Strong market breadth

Key benchmark indices continued to trade with strength in morning trade. At 10:30 IST, the barometer index, the S&P BSE Sensex, was up 88.02 points or 0.28% at 31,183.72. The Nifty 50 index was up 18.90 points or 0.2% at 9,635.30. HDFC and HDFC Bank led gains among domestic stocks. Cement stocks rose. Interest rate sensitive realty stocks rose on expectations of a rate cut by the Reserve Bank of India (RBI).

Stocks drifted higher in early trade as retail inflation and industrial output data released after market hours yesterday, 12 June 2017 boosted expectations of a rate cut by the Reserve Bank of India (RBI).

The S&P BSE Mid-Cap index was up 0.46%. The S&P BSE Small-Cap index was up 0.74%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1,373 shares rose and 745 shares fell. A total of 106 shares were unchanged.

Overseas, most Asian stocks were trading higher, , defying a weak lead from Wall Street. Major US stock-market benchmarks closed lower yesterday, 12 June 2017 weighed by a second straight session of firm losses in technology shares.

Investors are focused on the Federal Reserve, which on Wednesday is widely anticipated to deliver an interest-rate hike. Meanwhile, the Trump administration yesterday, 12 June 2017 proposed a wide-ranging rethinking of the rules governing the US financial sector in a report that makes scores of recommendations that have been on the banking industry's wish list for years.

Back home, cement stocks rose. Ambuja Cements (up 0.87%), ACC (up 1.98%), UltraTech Cement (up 1.56%) and Shree Cement (up 0.25%) gained.

Grasim Industries was up 0.9%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.

Interest rate sensitive realty stocks rose on expectations of a rate cut by the Reserve Bank of India (RBI) after release of retail inflation and industrial output data by government after market hours yesterday, 12 June 2017. Purchases of both residential and commercial property are largely driven by finance.

DLF (up 1.25%), Housing Development and Infrastructure (up 0.35%), D B Realty (up 0.47%), Unitech (up 1.36%), Sobha (up 0.03%), Godrej Properties (up 3.62%), Prestige Estates Projects (up 1.63%), and Parsvnath Developers (up 1.63%) gained. Oberoi Realty (down 0.29%) and Indiabulls Real Estate (down 0.22%) fell.

On the macro front, the index of industrial production (IIP) rose by 3.1% in April led by robust growth in electricity generation, data showed yesterday, 12 June 2017. IIP grew by 6.5% in April last year. The CSO also revised upwards the IIP growth figure for March to 3.75% from its provisional estimate of 2.7%. While presenting the March 2017 data, the IIP base year was revised from 2004-05 to 2011-12.

Another data released yesterday, 12 June 2017, showed that retail price inflation, as measured by the consumer price index (CPI), slowed to 2.18% in May from 2.99% in April 2017 as food prices started falling from their year-ago level.

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