Markets continue to trade at record levels; Realty and capital goods take the lead

Markets are maintaining their record highs, showing a consistent trade since morning. Nifty is maintaining its lead above 8000 with traders rejoicing the good economy data of GDP. While, the Asian markets were trading cautiously in positive, the mostly positive start of the European markets has additionally supported the domestic markets. The jubilation can be gauged with the fact that all the sectoral indices barring the defensive FMCG was trading in green. Realty and capital goods have taken the lead as the two and half year high GDP data has suggested that growth may be turning around at long last. The finance ministry expects the pace of growth to hasten even further and Finance secretary Arvind Mayaram expects the economy to expand 5.8% during the fiscal. Meanwhile, auto sales numbers for the month of August has started trickling in with Indian automobile market expected to show strong volume growth across most segments during August 2014, led by improved demand. Maruti Suzuki was trading higher by over 3 percent, as the company reported better than estimated 27 per cent year-on-year (y-o-y) auto sales numbers for the month of August.

The BSE Sensex is currently trading at 26836.14, up by 198.03 points or 0.74% after trading in a range of 26732.39 and 26854.55. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.23%, while Small cap index gained 1.10%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.01%, Realty up by 1.92%, Consumer Durables up by 1.86%, Bankex up by 1.46%, Infra up by 1.31%, while FMCG down by 0.20% was the lone losing index on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 4.12%, Maruti Suzuki up by 3.03%, Larsen & Toubro up by 2.76%, Cipla up by 2.47% and GAIL India up by 2.07%. On the flip side, Sun Pharma Inds down by 1.33%, Tata Motors down by 1.16%, ITC down by 0.58%, BHEL down by 0.54% and Hindustan Unilever down by 0.42% were the top losers.

Meanwhile, signaling a turnaround for the economy, India’s economy expanded at its fastest pace in more than two years by 5.7% during the April-June quarter of current fiscal as compared to 4.7 percent growth recorded in same quarter last year. The Q1 GDP growth has been driven by sharp turnaround in manufacturing coupled with strong performance by mining and construction sector.

The manufacturing sector, which accounts for about 15% of the economy, grew by 3.5% in April-June, fastest in nine quarters as compared to a contraction of 1.4% in the previous quarter and a decline of 1.2% in the year-ago period. Electricity output grew by 10.2 per cent as compared to 3.8 per cent in same quarter this year. Construction sector grew by 4.8 percent in Q1FY15 as compared to 1.1 percent in Q1FY14.

Agriculture sector output grew 3.8 percent in April-June this year, slightly lower than 4 percent growth in same quarter last year.  Among the major components of the services economy, communication, trade and hotels have recorded growth higher than the previous year. Trade, hotels, transport and communication grew 2.8 percent as compared to 1.6 per cent in Q1 FY14.

Investments seem to have rebounded with investment activity rising at solid pace and reassured consumers have begun to spend again, indicating the worst slowdown in the last decade may finally be over. Gross fixed capital formation registering a 7% growth in the first quarter, against a 2.8% contraction in the same quarter last year. This is the highest growth in two years. Capital goods output, a broad gauge of investment activity, grew 13.9% in April-June, compared to a contraction of 3.7% in the same period of the previous year, suggesting that companies are adding new capacities. Improved sentiment, the renewed policy thrust and a pickup in consumer demand are likely to drive investments in future.

The CNX Nifty is currently trading at 8021.70, up by 67.35 points or 0.85% after trading in a range of 7984.00 and 8023.30. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 4.29% and Indusind Bank up by 3.25% and Maruti Suzuki up by 3.10% and Larsen & Toubro up by 2.92% and Ultratech Cement up by 2.63%. On the flip side, Sun Pharma Inds. down by 1.37%, Tata Motors down by 1.33%, ITC down by 0.70%, Hindustan Unilever down by 0.59% and IDFC down by 0.31% were the top losers.

The Asian markets were trading mostly in the green, Shanghai Composite was up by 18.31 points or 0.83% to 2,235.51, Jakarta Composite gained 33.78 points or 0.66% to 5,170.64, Hang Seng was up by 51.16 points or 0.21% to 24,793.22, Nikkei 225 increased by 52.01 points or 0.34% to 15,476.60 and Taiwan Weighted inched higher by 76.79 points or 0.81% to 9,513.06

On the flip side Straits Times decreased by 14.75 points or 0.44% to 3,312.34, FTSE Bursa Malaysia KLCI declined by 9.57 points or 0.51% to 1,866.11 and KOSPI Index decreased by 0.68 points or 0.03% to 2,067.86

European Markets made mostly a positive start, France’s CAC increased by 1.28 points or 0.03% to 4,382.32, Germany’s DAX added 7.61 points or 0.08% to 9,470.17. On the other hand UK’s FTSE 100 decreased by 7.36 points or 0.11% to 6,812.39.