India : Market at new 11-month high, Nifty hits 8500; IT underperforms

The market has opened at fresh 11-month high with the Nifty hitting 8500. The 50-share index is up 34.70 points or 0.4 percent at 8502.60 and the Sensex is up 98.77 points or 0.4 percent at 27725.46. About 385 shares have advanced, 94 shares declined, and 26 shares are unchanged.Axis Bank, HDFC, Bharti Airtel, Maruti and NTPC are top gainers while Coal India, BHEL, TCS, Infosys and Cipla are losers in the Sensex.

The Indian rupee opened marginally lower by 5 paise at 67.17 per dollar on Tuesday versus 67.12 Monday. The dollar near a one-week high against the yen following Japanese Prime Minister Shinzo Abe’s call for a fresh round of fiscal stimulus.

Ashutosh Raina of HDFC Bank said, “The robust non-farm payroll number has triggered a global risk-on rally, as concerns about US economy losing momentum have been set aside. This coupled with expectations of more stimulus measures around the world has resulted in risk rallies across and EM currencies reacting higher against dollar.”

The consumer price index (CPI) for the month of June is seen at 5.75 percent versus 5.76 percent for the month of May. The range is likely to be between 5.5-6.2 percent. The core CPI is seen at 4.7 percent, the same as was seen for the earlier month. This CPI is likely to flat because of the base effect although the vegetable prices are high. The food inflation for the same period last year had risen month on month.

The consumer price index (CPI) for the month of June is seen at 5.75 percent versus 5.76 percent for the month of May. The range is likely to be between 5.5-6.2 percent. The core CPI is seen at 4.7 percent, the same as was seen for the earlier month. This CPI is likely to flat because of the base effect although the vegetable prices are high. The food inflation for the same period last year had risen month on month.

Monsoon rains will cover the whole of India in the next 48 hours, the country’s weather office said, boosting hopes of a rise in farm output and incomes after two straight years of drought.

The monsoon has yet to cover parts of Rajasthan and Gujarat and rains will be 107 percent of long period average in July, B P Yadav, head of the national weather forecasting centre of the India Meteorological Department told Reuters.

Monsoon rains, the lifeblood of India’s agriculture-dependent economy, arrived a week later than usual this year and are crucial for the planting of summer-sown crops such as cotton, rice, soybean and sugarcane.

Asian markets were broadly higher with shares in Japan leading the region. The Nikkei 225 was up 3.34 percent while Hong Kong’s Hang Seng was about 0.81 percent higher. China’s Shanghai Composite was up around 0.35 percent.

US stocks closed higher on Monday as investors cheered an election in Japan and extended a jobs-report rally. The S&P 500 index closed at a new all-time high and also posted a new all-time intraday high of 2,143.