Capital goods shares rally ahead of May IIP; L&T up 2%

Capital goods shares rallied ahead of May IIP data due on Friday

Markets continued to trade marginally lower weighed down by IT majors ahead of first quarter earnings from TCS even as capital goods shares rallied ahead of May IIP data. Further, fears on an uptick in consumer price inflation amid discouraging progress of monsoon weighed on investor sentiment.

At 1:20PM, the Sensex was at 27,628 levels, down by 60 points while Nifty was at 8,342, down by 21 points.

In the broader market, the BSE Midcap and Smallcap indices were trading with marginal gains. Market breadth was positive with 1,585 gainers and 915 losers on the BSE.

The Indian rupee was trading higher at 63.50 compared to the previous close of 63.60.

GLOBAL MARKETS

Chinese stocks rebounded after the sharp fall in the previous session after securities regulator imposed a ban on stock sales by investors with large stakes in listed companies. Further, the banking regulator said it would permit lenders to roll over loans taken against shares. The Shanghai Composite ended up 5.5% while shares in Hong Kong also surged nearly 4% tracking gains in mainland China. Further, Japanese shares ended with marginal gains up 0.6% while Straits Times was down 0.3%.

European shares extended gains on Thursday on hopes that international creditors would work out a deal with Greece after it presented fresh proposals on Wednesday. The CAC-40, DAX and FTSE-100 were up 0.7-1% each.

SECTORS & STOCKS

BSE Capital Goods was the top sectoral gainer up 1.8% followed by Consumer Durables and Power indices. IT index was the top loser followed by Oil and Gas index.

Capital goods shares gained on hopes of growth in industrial production during May 2015 the data for which is scheduled to be released on Friday. L&T and BHEL were up 2-3% each.

other Sensex gainers include, Bharti Airtel, Lupin, Hero MotoCorp, SBI and ICICI Bank among others.

Metal shares were trading mixed after the sharp losses in the previous session on account of softening global commodity prices and China's stock rout. Hindalco was up 2% while Vendanta was down 2.7%.

IT exporters were trading weak tracking gains in the rupee and ahead of first quarter earnings from TCS. TCS and Infosys were down 1.7% each while Wipro was trading with marginal losses.

Yes Bank which had lost ground in the previous session post the downgrade by UBS was trading nearly 1% higher after the bank announced that it has completed the placement of Rs 554 crore of Basel-III compliant Tier-II bonds at a coupon rate of 9.15 per cent with a tenor of 10 years.

Among other shares, Tech Mahindra were up nearly 1% at Rs 475 after the company announced that it has entered into a collaboration with PNMsoft, a global provider of Intelligent BPM Software solutions, to benefit from synergies in key vertical markets.

Bhushan Steel stock is locked in upper circuit of 20% at Rs 66 on the BSE on reports that the company has received lenders' approval for long-term restructuring of about Rs 30,000 crore loans under a scheme of Reserve Bank of India (RBI).