Firm trade continues over Dalal Street

Firm trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading notably higher, aided by positive cues from other Asian markets along with buying at Auto and Industrials counters. Traders remained positive, amid SBI Research said in a report that the Reserve Bank of India (RBI) is expected to again pause the repo rate, the rate at which the central bank lends money to banks, in its bi-monthly monetary policy to be held this week. Adding more comfort among traders, newly elected CII President R Dinesh said that private sector investment is set to witness a significant increase, as capacity utilisation in several key sectors has already crossed 80 per cent and economic growth is estimated to be 6.7 per cent in the current financial year. 

On the global front, Asian markets were trading mostly in green, after the services sector in China continued to expand in May, and at a faster rate, with a services PMI score of 57.1. That's up from 56.4 and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex is currently trading at 62869.95, up by 322.84 points or 0.52% after trading in a range of 62751.72 and 62943.20. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.45%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Auto up by 1.32%, Industrials up by 1.24%, Capital Goods up by 1.24%, Utilities up by 1.09% and Power up by 0.73%, while FMCG down by 0.15%, Realty down by 0.03% and Telecom down by 0.02% were the few losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.20%, Axis Bank up by 2.38%, Tata Motors up by 2.20%, Sun Pharma up by 1.48% and Maruti Suzuki up by 1.32%. On the flip side, Tech Mahindra down by 1.06%, Asian Paints down by 0.82%, Hindustan Unilever down by 0.76%, Nestle down by 0.53% and Titan Company down by 0.43% were the top losers.

Meanwhile, India’s services sector output increased at second-fastest pace in close to 13 years in the month of May, supported by sustained growth of new business in the face of positive demand trends, despite falling from April reading. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index stood at 61.2 in May from 62.0 in April. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- stood at 61.6 in May, remaining unchanged from April reading. 

The survey report further noted that demand strength underpinned another monthly increase in new business at service providers. The rate of expansion softened from April's near 13-year high, but was among the strongest over this period. Beside, external demand for Indian services continued to improve in May, highlighted by a fourth successive rise in new export business. Moreover, the pace of expansion was solid and the quickest in the calendar year-to-date.

On the inflation front, input prices rose at a marked rate that was the fastest since last December and above its long-run average, on the back of higher food, input, transportation and wage costs in May. Amid rising cost burdens, firms charged more for their services in May. Having quickened to the joint-strongest in close to six years, the rate of charge inflation was solid.

Meanwhile, services companies maintained an upbeat view that business activity would increase over the coming 12 months. Advertising, demand strength and favourable market conditions were among the reasons cited for optimistic forecasts. However, the overall level of confidence fell slightly from April, amid some concerns around competitive pressures.

The CNX Nifty is currently trading at 18619.95, up by 85.85 points or 0.46% after trading in a range of 18582.80 and 18640.15. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.22%, Axis Bank up by 2.45%, Tata Motors up by 2.09%, Grasim Industries up by 1.60% and Sun Pharma up by 1.50%. On the flip side, Divi's Laboratories down by 1.13%, Tech Mahindra down by 1.04%, Asian Paints down by 1.02%, BPCL down by 0.82% and Nestle down by 0.76% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 693.21 points or 2.15% to 32,217.43, Hang Seng advanced 140.2 points or 0.73% to 19,090.14, Straits Times rose 19.38 points or 0.61% to 3,185.68, KOSPI increased 14.05 points or 0.54% to 2,615.41, Taiwan Weighted added 7.52 points or 0.04% to 16,714.43 and Shanghai Composite strengthened 3.73 points or 0.12% to 3,233.80, while Jakarta Composite was down by 4.54 points or 0.07% to 6,628.72.