Indian markets lose opening gains

After a gap-up opening, Indian equity benchmarks failed to hold the gaining momentum and are trading mixed in the Monday’s early deals. Initially, frontline gauges kick-started the trade on a jubilant note with strengthening rupee against the US dollar on hopes of government action to stem its decline. Some support also came in from firm trade in Asian counters as sentiments remained buoyed by positive economic data out of China late last week. China reported industrial growth for July reached a five-month high, easing fears that the world’s second largest economy was heading towards a slowdown. Though, The US markets ended lower in the last session as the traders remained on sidelines ahead of a data heavy week and there was concern about the Fed’s stimulus tapering.

Back home, the sentiments turned choppy on report that foreign institutional investors (FIIs) sold shares worth a net Rs 395.78 crore on August 8, 2013. Investors remained cautious in taking positions in risky assets ahead of the IIP data to be announced later in the day, Industrial output, as measured by the Index of Industrial Production, was seen contracting 1.1% in June. Meanwhile, stocks related to banking segment were mostly lower after the Reserve Bank of India (RBI) on August 8, 2013, announced fresh steps to drain cash from the banking system, as it stepped up efforts to stop the rupee’s decline against the dollar.

On the sectoral front, healthcare witnessed the maximum gain in trade followed by metal and consumer durables, while banking, power and oil and gas remained the top losers on the BSE sectoral space. The broader indices too trading higher in the early deals, while the market breadth on the BSE was positive; there were 769 shares on the gaining side against 408 shares on the losing side while 48 shares remain unchanged.

The broader indices were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 765 shares on the gaining side against 418 shares on the losing side while 52 shares remain unchanged.

The BSE Sensex opened at 18898.94; about 109 points higher compared to its previous closing of 18789.34, and has touched a high and a low of 18951.99 and 18796.01 respectively.

The index is currently trading at 18815.23, up by 25.89 points or 0.14%. There were 16 stocks advancing against 14 declines on the index.

The overall market breadth has made a strong start with 62.28% stocks advancing against 33.58% declines. The broader indices were trading in green; the BSE Mid cap up by 0.29% and Small cap indices up by 0.70%. 

The top gaining sectoral indices on the BSE were, Health Care up by 2.34%, Metal up by 1.22%, Consumer Durables up by 1.16%, Realty up by 0.70% and FMCG up by 0.65%, while Bankex down by 1.31%, Power down by 1.05%, Oil & Gas down by 0.79%, PSU down by 0.54% and Capital Goods down by 0.02% were the top loser on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 7.18%, Cipla up by 3.85%, Tata Steel up by 2.88%, Hero MotoCorp up by 1.86% and Jindal Steel up by 1.64%.  On the flip side, SBI was down by 3.40%,  BHEL was down by 2.21%, Dr Reddys Lab was down by 2.00%, NTPC was down by 1.75% and Tata Power was down by 1.74% were the top losers on the Sensex.

Meanwhile, the government has revised upward the textiles export target to $43 billion for the current fiscal, from $36 billion set earlier. Minister of State for Textiles Panabaaka Lakshmi said that following discussions with textiles export promotion councils against the backdrop of rupee depreciation and after considering strong industry performance, the government has decided to raise the textile exports target to $43 billion for FY14. In the previous fiscal, domestic textile exports stood at $34 billion.

Meanwhile, Indian textile exports' growth remained flat to $7.79 billion in the first quarter  of this fiscal from $7.76 billion in the same period of the 2012-13 mainly due to the weak demand in global markets like the US  and Europe. However, it seems difficult for the government to achieve set exports target on account of prevailing slowdown in major markets include the US and Europe, which represents around 65 percent share in the country's total textiles exports. Exporters are now exploring new markets like Latin America, Africa, Australia, Japan, Israel, South East Asia and Middle East countries to reduce dependence on western markets.

Meanwhile, the government has taken various steps to boost textiles exports including providing three percent interest subvention, incremental export incentive scheme and inclusion of new markets like New Zealand, Latvia for textile exports under the focus market scheme. The government had earlier said that textiles sector is the only sector where we can increase the exports substantially, adding that industry issues will be addressed soon. The government had also expressed need to encourage skill development as adequate skill development will boost the production and turn down the cost of production, leading the textile sector to grow which in turn will help it to compete in the global market.

The CNX Nifty opened at 5,606.70; about 41 points higher as compared to its previous closing of 5,565.65, and has touched a high and a low of 5,610.6565 and 5,557.10respectively.

The index is currently trading at 5,563.55, down by 2.10 points or 0.04%. There were 21 stocks advancing against 28 declines, while one stock remains unchanged on the index.

The top gainers of the Nifty were Sun Pharmaceuticals up by 7.84%, Cipla up by 4.30%, Tata Steel up by 2.61%, NMDC up by 2.36% and Lupin up by 2.15%. On the flip side, PNB down by 3.61%, SBI down by 3.60%, IndusInd Bank down by 3.53%, Dr. Reddy's Laboratories down by 2.41% and Asian Paints down by 2.38% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite surged 26.99 points or 1.32% to 2,079.23, Hang Seng strengthened 363.16 points or 1.67% to 22,170.72, KLSE Composite rose 5.91 points or 0.33% to 1,785.23, Straits Times increased 7.48 points or 0.23% to 3,237.39, Seoul Composite added 6.45 points or 0.34% to 1,887.16 and Taiwan Weighted was up by 40.38 points or 0.51% to 7,896.52.

On the flip side, Jakarta Composite decreased 27.50 points or 0.59% to 4,613.28 and Nikkei 225 was up by 72.11 points or 0.53% to 13,543.08.