Benchmarks trade slightly higher in early deals

Extending their 3-day winning streak, Indian equity benchmarks are trading slightly in the green in Wednesday’s morning deals amid hopes that the government may soon unveil fresh measures to curb rupee’s slide. Sentiments also got some support from report that foreign institutional investors (FII) bought Rs 2.27 billion of cash shares on August 13, while domestic institutions were net buyers of Rs 1.15 billion of shares. Buying in oil marketing companies too aided the sentiments. Stocks of BPCL and IOC edged higher after international crude started showing some decline after surging in last three sessions. However, gains remained capped as investors remained cautious on continuous decline in Indian rupee, which fell to 61.36 against the dollar in early trade against the previous close of 61.28 at the Interbank Foreign Exchange market.

On the global front, the US markets ended modestly higher after rebounding from their early lows. While, Asian equity indices were exhibiting mixed trend at this point of time with Japanese Nikkei trading lower by over half a percent as futures selling erased early-session gains triggered by positive economic data from Europe and the United States and a weaker yen. However, some support came in from good economic data, bolstering the global outlook.

Back home, Financial Technologies tumbled nearly 35% in early morning deals on BSE, on reports that a top stockbrokers threatened to seek legal recourse if the National Spot Exchange (NSEL) was unable to repay its dues to the brokers and investors. Back home, on the sectoral front, metal witnessed the maximum gain in trade followed by auto and consumer durables, while fast moving consumer goods, capital goods and power remained the few losers on the BSE sectoral space. The broader indices were outperforming benchmarks, while the market breadth on the BSE was positive; there were 779 shares on the gaining side against 413 shares on the losing side while 55 shares remain unchanged.

The BSE Sensex opened at 19299.42; about 69 points higher compared to its previous closing of 19,229.84, and has touched a high and a low of 19,313.98 and 19,203.63 respectively.

The index is currently trading at 19,248.37, up by 18.53 points or 0.10%. There were 18 stocks advancing against 12 declines on the index.

The overall market breadth has made a strong start with 62.17% stocks advancing against 33.68% declines. The broader indices were trading in green; the BSE Mid cap up by 0.49% and Small cap indices up by 0.49%. 

The top gaining sectoral indices on the BSE were, Metal up by 2.55%, Auto up by 1.73%, Consumer Durables up by 1.24%, Realty up by 0.88% and PSU up by 0.83%, while FMCG down by 0.66%, Capital Goods down by 0.45% and Power down by 0.04% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 5.41%, Tata Motors up by 4.65%, Hindalco Inds up by 3.72%, Sterlite Inds up by 2.14% and Bajaj Auto up by 1.88%.  On the flip side, HDFC was down by 1.62%,  ITC  was down by 1.27%, Dr Reddys Lab  was down by 1.12%, BHEL was down by 1.08% and HDFC Bank was down by 1.08% were the top losers on the Sensex.

Meanwhile, Outgoing Reserve Bank of India (RBI) Governor D Subbarao, who earlier has opposed bankers' call to further trim the Cash Reserve Ratio (CRR) or pay interest on these deposits, and cut Statutory Liquidity Ratio (SLR), now acknowledging the need of demand has said ‘perhaps’, there is a need to reduce these rates.

However, quickly to its defense, the governor, added “RBI has ‘progressively’ brought down mandatory ratios on both CRR, or the portion of deposits banks park with RBI as a solvency buffer, and SLR, another solvency tool under, which banks have to subscribe to government bonds and other liquid assets, over the years”.

CRR, the amount of cash lenders must deposit with the RBI, currently stands at a record low of 4%, while SLR, which includes securities such as government bonds, stands at 23%.

RBI in a bid to curb the depreciation of rupee, has recently tightened monetary conditions by raising short-term interest rates and draining cash, but the currency has weakened nonetheless, sparking concerns the central bank would need to either raise the CRR or raise the key repo rate.

The CNX Nifty opened at 5,715.40; about 16 points lower as compared to its previous closing of 5,699.30, and has touched a high and a low of 5,723.25 and 5,690.20 respectively.

The index is currently trading at 5,711.70, up by 12.40 points or 0.22%. There were 34 stocks advancing against 16 declines on the index.

The top gainers of the Nifty were Tata Steel up by 5.16%, Tata Motors up by 4.74%, Hindalco Industries up by 3.99%, BPCL up by 3.93% and JP Associate up by 2.28%. On the flip side, HDFC down by 1.57%, ITC down by 1.30%, Hindustan Unilever down by 1.18%, HDFC Bank down by 1.11% and Dr. Reddy's Laboratories down by 1.10% were the major losers on the index.

The Asian equity indices were trading mixed; Shanghai Composite rose 1.53 points or 0.07% to 2,107.69, Jakarta Composite strengthened 23.94 points or 0.51% to 4,676.34 and Seoul Composite was up 4.34 points or 0.23% to 1,917.37.

On the flip side, KLSE Composite slipped 1.65 points or 0.09% to 1,793.44, Nikkei 225 declined 79.97 points or 0.58% to 13,787.03, Straits Times decreased 4.57 points or 0.14% to 3,239.55 and Taiwan Weighted was down by 50.50 points or 0.63% to 7,935.77.