Markets remain marginally positive, CIL surges 6%

Benchmark indices are trading marginally positive amid volatility led by buying among index heavyweights RIL and ITC. However, the upside has been capped by engineering major BHEL which has slumped by over 17% post the announcement of disappointing Q1 numbers.

By 12:45 PM, the Sensex gained by 54  points at 19,218 mark whereas the Nifty was higher by 11 points at 5,689.

According to Chetan Jain, Deputy Manager - Derivatives Desk, “Nifty is trading near its crucial support area of 5600-5700 area where maximum put OI is concentrated. The PCR OI has been trading near psychological one level in this expiry, despite market falling continuously, indicates that Put writers are being aggressive even in the falling market and they are comfortable at lower levels.”

On the global front, Japan's Nikkei share average fell on Monday in thin volume as the yen strengthened against the dollar after weaker-than-expected U.S. jobs data, prompting investors to take profits after recent gains, with exporters particularly hard hit.

The HSBC/Market Purchasing Managers' Index (PMI) for the services industry stood at 51.3 in July, unchanged from June and just a whisker above a 20-month low of 51.1 struck in April.  

The benchmark Nikkei dropped 1.4% to 14,258.04, giving up some of its 5.8% rise over the past two sessions. The Topix dropped 1% to 1,184.74. Trading volume for both the Nikkei and the Topix was the lowest since December 2012.

European markets have opened marginally positive. CAC, DAX and FTSE have gained between 0.2-0.3%.

Back home, the Indian rupee trimmed its initial gains but was still quoted up by 16 paise to 60.94 per dollar in late morning session today on selling of the US currency by banks in view of foreign capital inflows into equity market.

On the sectoral front, BSE Metal and FMCG indices have surged by nearly 2%. However, BSE Capital Goods index has declined by nearly 4% followed by counters like Power, Consumer Durables and Auto, all falling down between 1-2%.

Metal shares are shining in trades today after the latest data indicated China's service industries showed the first pick-up in growth since March.

Coal India has moved higher by 6% to Rs 270, despite of weak April-June (Q1FY14) results, on expectation of earnings improvement by going forward. The stock has bounced back 9% from intra-day low Rs 248, also its record low since listing on BSE.

Sterlite, JSPL and Tata Steel have gained between 1-4%.

FMCG majors ITC and HUL have gained by 2% each. Index heavyweight RIL has surged by over 1%.

Shares of capital goods (CG) companies are under pressure with the Bombay Stock Exchange (BSE) CG index hits four-year low, after the sector majors has reported a lower-than-expected net profit growth for the quarter ended June 30, 2013 (Q1).

Bharat Heavy Electricals Limited (BHEL), Larsen and Toubro, SKF India, Crompton Greaves, Siemens and Thermax are trading lower by 1-18% on BSE.

Bharat Heavy Electricals Limited (BHEL) has tanked over 18%, its lowest level since December 2005, after reporting a sharp 50% year-on-year drop in its net profit at Rs 465 crore for the first quarter ended June 30, 2013 (Q1), due to lower sales. The power equipment maker had clocked net profit of Rs 921 crore in the year-ago period.

Among other shares, Neyveli Lignite Corporation (NLC) has dipped 7% to Rs 49.20 after the government has offloaded 3.56% of its stake through the institutional placement programme (IPP) on Friday.

The broader markets continue to underperform the benchmark indices. BSE Midcap index has declined by 0.4% whereas BSE Smallcap index is almost flat.

The market breadth in BSE remains weak with 1,072 shares declining and 867 shares advancing.