Benchmarks remain rangebound with positive bias, broader markets outperform

Volatility ruled the roost in morning trade as the benchmarks regained positive zone after hitting intraday low. Markets traded with a positive bias amid hopes that the government may soon unveil fresh measures to curb rupee slide. The rupee and bonds weakened on Wednesday as the government’s increase in gold and silver import duties announced a day earlier were not seen as enough to prevent the domestic currency from sliding towards record lows. Investors are also on hold for wholesale price inflation data due later in the day, which is expected to pick up slightly to an annual 5 percent in July. The partially convertible rupee was trading at 61.41/42 per versus its close of 61.19/20 on Tuesday and near a record low of 61.80 hit earlier this month. The benchmark 10-year bond yield was trading up 6 basis points at 8.46 percent. Meanwhile, exchange data showed that foreign institutional investors bought Rs 2.27 billion of cash shares on Tuesday, while domestic institutions were net buyers of Rs 1.15 billion of shares. On the global front, Asian equity indices are exhibiting mixed trend. Bonds fell in Asia after the 30-year Treasury yield approached a two-year high on signs of faster US growth. 

Back home, traders were buying Metal, Auto and Consumer Durables stocks, while selling was seen in FMCG and Capital Goods on the BSE. Oil marketing companies Stocks such as BPCL and IOC edged higher after international crude started showing some decline. Meanwhile, the NSE Nifty and BSE Sensex were trading near the psychological 5,700 and 19,200 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in the ratio of 1089:561.The BSE Sensex is currently trading at 19282.83, up by 52.99 points or 0.28% after trading in a range of 19313.98 and 19203.63. There were 21 stocks advancing against 9 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.70% and Small cap index gained 0.71%.

The top gaining sectoral indices on the BSE were, Metal up by 2.86%, Auto up by 2.17%, Consumer Durables up by 1.43%, PSU up by 1.24% and Realty up by 1.22%, while FMCG down by 0.67% and Capital Goods down by 0.44% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Motors up by 5.74%, Tata Steel up by 5.74%, Hindalco Inds up by 3.44%, Sterlite Inds up by 2.71% and TCS up by 2.01%.  On the flip side, HDFC Bank was down by 1.29%, HDFC was down by 1.17%, ITC was down by 1.17%, Hindustan Unilever was down by 1.10%  and Dr Reddys Lab was down by 1.02% were the top losers on the Sensex.

Meanwhile, a move to plug shortage of currency in circulation, the Reserve Bank of India (RBI) has come out with an incentive scheme for banks to ensure distribution of notes and coins to the public. The Apex Bank, taking into consideration recent developments in the area of exchange and distribution of bank notes and coins to the public, has reviewed the existing scheme of incentives and penalties.

As per the incentive scheme, banks would get Rs 2 against earlier provision of Re 1 per packet for exchange of soiled notes in denominations up to Rs 50. The incentive would be Rs 25 per bag for distribution of coins over the counters. This incentive would be paid on the basis of net-withdrawal from currency chest, without waiting for claims from banks. However, penalty on account of detection of counterfeit notes by the apex bank from soiled note remittance of banks and in currency chest balances will be three times the notional value of counterfeit notes.

Besides, RBI also has ordered banks to put in place a system of checks and balances, to ensure that coins are distributed to retail customers in small lots and not to bulk. Further more, the apex bank would reimburse 50% of capital expenditure in case of urban/metro centres and 75% of capital expenditure for rural and semi urban centres.

The CNX Nifty is currently trading at 5,716.30 up by 17.00 points or 0.30% after trading in a range of 5,723.30 and 5,690.20. There were 36 stocks advancing against 13 declines while 1 stock remains unchanged on the index. 

The top gainers of the Nifty were Tata Steel up by 5.82%, Tata Motors up by 5.48%, BPCL up by 4.14% , Hindalco Industries up by 3.34%, and NMDC up by 3.07%. On the flip side, HDFC down by 1.27%, HDFC Bank down by 1.23%, ITC down by 1.18%, Hindustan Unilever down by 1.17%, and Dr. Reddy's Laboratories down by 0.97% 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, Nikkei 225 up by 57.87 points or 0.42% to 13,941.50, and Seoul Composite was up 7.62 points or 0.38% to 1,920.23.

On the flip side, KLSE Composite slipped 2.31 points or 0.13% to 1,793.44, Straits Times decreased 4.57 points or 0.14% to 3,239.55 and Taiwan Weighted was down by 34.02 points or 0.43% to 7,952.25.