Markets continue to trade in green in afternoon session

Indian equity benchmarks continue to trade firm in afternoon session on the back of buying witnessed in healthcare, IT and capital goods stocks. Gains in the frontline blue-chip stocks such as Tata Motors, Hindalco Inds and TCS among others also provided support to the markets. Sentiments got some support as foreign institutional investors (FIIs) bought shares worth a net Rs 511.15 crore in the previous session. On stock specific movements, Tata Motors, Hindalco Inds and TCS were trading up by over 2.90%, while, Maruti Suzuki, NTPC and HDFC Bank were trading down by over 1.40% on BSE. Dr. Reddy’s Laboratories, extending its previous day’s 2% gain, was trading over 2% at Rs 2,915 after the company launched Sumatriptan Injection USP in the US. Tata Motors has moved higher by 4% to its record high to Rs 416, amid reports that the country’s largest automobile company is exploring the possibility of setting up a manufacturing plant for Jaguar and Land Rover (JLR) in Saudi Arabia. On the other hand, Maruti Suzuki India has slipped over 4% to Rs 1,595 levels, after the company clarified regarding its board's decision on the proposed Gujarat project.

On global front, Asian equity indices were trading in red with Nikkei down by 0.55% and Seoul Composite down by 0.17% as investors adopted a cautious stance ahead of China's manufacturing PMI data. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,200 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,297 stocks traded, 1,224 stocks advanced, while 936 stocks declined on the BSE.

The BSE Sensex is currently trading at 21,087.37 up by 100.38 points or 0.48% after trading in a range of 21,120.25 and 20,989.66. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index up by 0.43%.

The gaining sectoral indices on the BSE were Healthcare up by 1.79%, Capital Goods up by 1.11%, IT up by 0.80%, Auto up by 0.72% and Teck up by 0.70%. While, Consumer Durables down by 0.36%, Power down by 0.15% and Oil and Gas down by 0.05% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Motors up by 4.13%, Hindalco Inds up by 3.81%, TCS up by 2.93%, Dr Reddy’s Lab up by 2.86% and Axis Bank up by 2.33%. On the flip side, Maruti Suzuki down by 4.95%, NTPC down by 1.73%, HDFC Bank down by 1.47%, HUL down by 1.04% and Hero MotoCorp down by 1.02%.

Meanwhile, the Reserve Bank of India (RBI) Governor Rahguram Rajan has attributed high food inflation to rising rural wages and administered food prices. Highlighting need for slower pace of increase in minimum support prices of foodgrains, the Governor emphasized that food prices should be determined by the market and MSPs (minimum support prices) should be used to provide only a lower level of support so that production decisions do not get distorted. During the last 10 years, MSPs of rice and wheat have increased more than 100 percent.

Referring to rising rural wages, the Governor has stressed that increased liquidity flow into rural areas on the back of centre's rural employment schemes particularly (MGNREGA) has also led to a massive rise in rural wages over the past few years and thus there is a need to contain any unwarranted rise in rural wages as well as rise in other agricultural input costs. Food prices in the country are also high owing to growing prosperity and shift in dietary habits of people towards protein-rich items and other high value foods, Governor added.

The RBI Governor further highlighted the need to amend the Agriculture Produce Marketing Committee (APMC) Act, which governs marketing of agriculture produce and provides a platform to farmers to sell their produce to agents or traders. Further, under Agriculture Produce Marketing Committee (APMC) Act, it has become imperative to reduce the wedge between what the farmer gets and what is paid by the household through reducing the role, number, and monopoly power of middlemen as well as by improving logistics. By adding further, Rahguram Rajan has stated that during the last decade, the share of food in households’ overall consumption has been declining, but at a slow pace than the significant relative increase in food prices, suggesting that demand is relatively less elastic to price changes.

The CNX Nifty is currently trading at 6,264.10 up by 25.30 points or 0.41% after trading in a range of 6,274.25 and 6,228.10. There were only 32 stocks advancing against 18 declining on the index.

The top gainers of the Nifty were Tata Motors up by 4.05%, Hindalco up by 3.96%, JP Associates up by 3.70%, TCS up by 3.06% and Dr Reddy’s Lab up by 2.62%. On the flip side, Maruti Suzuki down by 4.99%, NTPC down by 1.69%, HDFC Bank down by 1.52%, Power Grid down by 1.47% and Ranbaxy down by 1.29% were the major losers on the index.

The Asian equity indices were trading in red; Nikkei down by 0.55%, Seoul Composite down by 0.17%, Straits Times down by 0.09%, Shanghai Composite down by 0.90%, while, Jakarta Composite up by 0.60%, KLSE Composite was up by 0.14% and Hang Seng up by 0.02%.