Nifty facing resistance above 8,200; banks weigh

Profit taking in auto major Tata Motors and select banking majors capped upside gains

Benchmark share indices continued to remain rangebound in noon trades as profit taking in banks and select auto shares capped further upside.

At 12:55pm, the S&P BSE Sensex was up 87 points at 26,755 and the Nifty50 gained 24 points at 8184. In the broader market, the BSE Midcap and Smallcap were up 0.1%-0.5% each. Market breadth was strong with 1350 gainers and 1003 losers on the BSE.

ECONOMY

India’s gross domestic product (GDP) expanded to 7.6 per cent in 2015-16, up from 7.2 per cent a year ago. The full-year growth was fuelled by nearly 8% growth rate in the fourth quarter of 2015-16, the fastest in the world for the January-March quarter and FY16 since the new GDP series was launched in 2011-12.

India’s manufacturing PMI in May stood at 50.7 as against 50.5 in April indicating an uptick in the manufacturing data.

Growth in the eight core sectors jumped to 8.5% in April, due to a sharp pick-up in refinery products and a commensurate rise in electricity generation.

Meanwhile, the country’s fiscal deficit for 2015-16 was Rs 5.32 lakh crore, about 99.5 per cent of the government’s revised target of Rs 5.35 lakh crore, compared with 99.6 per cent for the same period a year before, official data showed on Tuesday.

TAXATION

A slew of additional taxes announced in the Budget, including agriculture cess on services, equalisation levy, higher securities transaction tax on sale of options and tax collection at source on cash purchases for goods and services over Rs 2 lakh, will kick in from Wednesday.

The 0.5% Krishi Kalyan Cess (KKC) on all services increases the total tax chargeable on services to 15 per cent, making it expensive to dine out or travel.

STOCKS

Axis Bank came off its early highs and was up 0.9% after Reserve Bank allowed Axis Bank to raise foreign shareholding to up to 62%, from the earlier limit of 49%.

IT exporters staged a recovery after a correction in the previous session. TCS, Infosys and Wipro were up 0.6%-2% each.

Maruti Suzuki pared early gains and was trading flat. The car major maintained a double digit sales growth of 10% in the domestic market for May in spite of a production loss of approximately 7,500 units.

Among other auto stocks M&M was up nearly 1% while Hero Motocorp and Bajaj Auto were marginally down ahead of May sales numbers. However, Tata Motors has shed 1% on account of profit booking after gains of over 9% in the previous session.

Reliance Industries was trading flat with positive bias. The company is undertaking shut down of two of its petrochemical units at Dahej in Gujarat in response to insufficient water to run the units, the company informed bourses on Tuesday.   

ONGC Videsh (OVL), the foreign arm of state-run Oil and Natural Gas Corporation (ONGC), has signed an agreement with SOCAR Trading, trading arm of Azerbaijan’s government-owned energy firm, SOCAR, for foraying into oil trading business. ONGC was up 0.4%

Sun Pharma was marginally down. The pharma major expects 8-10% growth in sales in 2016-17, aided by "traction" across its businesses, and cautioned that a planned investment in the US is likely to impact short-term profits.

Banking majors also witnessed profit taking with ICICI Bank, HDFC Bank and SBI 0.6%-1.4% each.

Among others, V-Guard Industries was trading higher by 6% to Rs 1,352 on the BSE on the back of heavy volumes. Till 12:09 AM, a combined 179,731 shares changed hands against an average sub 50,000 shares that were traded daily in past two weeks on the BSE and NSE.

Shares of Nuclear Software Exports were up over 1% at Rs 206 on the Bombay Stock Exchange after the company announced the Australian release of its mobile loan self-sourcing solution - mApply at the Australian Retail Banking Summit 2016.