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The markets are trading in a subdued manner this morning as they seek to consolidate the gains garnered in the previous trading session.
At 9.40am, the Sensex was at 28,014, lower by 8 points and the Nifty was at 8,451, down 2 points.
The broader markets continued their outperformance, with the midcap and smallcap indices registering gains of 0.5% each at 10,881 and 11,299 respectively.
The benchmark indices had rallied around 1% on Wednesdsay due to a mix of positive cues from the domestic and global front. The Sensex had gained about 240 points to reclaim the 28,000 mark and the Nifty had ended around the 8,450 mark.
Meanwhile, in heartening news on the primary market front, three companies --low-cost carrier IndiGo, staffing company Teamlease and e-retailer Infibeam--filed papers with Sebi to raise an estimated Rs 3,000 crore. Another three companies, including Cafe Coffee Day, Matrix Cellular and RBL Bank, had approached the regulator last week.
RUPEE
The rupee has slipped marginally to 63.63 a dollar in early trade compared to 63.61 a dollar in the previous session.
MARKETS & ECONOMY
The growth in eight core sectors increased to 4.4% in May versus a decline of 0.4% in the month of April. The growth was recorded after two consecutive months of decline, thus indicating a recovery in the industrial output. Some support also came after India Meteorological Department (IMD) reported better than normal monsoon figure in the month of June.
"The outlook for inflation has improved in recent weeks, thanks to the strong start to monsoon season. Rains have been 16% above normal in June, resulting in an improvement in sowing patterns for major crops (pulses and oilseeds). While authorities still warn of weak rainfall in July, a crucial month in the season, the good start has improved reservoir levels which are likely to aid agricultural production," said Pranjul Bhandari, chief India economist at HSBC.
"The fall in both PMI input prices and prices charged is a positive indication and coupled with the strong start to monsoons, should provide the RBI more comfort around its 6% CPI target of January 2016," he adds.
Analysts say that the recent rebound in markets despite global uncertainty clearly depicts participants giving more weightage to domestic cues as expected.
"It’s too early to say that the scenario would prevail if global volatility increases in days to come. Hence, we reiterate our advice to maintain positive yet cautious approach as Nifty has almost reached near to crucial hurdle of 8,500 mark and sustainability above the same will trigger fresh upside momentum, otherwise profit taking will resume," said Jayant Manglik, President, Retail Distribution, Religare Securities in a note.
GLOBAL MARKETS
Overnight, the US markets had ended higher on the back of better-than-expected economy data and hopes of a resolution between Greece and its creditors. European market had pared early gains, but had still gained 1-2% each on hopes about Greece debt resolution.
The Asian markets are trading with modest gains this morning. Nikkei is trading at one-week high owing to a weaker yen. Kospi index edged up to a one-month high, while Straits Times, Taiwan and Hang Seng indices are also marginally in the green this morning. The Shanghai index has, however shed around 2% in early trades.
SECTORS AND STOCKS
HDFC Bank, Tata Motors, Infosys and BHEL are the major Sensex stocks that are exerting pressure on the indices this morning.
The IT space is witnessing selling pressure, with Infosys shedding nearly 1%, and TCS, Wipro amd Tech Mahindra losingabout 0.5% each.
The banking sector is subdued post the gains witnessed in the previous session; Hdfc Bank, ICICI Bank and Kotak Mahindra Bank have edged into the red.
On the other hand, the metal pack has bounced back from 52-week lows, with Tata Steel and Hindalco gaining around 1% each.
The auto sector is also seeing selective buying interest post the auto sales numbers for June. Bajaj Auto, Hero Motocorp and M&M have gained 1-2% each. Hero MotoCorp clocked sales growth of 5-lakh plus units despite sluggish sentiments on the ground and a slow-down in the rural economy and Ashok Leyland has registered a robust 41% jump in commercial vehicles sales. M&M reported a marginal decline in sales at just 36,134 units, versus 38,466 units in the same month last year. However, Maruti is trading flat after just managing to post a marginal rise in its June numbers, with total sales growing 1.8% at 1,14,756 units, compared to 1,12,773 units in the same period last year.
The market breath is strong. Out of 1,332 stocks traded on the BSE, there are 893 advancing stocks as against 387 declines.
