Markets off day highs; June trade deficit at 11-month high

Baking majors ICICI Bank, Axis Bank and SBI were the top gainers of the hour

Markets have come off day highs as profit taking in HDFC twins and L&T weighed on the indices in late morning trades. At 1210 hrs, the Sensex was up 48 points at 25,276 and the Nifty was up 16 points to trade at 7,543.

In the broader markets, the smallcap index gained over 1% and the midcap index advanced nearly 1%, both outperforming the BSE benchmark index.

On the macro front, june trade deficit hit an 11-month high according to  government data. India's exports in June rose 10.22 percent from a year earlier, helped by a pick-up in external demand and a weak currency.

The rupee fell to 60.20/21 from its Tuesday close of 60.12/13 as recent dollar buying from state-run banks continues, but will look to the share market for further direction.

Sectors & Stocks

Realty and Banking indices up 1-2% were the top sectoral gainers. The upswing was after the Reserve Bank of India‘s move to boost demand for infrastructure and housing, following which the banks would not have to maintain CRR and SLR. Also, the banks will not have to meet priority-sector lending targets for funds raised through bonds for extending credit to these sectors.

Among the banks, ICICI Bank, Axis Bank and SBI were the major gainers, up 1-3%.

RIL, Hero MotoCorp, Tata Steel, Hindalco, Mahindra & Mahindra and HUL up 0.5-1% were the other notable gainers.

Meanwhile, Consumer Durables, Power and Capital Goods indices slipped into the negative and were down 0.1-0.3%.

Gail India, HDFC, Bajaj Auto, NTPC, Coal India and Sesa Sterlite down 0.8-2% were the major draggers.

In individual names, BF Utilities iwas up 7% higher at Rs 764 extending its past two-day rally on the Bombay Stock Exchange (BSE) after the company said its shareholders approved the proposal of raising up to Rs 500 crore via issue of equity shares.

Marico Kaya Enterprises surged 10% to Rs 345 after Morgan Stanley bought over 75,000 shares of the company from the open market.

The market breadth was positive owing to the strength in broader markets. 1,612 stocks advanced while 936 stocks declined.