Markets hold gains amid lackluster trade

Following a positive trade and subsequent retreat, Indian equity markets again moved up in positive territory amid alternate bouts of buying and selling. The Sensex was up by 25.81 points, while the Nifty index of the National Stock Exchange was up by 5.50 points. Investors were trading cautiously and waiting for some major trigger. Market sentiments were also improved following comments from Chief Economic Adviser Raghuram Rajan, that all options were being considered to fund the country's record-high current account deficit and policy measures were geared to stabilize a weak rupee in a way that only does minimal damage to growth. In currency market, rupee bounced back to the 58 level against the dollar amid increased selling of the US currency by exporters and banks. On the sectoral front, bank and metal stocks declined sharply after a fairly steady start. Stocks from FMCG and PSU sectors were also trading weak, while capital goods, consumer durables, healthcare, information technology and oil stocks were finding some support. However, public sector lender Punjab National Bank disappointed the street with the non-performing asset rising further during April-June quarter, though the net profit increased higher-than-expected 2.3% year-on-year to Rs 1,275 crore.

On the global front, Asian markets were mixed on Friday as Japanese market declined sharply ahead of the US Federal Reserve's policy meeting next week. The Fed's two day Federal Open Market Committee meeting, beginning 30 July, could provide more clarity on the future pace of US monetary stimulus. Back home, the market breadth was favoring the negative trend; there were 798 shares on the losing side against 1039 shares on the gaining side, while 121 shares remained unchanged.

The BSE Sensex is currently trading at 19,830.57, up by 25.81 points or 0.13% after trading in a range of 19,907.45 and 19,774.58. There were 13 stocks advancing against 17 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.33% and Small cap index fell by 0.20%.

The top gaining sectoral indices on the BSE were, Capital Goods up by 0.57%, Health Care up by 0.57%, Oil & Gas up by 0.55%, IT up by 0.50% and FMCG up by 0.34%, while Metal down by 1.42%, Bankex down by 1.21%, PSU down by 1.15%, Power down by 0.21% and Realty down by 0.05% were the top losers on the BSE.

The top gainers on the Sensex were Sun Pharma up by 2.57%, Hero MotoCorp up by 2.02%, ITC up by 1.91%, Mahindra & Mahindra up by 1.45% and L&T up by 1.21%. On the flip side, Coal India  was down by 3.89%, Hindalco was down by 2.94%, Maruti Suzuki was down by 2.70% , Hindustan Unilever was down by 2.11% and  SBI was down by 1.78% were the top losers on the Sensex.

Meanwhile, faced with a sharp decline in shipments due to a global demand slowdown, engineering exporters have decided to approach the Prime Minister's Council on Trade and Industry for reintroduction of tax exemption on export income to boost competitiveness of Indian shipments in global markets.

The Engineering Export Promotional Council (EEPC’s) chairman Aman Chadha has urged these exemptions to be considered seriously, if the government wishes Indian engineering exports to compete against Chinese manufacturers in the world market.

The council feels that it would be difficult for the Indian engineering export sector to meet the export target of over $ 61 billion in the current fiscal, with the US and European markets not recovering to the desired level. Engineering exports shrink by 7.53% in the Q1FY14 despite currency depreciation as the advantage was offset by the rising cost of production due to currency volatility.

The CNX Nifty is currently trading at 5,913.00 up by 5.50 points or 0.09% after trading in a range of 5,944.50 and 5,897.80. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were Sun Pharmaceuticals up by 2.49%, Ambuja Cements up by 2.34%, Hero MotoCorp up by 2.13%, ITC up by 1.89% and HCL Tech up by 1.65%. On the flip side, JP Associates down by 4.07%, Coal India down by 4.01%, PNB down by 3.56%, Hindalco down by 3.13%, and IndusInd Bank down by 2.65% were the major losers on the index.

Asian equity indices were trading mixed; Shanghai Composite declined 0.27%, Jakarta Composite slipped 0.08%, Nikkei 225 tumbled 2.97% and Taiwan Weighted was down by 0.17%.

On the flip side, Hang Seng rose 0.09%, KLSE Composite increased 0.06%, KOSPI Composite Index up by 0.06% and Straits Times added 0.24 %.