Benchmarks trade firm in early deals amid positive global cues

Indian equity markets made optimistic start and are trading firm in early deals on Wednesday, with Sensex and Nifty gaining 0.29% each. Traders took encouragement with government data showing that India’s retail inflation based on Consumer Price Index (CPI) eased marginally to 3.15% in the month of July 2019, on the back of softening fuel and light prices, even as inflation in the overall food basket moved up. CPI was 3.18% in June 2019, while it stood at 4.17% in July 2018. Also, inflation stayed below the RBI’s medium-term target of 4% for an eleventh straight month. Some support also came with report that the slowdown-hit economy may soon get a booster dose from the government with Finance Ministry working on a stimulus package for the industry may include a slew of financial measures ranging from tax cuts, subsidies and other incentives. Investors took note of a report that the finance ministry may soon consult the law ministry on how best to provide relief to foreign portfolio investors (FPIs) from the super-rich surcharge that was announced in the July 5 budget.

Global cues also remained supportive with all the Asian markets trading in green after Washington delayed tariffs on some Chinese imports and gave much-needed relief for markets gripped by political and economic turmoil. The tariff news largely offset a raft of disappointing China data for July. The yen rose on the news about weak China's industrial production and other data.

Back home, on the sectoral front, the housing finance companies (HFCs) stocks were buzzing with the Reserve Bank of India’s (RBI) statement that HFCs will be treated as one of the categories of NBFCs for regulatory purposes and it will come under its direct oversight. In scrip specific development, Sobha surged on launching tallest residential building project in Gujarat. Dr Lal Pathlabs zoomed on reporting 19% rise in Q1 consolidated net profit at Rs 59.10 crore as compared to Rs 49.70 crore for the same quarter in the previous year. Total income of the company increased by 15.88% at Rs 349.60 crore for Q1FY20 as compared Rs 301.70 crore for the corresponding quarter previous year.

The BSE Sensex is currently trading at 37063.62, up by 105.46 points or 0.29% after trading in a range of 37000.77 and 37250.07. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained by 0.38%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Metal up by 1.70%, Basic Materials up by 1.29%, Oil & Gas up by 0.97%, Energy up by 0.95% and Realty was up by 0.85%, while Healthcare down by 1.57%, Power down by 0.38%, IT down by 0.35%, Auto down by 0.23% and TECK was down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.53%, Vedanta up by 2.75%, Hero MotoCorp up by 1.71%, Indusind Bank up by 1.65% and Bajaj Finance up by 1.65%. On the flip side, Sun Pharma down by 4.24%, Power Grid Corporation down by 1.61%, Maruti Suzuki down by 1.38%, HCL Technologies down by 1.30% and TCS down by 1.21% were the top losers.

Meanwhile, snapping five-month rising trend, India’s retail inflation based on Consumer Price Index (CPI) eased marginally to 3.15% in the month of July 2019, on the back of softening fuel and light prices, even as inflation in the overall food basket moved up. CPI was 3.18% in June 2019, while it stood at 4.17% in July 2018. Also, inflation stayed below the RBI’s medium-term target of 4% for an eleventh straight month. The overall food inflation, measured on consumer food price index (CFPI) moved up to 2.36% in July from 2.25% in June 2019 and 1.30% in July 2018.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base 2012=100 for July 2019, stood at 2.19%, 4.22% and 3.15%, respectively, compared to 4.11%, 4.32% and 4.17%, respectively in July 2018. The index value of CPI for combined stood at 144.2. The data also showed that CFPI for all India Rural and Urban for July 2019 stood at 0.57% and 5.61%, respectively, compared to 2.18% and -0.36%, respectively in July 2018. The index value of CFPI for combined stood at 143.4 for the month of July.

The rate of price rise in vegetables softened to 2.82% during the latest month as against a rise of 4.66% in June, while prices of 'pulses and products' went up to 6.82% from 5.68%. In case of fruits, the price trend showed upside movement with an inflation print of (-) 0.86% as against (-) 4.18% a month earlier. Prices of protein-rich 'meat and fish' rose at nearly the same level at 9.05% from 9.01% in June, however, inflation in eggs eased to 0.57% against 1.62%. In fuel and light category, deflation was witnessed with a print at (-) 0.36%, as against a rise of 2.32% a month ago.

The CNX Nifty is currently trading at 10957.70, up by 31.85 points or 0.29% after trading in a range of 10935.60 and 11003.75. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.46%, Zee Entertainment up by 3.15%, Indiabulls Housing Finance up by 3.04%, Vedanta up by 2.83% and GAIL India up by 2.82%. On the flip side, Dr. Reddys Lab down by 5.47%, Sun Pharma down by 4.66%, Wipro down by 2.11%, Power Grid Corporation down by 1.61% and Cipla down by 1.53% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 194.41 points or 0.95% to 20,649.85, Straits Times gained 7.00 points or 0.22% to 3,153.73, Hang Seng soared 135.33 points or 0.54% to 25,416.63, Taiwan Weighted strengthened 100.84 points or 0.97% to 10,463.50, Kospi advanced 13.75 points or 0.71% to 1,939.58, Jakarta Composite soared 38.75 points or 062% to 6,249.71 and Shanghai Composite was up by 21.79 points or 0.78% to 2,819.05.