Markets trading flat; Nifty holds 8,450

Auto stocks rallied on healthy June sales growth

Benchmark shares indices continued to trade flat amid lack of fresh buying as investors remained cautious about the ongoing developments in Greece.

At 1:20PM, the 30-share Sensex was trading flat at 28,020 and the 50-share Nifty was up 7 points at 8,460.

In the broader market, the BSE Mid-cap and Small-cap indices were up 0.7% each. Market breadth was strong with 1,419 gainers and 1,064 losers on the BSE.

The Indian rupee was trading higher at 63.56 to the US dollar compared with the previous close of 63.61 amid dollar sales by banks and exporters.

Further, RBI Governor in a press conference today said that exposure to Greece is limited adding that growth prospects in India are better but exports to several Asian economies remained weak. He also added that the monsoon has been good so far.

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.

SECTORS & STOCKS

Oil and Gas index was the top gainer up 1% followed by FMCG and Auto among others. However, Consumer Durables, Metal and IT indices were trading lower.

Index heavyweight Reliance Industries was up nearly 1% after after the company decided to invest of over Rs 250,000 crore in the digital space, including rollout of wireless broadband infrastructure and manufacturing of mobile handsets.

Auto stocks witnessed buying interest after healthy growth in June sales. M&M, Bajaj Auto and Hero Motocorp were up 1.2-1.9% each.

Bharti Airtel was up 2%. The telecom major is set to launch full mobile number portability (MNP) from tomorrow, which will allow customers to retain their numbers across the country.

Coal India was down nearly 1% after the company and its subsidiaries on provisional basis achieved 95% of targeted production at 38.83 million tonnes in June 2015.

Profit taking was seen in stocks of IT exporters after reports that global IT spending is likely to decline while the ongoing development in Greece also weighed on sentiment. Infosys and TCS were down 0.2-0.8% each.

FMCG stocks gained on hopes that normal monsoon rains would help boost rural volumes while easing global commodity prices also aided sentiment.  ITC, HUL are up between 0.5-0.7% each.

Among other shares, Ramco Systems has surged 14% to Rs 888 on the BSE after the Australian coffee manufacturer FreshFood signed a pact with the company to replace its legacy systems with mobile-based postmodern enterprise resource planning (ERP).