Benchmarks trade jubilantly in early deals; Sensex surpasses 25,700 mark

Extending their previous session’s northward journey, Indian equity benchmarks have made a gap-up opening and are trading jubilantly in early deals on Wednesday with frontline gauges surpassing their crucial 25,700 (Sensex) and 7,650 (Nifty) bastions on the back of strong global cues. Overnight, the US markets came out of consolidation mood and surged in last session, supported by report of faster growth in the Chinese manufacturing sector, traders even shrugged off the report that construction spending increased by much less than expected in the month of May. Asian markets too were trading mostly in the green at this point of time with some of the indices trading at their six-year high taking cues from the rise in Chinese manufacturing.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Sentiments also remained up-beat on the back of rise in manufacturing, which expanded at the fastest pace since February, supported by growing order flows, especially from overseas. Meanwhile, Finance Minister Arun Jaitley has strongly hinted that the upcoming budget would not be an exercise of "mindless populism", given that the economy is faced with severe challenges.

Meanwhile, none of the sectoral indices were trading in the red, while metal and realty witnessed the maximum gains in trade. Consumer durables, infrastructure, power, capital goods, banking, and healthcare too were trading significantly. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1494 shares on the gaining side against 543 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex opened at 25660.57; around 144 point higher compared to its previous closing of 25516.35, and has touched a high and a low of 25735.59 and 25660.16 respectively. The index is currently trading at 25728.80, up by 212.45 points or 0.83%. There were 28 stocks advancing against just 2 declines on the index.

The overall market breadth has made a strong start with 71.14% stocks advancing against 25.86% declines. The broader indices too were trading in the green; the BSE Mid cap and Small cap indices up by 0.98% and 1.07% respectively. 

The top gaining sectoral indices on the BSE were, Metal up by 1.90%, Realty up by 1.84%, Consumer Durables up by 1.44%, Infrastructure up by 1.38% and Power up by 1.33%, while there was no loser on the sectoral index.

The top gainers on the Sensex were SSLT up by 2.95%, Coal India up by 2.16%, SBI up by 1.56%, HDFC Bank up by 1.53% and Sun Pharma up by 1.49%. On the flip side, Tata Motors was down by 0.81% and M&M was down by 0.23% were the only losers on the Sensex.

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 opened at 7,683.05; about 50 points higher as compared to its previous closing of 7,634.70, and has touched a high and a low of 7,697.20 and 7,677.30 respectively. The index is currently trading at 7,693.85, up by 59.15 points or 0.77%. There were 47 stocks advancing against 3 declines on the index.

The top gainers of the Nifty were SSLT up by 2.75%, DLF up by 2.42%, Coal India up by 2.38%, NMDC up by 1.83% and Sun Pharma up by 1.73%. On the flip side, HCL Tech down by 0.88%, Tata Motors down by 0.78% and M&M down by 0.41% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 soared 66.54 points or 0.43% to 15,392.74, Hang Seng increased by 223.92 points or 0.97% to 23,414.64, KOSPI Index gained 13.07 points or 0.65% to 2,012.07, Straits Times Index strengthened by 15.52 points or 0.48% to 3,258.16, Jakarta Composite added 3.60 points or 0.07% to 4,888.42, FTSE Bursa Malaysia KLCI rose by 2.46 points or 0.13% to 1,881.58 and Taiwan Weighted was up by 11.80 points or 0.12% to 9,453.72.

On the flip side, Shanghai Composite was down by 4.72 points or 0.23% to 2,045.66.