quarter include capital goods segments like earth moving and construction equipment, electric motors and textile machinery.  It also noted that consumer good sectors like sunflower oil, mustard oil, soya, air conditioners, TV and passenger cars are expected to record low or negative growth performance in the July-September period.

The S&P CNX Nifty is currently trading at 5,381.45, up by 15.15 points or 0.28% after trading in a range of 5,397.30 and 5,368.70. There were 30 stocks advancing against 20 declines on the index.

The top gainers on the Nifty were DLF up by 2.34%, HDFC up by 2.30%, Infosys up by 2.08%, Tata Motors up by 2.00% and Cipla up by 1.97%. While, Hindalco down by 2.73%, Tata Steel down by 1.63%, Hero MotoCorp down by 1.61%, Cairn down by 1.03% and Axis Bank down by 1.01% were top losers on the index.

Asian indices were trading mixed; Straits Times added 0.13%, Shanghai Composite advanced 0.32%, Taiwan Weighted surged 1.01% and KLSE Composite was flat, on the flip side, Nikkei 225 down 0.16%, Kospi Composite Index  declined 0.16% and Hang Seng descended 0.31%.

Jakarta Composite is closed till Wednesday, due to public and Idul Fitri holidays.

European markets got off to positive start; CAC 40 gained 0.72%, DAX added 0.47%  and FTSE 100 rose 0.44%.