Benchmarks turn rangebound; Nifty trades above 10,900

Key equity barometers were trading in a narrow range with modest gains in mid-morning trade. The Nifty was trading above 10,900 level. IT and auto shares rose. At 11:25 IST, the barometer index, the S&P BSE Sensex, was up 134 points or 0.37% at 36,833.84. The Nifty 50 index was up 43 points or 0.40% at 10,905.60.

The S&P BSE Mid-Cap index was up 0.75%. The S&P BSE Small-Cap index rose 0.97%.

The market breadth was strong. On the BSE, 1315 shares rose and 653 shares fell. A total of 94 shares were unchanged.

Shares of public sector oil marketing firms fell. Hindustan Petroleum Corporation (down 0.88%), Indian Oil Corporation (down 0.34%) and Bharat Petroleum Corporation (down 0.19%) declined.

In the commodities market, Brent crude for October 2019 settlement was up 65 cents at $60.46 a barrel. The contract fell $2.08 or 3.36% to settle at $ 59.81 a barrel in the previous trading session.

Mangalam Cement hit 20% upper circuit at Rs 263.25. The cement maker reported net profit of Rs 33.22 crore in Q1 June 2019 over a net loss of Rs 15.32 crore in Q1 June 2018. The net sales rose 30.8% to Rs 333.16 crore in Q1 June 2019 over Q1 June 2018. The result was announced after market hours yesterday, 5 August 2019.

Entertainment Network (India) fell 1.28%. On a consolidated basis, the company's net profit fell 58.7% to Rs 3.85 crore on a 10.6% rise in the net sales to Rs 130.52 crore in Q1 June 2019 over Q1 June 2018. The result was announced after market hours yesterday, 5 August 2019.

PNB Gilts gained 2.65%. The firm reported net profit of Rs 45.16 crore in Q1 June 2019 compared with net loss of Rs 44.25 crore in Q1 June 2018. Total income rose 93.8% to Rs 193.60 crore in Q1 June 2019 over Q1 June 2018. The result was announced after market hours yesterday, 5 August 2019.

PNB Housing Finance rose 0.96%. The housing finance announced that it has raised fresh $75 million ECB from Sumitomo Mitsui Banking Corporation (SMBC) Singapore. The announcement was made before market hours today, 6 August 2019.

Most auto stocks advanced. Escorts (up 2.44%), Maruti Suzuki India (up 1.14%), TVS Motor Company (up 1.05%), Hero MotoCorp (up 0.7%), Eicher Motors (up 0.65%) and Mahindra & Mahindra (up 0.35%) advanced.

Ashok Leyland (down 1.64%) and Bajaj Auto (down 0.64%) declined.

Tata Motors rose 0.61%. The company announced that ICRA Ratings' Credit Research had downgraded long-term facilities to 'AA-' from 'AA', with outlook remaining negative due weakening of financial profile at Jaguar Land Rover Business. The announcement was made after market hours yesterday, 5 August 2019.

Most IT stocks rose. Tech Mahindra (up 2.56%), Hexaware Technologies (up 1.62%), MindTree (up 0.57%), HCL Technologies (up 0.18%), Oracle Financial Services Software (up 0.04%), MphasiS (up 0.01%), Persistent Systems (up 0.01%) advanced.

Wipro (down 1.28%), TCS (down 0.77%) and Infosys (down 0.16%) declined.

Zensar Technologies rose 0.44% ahead of its Q1 June 2019 resut.

Meanwhile, the Reserve Bank of India (RBI)'s third bi-monthly monetary policy committee (MPC) meeting started on 5th August. The resolution of the MPC will be placed on the RBI website at 11:45 IST on 7 August.

The ASSOCHAM expects RBI to cut the benchmark policy repo rate by 50 basis points or more, in the wake of a realistic assessment of the state of economy which needs an immediate demand push and investment support by way of reduced cost of borrowing. The ASSOCHAM held wide consultations with stakeholders and a deep down assessment showed that a double-pronged strategy of reviving consumer demand and reducing cost of borrowing for inducing fresh investment is needed immediately.

Both the RBI and the government are expected to jointly work on a model that infuses more liquidity, especially for sectors like NBFCs, automobile, housing and real estate, the chamber said, ahead of the bi-monthly review of the credit policy by the RBI Monetary Policy Committee. The measures like additional infusion of Rs 10,000 crore by the National Housing Bank into the housing finance companies are certainly welcome. The chamber said, while the RBI has already cut the Repo rate by 75 basis points, the transmission is much less than even half by the banks, which should now be prevailed upon to pass on the reduction in the benchmark policy interest rate.

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