Broader markets outperform in a rangebound trade; Smallcap index up 1%

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Benchmark indices are trading in a narrow range with Sensex and Nifty swinging between negative and positive zone.

By 10:35 am, the S&P BSE Sensex gained 24 points to trade at 27,827 and the Nifty50 inched up 7 points at 8,548. Broader markets continue to outperform the benchmark indices- BSE Midcap and Smallcap indices are up nearly 1% each.
Asian shares held near nine-month highs on Monday as worries over the impact of Britain’s Brexit vote eased, while the dollar was buoyed by a run of solid U.S. economic data.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, sitting 0.5% below its nine-month peak hit on Thursday.

Japan’s Nikkei rose 0.4%. The Bank of Japan is widely expected to ease policy further at a policy review ending on Friday while Japanese Prime Minister Shinzo Abe has ordered fiscal stimulus.

Back home, SBI, HDFC, Maruti Suzuki, Cipla and Lupin have gained between 1%-2%. Dr Reddy’s Labs, Axis Bank, Bajaj Auto, Bharti Airtel and HUL are down 1%-3%.

The Supreme Court has asked Cipla to deposit Rs 175.07 crore within a period of six weeks with regard to cases pertaining to overcharging of certain drugs.

Axis Bank is down 2% after the bank reported 21% year on year (YoY) decline in net profit at Rs 1,556 crore for the quarter ended June 30, 2016 (Q1FY17), due to higher provisioning for bad loans.

IL&FS Engineering and Construction Company has rallied 15% to Rs 58.60 on the BSE after the company late Friday announced that it has won the Rs 532.67-crore contract from Nagpur Rail Corporation. **********************************
Updated at 9:20 am

Markets have started the session on a marginally lower note tracking subdued Asian cues along with weakness among banks leading the decline. However, buying demand among defensive sectors like FMCG and pharma has also limited the losses.

By 9:20 am, the S&P BSE Sensex dipped 46 points to trade at 27,757 and the Nifty50 slipped 17 points at 8,525. Broader markets continue to outperfor5m the benchmark indices- BSE Midcap and Smallcap indices are up 0.4%.

Investors will closely follow important cues this week like July F&O expiry, GST bill in ongoing monsoon session of parliament, global market sentiments, the monsoon progress and quarterly earnings.

Going forward, all eyes are on the last monetary policy review for the current Reserve Bank of India Governor Raghuram Rajan, due on August 2, before he steps down a month later.

Speaking about the global developments that can have a bearing on domestic market sentiments, DK Aggarwal, Chairman and Managing Director, SMC Investments and Advisors, said markets here will also keep a close eye on the meetings of the US Federal Open market Committee (FOMC) and Bank of Japan that are scheduled this week.

Among overseas markets, Asian stocks edged higher as traders eye key central bank meetings in the US and Japan due later in the week. Japan’s central bank Bank of Japan (BOJ) undertakes monetary policy review on 28-29 July 2016. Market expectations of aggressive monetary easing from the BOJ have receded after comments by BOJ Governor Haruhiko Kuroda.

Back home, Bajaj Corp, Canara Bank, Indiabulls Housing Finance, Tata Sponge Iron and Texmaco Rail & Engineering will announce their Q1 earnings today.

Vedanta and Cairn India will be in focus after Vedanta sweetened the terms of the deal for the merger of Cairn India with Vedanta. Cairn India is up almost 1% whereas Vedanta is down nearly 2%.

Axis Bank, the country’s third largest private sector lender, has dipped by over 3% after it had a 21% decline in net profit in the June quarter to Rs 1,556 crore. As in this one, there was a dip in the March quarter, too, as bad loans and provisioning for these had increased. Gross non-performing assets (GNPAs) increased to 2.54% of the total in the quarter ended June, as compared to 1.67% in the preceding one.