Benchmarks trade firm tracking strong Asian counterparts

The Indian equity markets are trading firm after making a positive start tracking positive cues from Asian equity indices. All the Asian markets barring KLSE Composite were trading in the positive terrain at this point of time on the back of stronger-than-expected Chinese Q2 GDP growth. Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE's -- Sensex -- and NSE's -- Nifty -- to trade comfortably over their crucial 18,500 and 5,550 mark respectively. On the sectoral front, realty witnessed the maximum gain in trade followed by consumer durables and healthcare, while there were no losers on the BSE sectoral space. Meanwhile, PSU oil marketing companies viz; Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation all were trading with a gain of over half a percent on the back of further decline in global crude prices. The broader indices were outperforming benchmarks. The market breadth on the BSE was positive; there were 1,275 shares on the gaining side against 416 shares on the losing side while 62 shares remained unchanged.

The BSE Sensex opened at 18,468.82; about 57 points higher compared to its previous closing of 18,411.62, and has touched a high and a low of 18,577.67 and 18,465.40 respectively.

The index is currently trading at 18,546.68, up by 135.06 points or 0.73%. There were 27 stocks advancing against just 3 declines on the index.

The overall market breadth has made a strong start with 72.73% stocks advancing against 23.73% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.91% and 0.83% respectively.

The top gaining sectoral indices on the BSE were, Realty up by 1.47%, CD up by 1.47%, HC up by 1.24%, Metal up by 1.05% and Auto was up by 1.03%. While, there were no losers on the index.

The top gainers on the Sensex were DLF up by 2.06%, Jaiprakash Associates up by 1.58%, M&M up by 1.32%, Sterlite Industries up by 1.29% and Tata Motors was up by 1.28%.

On the flip side, Wipro was down by 0.42%, Infosys was down by 0.33% and HUL was down by 0.17% were the only losers on the Sensex.

Meanwhile, worried over the decline in foreign direct investment and moderating industrial output, Commerce and Industry Minister Anand Sharma has called a meeting with industry chambers on July 13 and the day after to review the hurdles faced by industry. Anand Sharma, who was given the additional responsibility of the textiles portfolio in the Cabinet reshuffle, will meet leaders from FICCI on July 13 and the CII on July 14 respectively.

During these meetings, Anand Sharma is expected to discuss matters related to foreign direct investment inflows, manufacturing and other industry related concerns. FDI inflow has been reducing from last two financial years, during 2010-11 it reduced by 25% to 19.42 billion to 25.83 billion and in 2009-10 it reduced by 5% to 25.83 billion from 27.33 in 2008-09.  India was the only major country in South Asia which registered a fall in FDI inflows during 2010. IIP in April-May this year averaged 5.7%, compared to 10.8% in the same month of previous year.

The manufacturing sector, which accounts for over 75% of the total weight of the Index of Industrial Production (IIP), grew by just 5.6% in May, 2011, as against 8.9% in the same month of 2010, mainly on account of the poor performance of the manufacturing sector. Factory output in April, as measured by the IIP, has also been revised downward to 5.7% from the earlier estimate of 6.3%, as per the new series with a base year of 2004-05. Industrial growth in April-May this year averaged 5.7%, compared to 10.8% in the same period last year.

The core eight infrastructure industries also saw slowdown in growth for the May, it stood at 5.3% from 7.3% same month of last year. The increasing interest rates, high global commodity prices and high inflation have started to show its negative effects on industrial growth. The sales of passengers' cars in month of June reduced to 1.62%, which is slowest in last 27 months. Reserve Bank of India has increased its policy rates by 2.5% or 250 basis points in the last 16 months to curb the inflation.

The S&P CNX Nifty opened at 5,542.05; about 16 points higher compared to its previous closing of 5,526.15, and has touched a high and a low of 5,578.90 and 5,541.40 respectively.

The index is currently trading at 5,570.35, higher by 44.20 points or 0.80%. There were 47 stocks advancing against just 3 declines on the index.

The top gainers of the Nifty were Dr Reddy up by 3.70%, DLF up by 2.04%, IDFC up by 1.88%, Jaiprakash Associates up by 1.52% and SAIL up by 1.39%.

On the flip side, Wipro down by 0.49%, HUL down by 0.35% and Infosys down by 0.19%, were the only losers on the index.

All the Asian equity indices barring KLSE Composite were trading in the green; Shanghai Composite was up 33.14 points or 1.20% to 2,787.72, Hang Seng was up 205.65 points or 0.95% to 21,868.81, Jakarta Composite was up 27.02 points or 0.69% to 3,965.04, Nikkei 225 was up 39.55 points or 0.40% to 9,965.47, Straits Times was up 9.61 points or 0.31% to 3,086.97, Seoul Composite was up 15.76 points or 0.75% to 2,125.49 and Taiwan Weighted was up by 24.93 points or 0.29% to 8,515.94.

On the flip side, KLSE Composite was down by 1.73 points or 0.11% to 1,576.37. 

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