Markets seen snapping five day losing streak

Markets likely to snap their five-day losing streak led by bank shares

Markets firmed up in late trades and are likely to snap their five-day losing streak led by rate-sensitives as easing inflation could provide the necessary comfort to the central bank to ease key policy rates.

At 2:37PM, the 30-share Sensex was up 159 points at 25,166 and the 50-share Nifty was up 53 points at 7,507.

As per the data released late Monday, consumer price index (CPI)-based inflation fell to 7.31% in June, the lowest since its launch in January 2012.

Its wholesale counterpart declined to a four-month low of 5.43% in the month and wholesale price inflation eased to a four-month low in June after the new government curbed farm exports.

The Indian rupee trimmed losses and was trading marginally lower at Rs 60.11 against the US dollar compared to the previous close of Rs 60.07 as the dollar appreciated against Asian currencies. Stable trend in domestic equities also aided sentiment.

Asian markets were trading firm tracking overnight gains on Wall Street on Monday after the benchmark Dow Jones ended above 17,000 on the back of encouraging corporate earnings coupled with merger and acquisitions activity. Japan's benchmark Nikkei ended up 0.6%. Further, investors turned cautious ahead of key economic data from China. The Shanghai COmposite was up 0.2%. Hang Seng gained 0.5% and Straits Times was trading flat with negative bias.

European shares were trading mixed ahead of data from Germany and higher-than-expected British inflation data for June. The CAC-40 and DAx were down 0.2% and FTSE was trading flat.

BSE Bankex, Capital Goods, Realty and Consumer Durables indices were among the top sectoral gainers up 1.3-1.8% each followed by Oil and Gas, Auto and Metal indices.

Among the rate sensitive shares banks were among the top gainers led by ICICI Bank up 3%, SBI was up 3.5%, while HDFC Bank and Axis Bank were up 0.6-1.4% each.

Capital goods which had witnessed profit taking in the previous few sessions rebounded today on value buying. L&T and BHEL were up over 1.7-2% each.

Auto shares trimmed early gains. Tata Motors, M&M, Maruti Suzuki, Bajaj Auto were up 0.4-1.9% each.

Oil shares firmed tracking stability in global crude oil prices. Index heavyweight Reliance Industries was up 0.7%. ONGC gained 1.5% on talk that the government is considering partial stake in the state-owned oil exploration firm next month.

TCS was trading 0.9% lower ahead of its first quarter earnings on Thursday.

Other Sensex losers include, HDFC, ITC and Dr Reddys among others.

Among other shares, Force Motors retreated from its intra-day highs and is trading lower by 1% to Rs 425. Shares of cars and utility vehicles maker have fallen 32% from its 52-week high of Rs 625 touched on June 11 after Bajaj Holdings  & Investment sold more than 6 percentage points stake of the company through open market transactions.

The broader market also trimmed intra-day gains, the BSE Mid-cap index was up 1.2% and the BSE Small-cap index was up 1.5%.

Market breadth continued to remain strong with 1,663 gainers and 1,133 losers on the BSE.