Indices trade near day's high

Key indices were trading near the day's high in early afternoon trade. At 12:27 IST, the barometer index, the S&P BSE Sensex, was up 112.15 points or 0.29% at 39,243.19. The Nifty 50 index was up 31.95 points or 0.27% at 11,694.55.

The S&P BSE Mid-Cap index was up 0.15%. The S&P BSE Small-Cap index was up 0.11%.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 1117 shares rose and 987 shares fell. A total of 152 shares were unchanged.

Most auto shares fell. Bajaj Auto (down 0.76%), Eicher Motors (down 0.62%), Maruti Suzuki India (down 0.53%), Ashok Leyland (down 0.29%), Mahindra & Mahindra (down 0.28%) and Tata Motors (down 0.12%) declined.

Escorts (up 1.14%), TVS Motor Company (up 0.41%) and Hero MotoCorp (up 0.27%) advanced.

The Government said that it is aware that the auto sector which has been growing at approximately 7-8% per annum has witnessed a sluggish rate of sales in the last two quarters. During the period from January 2018-June 2018, 13.39 million vehicles (all categories) were sold and during the period from January 2019-June 2019, 12.04 million vehicles were sold. A net decline of 10.08% was registered in the rate of automobile sale in the last two quarters. The Government, as a policymaker, always attempts to kickstart the sluggish economy through a package of measures for comprehensive and continued development of the auto sector as and when required. This information was given by the Minister of Heavy Industries & Public Enterprises, Arvind Ganpat Sawant, in a written reply in the Lok Sabha.

5paisa Capital was down 4.98%. On a consolidated basis, 5paisa Capital reported net loss of Rs 52 lakhs in Q1 June 2019 compared with net loss of Rs 6.10 crore in Q1 June 2018. Total income rose 152.4% to Rs 22.92 crore in Q1 June 2019 over Q1 June 2018.

Tata Elxsi was down 3.43%. The company reported that the net profit declined 31.56% to Rs 48.79 crore on a 10.71% fall in net sales to Rs 361.71 crore in Q1 June 2019 over Q4 March 2018.

Pharma stocks fell. IPCA Laboratories (down 2.14%), Cadila Healthcare (down 1.51%), Strides Shasun (down 1.26%), Aurobindo Pharma (down 0.86%), Glenmark Pharmaceuticals (down 0.6%), Lupin (down 0.56%), Divi's Laboratories (down 0.28%), Cipla (down 0.14%), Dr Reddy's Laboratories (down 0.06%) declined.

Piramal Enterprises (up 0.96%), Wockhardt (up 0.49%), GlaxoSmithKline Pharmaceuticals (up 0.36%), Sun Pharmaceutical Industries (up 0.32%) and Alkem Laboratories (up 0.09%) advanced.

Strides Pharma Science fell 1.93%. Media reports suggested the US drug regulator has found significant violation of current good manufacturing practice (cGMP) regulations at the company's plant in Puducherry. It further added that the US Food and Drug Administration (USFDA) inspectors said they found what appeared to be records awaiting shredding at Strides Pharma Science's manufacturing facility in Puducherry.

Meanwhile, the Association of Indian Manufacturers of Medical Devices (AiMeD) have asked the government for higher import duties, preferential market access and capping of trade margins based on imports landed price. AiMeD seeks nominal duty increase with a predictable policy for what is made in India and addition of more devices under price capping.

The yield on India's 10-year benchmark federal paper rose to 6.366% at 12:16 IST compared with 6.331% at close in the previous trading session. India's sovereign bonds have rallied recently after the government trimmed FY20 fiscal deficit target to 3.3% from 3.4% estimated earlier. The government also proposed to raise a part of its gross borrowing overseas. Besides broadening the bond market, this proposal could open up a new source of funding the budget deficit.

The RBI has cut rates three times this year amid a subdued inflation outlook and sluggish growth. Wholesale price-based inflation declined for the second consecutive month to its 23-month low of 2.02% in June, prompting experts to expect another rate cut by the RBI, which is slated to meet in the first week of next month.

Overseas, Asian stocks were trading lower on Wednesday following overnight developments on the US-China trade front.

U.S. stocks closed lower on Tuesday after President Donald Trump said an agreement with China on trade tariffs had a long way to go adding that America could place tariffs on an additional $325 billion worth of Chinese goods. Trump made his comments during a cabinet meeting at the White House.

Federal Reserve chair Jerome Powell, while speaking in Paris at the Bank of France, said the economic outlook hasn't improved since the last Federal Open Markets Committee meeting in June, likely setting the stage for an interest rate cut.

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