Domestic benchmarks trade flat in early deals

Indian equity indices, after a positive start, have pared most of their gains to trade flat but are managing to keep their head above water. Sentiments remained up-beat after Prime Minister Manmohan Singh, in a high-level committee meeting, stated that sustained growth in manufacturing was critical if the country had to grow at 8-9 per cent. In the meeting it was decided that more domestic manufacturing capabilities would be created. However, the gains remained capped as investors turned cautious on report that the International Monetary Fund (IMF) has cut India’s growth outlook for 2013-14 to 5.6 percent from the 5.8 percent it projected in April. Sentiments were also weighed down as Indian rupee once again started depreciating after increasing 13 paise to 60.01 against the US dollar in early trade at the Interbank Foreign Exchange market after the RBI took steps to curb volatility in the currency.

Supportive cues from US markets provided some support to local markets in early deals. Investors’ morale got buttressed by an upbeat start of the earnings season with Alcoa reporting a better than expected second quarter numbers. However, Asian markets after a firm start have came off their high point after data indicated that Chinese exports declined for the first time since January 2012, raising worries about country’s slowing down economy. Back home, sentiments also got some support with report that foreign institutional investors (FIIs) bought shares worth Rs 165.6 crore while domestic institutional investors too were net buyers worth Rs 37.83 crore on July 9, 2013.

On the sectoral front, consumer durables witnessed the maximum gain in trade followed by banking and software, while metal, fast moving consumer goods and oil and gas remained the top losers on the BSE sectoral space. The broader indices were trading slightly in the green in early deals, while the market breadth on the BSE was positive; there were 686 shares on the gaining side against 447 shares on the losing side while 54 shares remain unchanged.

The BSE Sensex opened at 19482.66; about 43 points higher compared to its previous closing of 19439.48, and has touched a high and a low of 19505.93 and 19423.34 respectively.

The index is currently trading at 19451.10, up by 11.62 points or 0.06%. There were 15 stocks advancing against 15 declines on the index.

The overall market breadth has made a strong start with 57.79% stocks advancing against 37.66% declines. The broader indices too were trading in green; the BSE Mid cap up by 0.28% and Small cap indices up by 0.39%. 

The top gaining sectoral indices on the BSE were, Consumer Durables up by 1.24%, Bankex up by 0.63%, IT up by 0.63%, Teck up by 0.41% and Power up by 0.25%, while Metal down by 0.49%, FMCG down by 0.21%, Oil & Gas down by 0.17% and Auto down by 0.05% were the top losers on the sectoral index.

The top gainers on the Sensex were Cipla up by 1.09%, Tata Power up by 0.99%,  SBI up by 0.95%, Wipro up by 0.78% and Mahindra & Mahindra up by 0.70%.  On the flip side, Tata Steel was down by 1.47%,  Hindustan Unilever was down by 0.97%, Sun Pharma was down by 0.93%, Jindal Steel was down by 0.85% and Tata Motors was down by 0.81% were the top losers on the Sensex.

Meanwhile, amid the talk of government increasing import duty on pulses and Commission for Agriculture Costs and Prices (CACP) suggesting 10% import duty hike on pulse import to boost domestic production, the Food Ministry has favoured a 7.5% import duty on pulses. The pulses imports have been permitted at zero import duty since 2006. CACP, which recommends support price for agriculture commodities, had recommended 10% import duty on pulses in its report on kharif 2013-14 crops.

The government is of the view that import duty hike is necessary at this point to protect the domestic production because imported pulses have become cheaper compared to domestic pulses, especially after the hike in the minimum support price (MSP). As per the industry data, traders are now importing tur pulse at Rs 3,300-3,500 per quintal from Myanmar, while domestic prices are ruling at Rs 4,300 per quintal. 

Although India is the largest producer of pulses but it imports about three million tonnes of pulses every year to fulfill its domestic demand. In last few years, the government has made progress in increasing the pulses production through higher MSP, which boosts confidence of Indian farmers to produce more pulses.

The CNX Nifty opened at 5,869.90; about 10 points higher as compared to its previous closing of 5,859.00, and has touched a high and a low of 5,879.35 and 5,854.75 respectively.

The index is currently trading at 5,864.05, up by 5.05 points or 0.09%. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were JP Associate up by 1.79%, Kotak Bank up by 1.47%, IndusInd Bank up by 1.40%, IDFC up by 1.29% and Asian Paint up by 1.20%.

On the flip side, Tata Steel down by 1.72%, Cairn down by 1.09%, BPCL down by 0.98%, Sun Pharmaceuticals down by 0.97% and Hindustan Unilever down by 0.93% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 12.87 points or 0.57% to 2,288.53, Hang Seng increased 89.24 points or 0.43% to 20,772.25, Jakarta Composite added 33.69 points or 0.66% to 5,155.09, Nikkei 225 strengthened 128.47 points or 0.89% to 14,612.45 and KOSPI Composite was up by 4.26 points or 0.22% to 1,973.45.

On the flip side, KLSE Composite declined 10.82 points or 0.61% to 1,773.06, Straits Times dropped 61.20 points or 1.77% to 3,393.17 and Taiwan Weighted was down by 28.05 points or 0.34% to 8,209.78.