Firm trade persists on Dalal Street

Firm trade persisted over Dalal Street in late afternoon session, on the back of positive cues from European markets. In line with the larger peers, the broader markets were also holding their gains in late noon deals, while Tech Mahindra emerged as the top gainer among major industry leaders on the BSE.  Domestic sentiments were positive, as Agriculture Minister Narendra Singh Tomar said that the condition of Kharif (summer-sown) crops is good and the country is likely to have bumper production of foodgrains.

On the global front, European markets were trading in green, despite Germany's industrial production declined unexpectedly in July. The data from Destatis showed that industrial production fell 0.6 percent in July from June, confounding expectations for an increase of 0.3 percent. Nonetheless, the pace of decline slowed from the 1.1 percent fall posted in June. Asian markets were also trading in green.

Back home, sugar industry stocks were in watch, amid reports that sugar prices are expected to rise by 8 percent to Rs 33-34 per kg in sugar season (SS) 2020 following a decline in cane acreage in Maharashtra and parts of Karnataka due to extreme weather conditions.

The BSE Sensex is currently trading at 36956.08, up by 311.66 points or 0.85% after trading in a range of 36727.66 and 36993.05. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Auto up by 2.20%, Power up by 1.60%, Energy up by 1.49%, Bankex up by 1.34% and Utilities was up by 1.28%, while Realty down by 0.56% and FMCG was own by 0.20% were the only losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 3.78%, Axis Bank up by 3.17%, Maruti Suzuki up by 2.96%, Bajaj Auto up by 2.95% and Bajaj Finance was up by 2.39%. On the flip side, Yes Bank down by 2.67%, Sun Pharma down by 2.22%, HCL Tech down by 0.94%, TCS down by 0.74% and Hindustan Unilever was down by 0.73% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that India’s increased dependence on foreign portfolio investment (FPI) makes the country highly vulnerable to global shocks.

The report also highlighted that the surplus generated in the services trade combined with remittances is insufficient to cover India’s trade deficit. As a result, the country has been witnessing current account deficit (CAD). Even the net foreign direct investment (FDI) which is part of the capital account is insufficient to bridge the CAD.

As per the report, since the current account plus net FDI is negative, India is dependent on FPI, the other major component of capital account, to fund this gap. The current account plus net FDI has been positive for some of India’s peers such as China, Brazil and Russia.

The CNX Nifty is currently trading at 10931.55, up by 83.65 points or 0.77% after trading in a range of 10867.45 and 10946.70. There were 33 stocks advancing against 16 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Eicher Motors up by 4.18%, Tech Mahindra up by 3.76%, Maruti Suzuki up by 3.21%, Bajaj Auto up by 3.09% and Axis Bank was up by 3.05%. On the flip side, Indiabulls Housing Finance down by 4.63%, Yes Bank down by 2.91%, Sun Pharma down by 2.22%, Wipro down by 1.86% and JSW Steel was down by 1.16% were the top losers.

All Asian markets were trading in green; Nikkei 225 surged 113.63 points or 0.54% to 21,199.57, Taiwan Weighted strengthened 23.71 points or 0.22% to 10,780.64, Shanghai Composite gained 4.53 points or 0.15% to 2,990.39, Jakarta Composite soared 13.63 points or 0.22% to 6,320.43, KOSPI rose 4.38 points or 0.22% to 2,009.13, Straits Times advanced 6.02 points or 0.19% to 3,153.08 and Hang Seng was up by107.24 points or 0.4% to 26,622.77.

European markets were trading mostly in green; CAC rose 2.67 points or 0.05 % to 5,596.04 and DAX was up by 15.17 points or 0.13% to 12,141.95, while FTSE was down by 0.25 points to 7,270.92.