Benchmarks continue firm trade; Auto, Metal leads

Indian equity benchmarks continued their firm trade in the late afternoon session on account of buying in frontline counters and taking cues from global counterparts. The sentiments were upbeat as India’s manufacturing activity improved slightly in June since higher overseas demand helped to boost new orders. Investors however were cautious after India Meteorological Department reported that the country has recorded the lowest June rainfall since 2009 amid predictions for an El Nino that previously caused droughts and cut crop output. The monsoon has made no progress over India’s western and central regions since June 15. Traders were seen piling up positions in Auto, Metal and Capital Goods while selling was witnessed in IT, TECK and HealthCare sector stocks. In scrip specific development, country’s largest car-maker Maruti Suzuki India was trading firm after reporting a 33.5% increase in its total sales for June at 112,773 units as against 84,455 units in the same month last year.

On the global front, the Asian markets were trading mostly in green, while the European markets traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,600 and 25,500 levels respectively. The market breadth on BSE was positive in the ratio of 1816:1110 while 96 scrips remained unchanged.

The BSE Sensex is currently trading at 25533.51, up by 119.73 points or 0.47% after trading in a range of 25556.28 and 25466.77. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.59%, while Small cap index was up by 1.26%.

The gaining sectoral indices on the BSE were Auto up by 3.13%, Metal up by 2.28%, Capital Goods up by 1.22%, Consumer Durables up by 0.89% and Realty up by 0.62%. On the flip side, IT down by 0.87%, TECK down 0.45%, HealthCare down by 0.33% and Oil & Gas down by 0.19% were the only losing indices on BSE.   

The top gainers on the Sensex were Hindalco Industries up by 7.01%, Maruti Suzuki up by 5.94%, Tata Motors up by 4.26%, M&M up by 3.61% and Tata Steel up by 2.78%.

On the flip side, Wipro down by 1.37%, TCS down by 1.01%, HDFC down by 0.98%, Sun Pharma down by 0.95% and Infosys down by 0.78% were the top losers on the BSE.

Meanwhile, business activity in Indian manufacturing sector expanded in June at its quickest pace since February driven by higher domestic and export order flows. The HSBC Manufacturing Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, rose to 51.5 in the month of June from 51.4 in May. Though the pace of expansion was marginal over previous month, the reading remained above the crucial 50 mark for the eighth consecutive month that separates growth from contraction. 

Manufacturers highlighted improved demand conditions in both domestic as well as export markets with all three broad areas of the manufacturing sector registering higher production volumes. Among the three monitored categories, capital goods sector witnessed sharpest rise in new orders. HSBC survey highlighted a marked and accelerated expansion of new export orders, pushing output sub-index to 52.4 from 51.7 in the previous two months.

Encouraged over the growing new work, Indian manufacturers also raised their quantity of purchases in the reported month. Buying activity increased at the fastest pace since March 2013 leading to high pre-production stocks. Although, the rate of stock accumulation was only slight and weaker than the long-run series trend, manufacturing firms also added workforce in June. However, the rate of job creation was marginal and slower than in the previous month.

Further, the survey signaled high inflationary pressure with the rate of cost inflation was solid and sharpest in three months. Manufacturers indicated that higher prices paid for metals, plastics, textiles, food, and energy led to a further increase in average purchase prices. Accordingly, in order to protect margins, firm increased their output prices. The rate of charge inflation was at an eight-month peak, signalling a further rise in inflation.  

The CNX Nifty is currently trading at 7,634.45, up by 23.10 points or 0.30% after trading in a range of 7,647.65 and 7,618.15. There were 27 stocks advancing against 22 declining while 1 stock remained unchanged on the index.

The top gainers of the Nifty were Hindalco up by 6.94%, Maruti up by 5.82%, Tata Motors up by 4.23%, M&M up by 3.69% and Tata Steel up by 2.73%. On the flip side, Asian Paints down by 2.11%, Wipro down by 1.77%, Tech Mahindra down by 1.39%, TCS down by 1.29% and Infosys down by 1.18% were the major losers on the index.

The Asian equity indices were trading mostly in green; Nikkei 225 up by 1.08%, Taiwan Weighted up by 0.52% and Shanghai Composite was up by 0.10% while, Jakarta Stock Index down by 0.10%, and Straits Times down by 0.52%. Hang Seng is closed on account of Hong Kong Special Administrative Region Establishment Day.

The European markets were trading in green; Germany’s DAX added 0.18%, France’s CAC 40 gained 0.39% while UK’s FTSE 100 was up by 0.43%.