Benchmarks edge higher on sustained buying

Recovering from a listless start, Indian equity markets have edged higher in the late morning session on Monday amid sustained buying at several front line counters. In currency market, rupee recovered and was trading firm against greenback as investors expected inflows related to Diageo Plc's stake purchase in United Spirits, with the flow size at around $ 300 million. On sectoral front, auto stocks were muted in trade, amid lower than expected sales numbers, while many banking license hopefuls like IDFC, IFCI, L&T Finance, Muthoot were buzzing in trade as the deadline for submitting application draws to a close. Realty, capital goods and power stocks were holding early gains, while technology stocks were under pressure.

On the global front, Asian markets were trading lower, dragged down by chinese PMI which showed continued slowdown at 48.2 - the lowest reading in nine months. China's official PMI for june, at 50.1 was in line with expectations. However, Japans positive tankan which came out at its highest level in more than two years gave support to Nikkei. Back home, the market breadth was favoring positive trend; there were 1,224 shares on the gaining side against 641 shares on the losing side, while 115 shares remained unchanged.

The BSE Sensex is currently trading at 19,504.03, up by 108.22 points or 0.56% after trading in a range of 19,512.43 and 19,347.57. There were 24 stocks advancing against 6 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.38% and Small cap index was up by 1.47%.

The top gaining sectoral indices on the BSE were, Realty up by 4.14%, Capital Goods up by 2.28%, Power up by1.84%, Metal up by 1.26%, and Health Care up by 1.19%, while IT down by 1.33% and TECk down by 0.46% on the BSE.

The top gainers on the Sensex were L&T up by 2.70%, Jindal Steel up by 2.58%, BHEL up by 2.55%, Tata Power up by 2.32% and Dr Reddys Lab up by 2.10%.

On the flip side, TCS was down by 1.70%, Infosys was down by 1.33%, Bajaj Auto was down by 0.42%, ICICI Bank was down by 0.30% and ITC was down by 0.12% were the top losers on the Sensex.

Meanwhile, Indian factory activities remained weak in June as output contracted for the second consecutive month and order books contracted for the first time in over four years. However, consistent with a marginal expansion of the country’s manufacturing sector, the HSBC Purchasing Managers’ Index (PM) recorded above the no-change threshold for the fifty-first consecutive month in June, by coming at 50.3, slightly higher from 50.1 in May.

Although marginally, total new orders during June, fell for the first time since March 2009. A sub-index measuring overall new orders fell to 49.7, from 50.5 in May, below the watershed level for the first time since March 2009. However, the little expansion was witnessed on account of increased export order. In fact, export business rose at the sharpest rate since January as demand from key foreign clients strengthened.

Meanwhile, reduced output levels were recorded for the second month running in June, amid evidence of tougher economic conditions and persistent power cuts. The economy grew at its slowest pace in a decade in the fiscal year that ended in March and economic data since then has underwhelmed suggesting no relief from the current slowdown. On the price front, despite the moderate pace of growth, output prices picked up slightly and input prices rose more notably, partly in response to the depreciation of Rupee. Input cost inflation accelerated to the sharpest since February. The rate of charge inflation was, however, modest as competition for new work persisted and weighed on pricing power.

The only bright spot remained the fastest rate of employment since March. Amid reports of power, raw material and water shortages, backlogs of work were accumulated again in June, which subsequently led to manufacturers adding to their workforce numbers in June.

The CNX Nifty is currently trading at 5,874.00 up by 31.80 points or 0.54% after trading in a range of 5,875.05 and 5,822.20. There were 40 stocks advancing against 9 declines and one remained unchanged on the index.

The top gainers of the Nifty were Ranbaxy up by 4.16%, JP Associates up by 3.45%, Reliance Infra up by 3.24%, DLF up by 2.84% and Jindal Steel up by 2.64%.

On the flip side, TCS down by 1.72%, Infosys down by 1.58%, HCL Tech down by 1.09%, Bajaj-Auto down by 0.73% and M&M down by 0.44% were the major losers on the index.

Most of the Asian equity indices were trading in red; Jakarta Composite dropped 0.70%, KLSE Composite slipped 0.03%, Straits Times dipped 0.24%, KOSPI Composite contracted by 0.13% and Taiwan Weighted was down by 0.33%.

On the flip side, Shanghai Composite up by 0.01% and Nikkei 225 increased 1.15%.