Benchmarks continue firm trade in late afternoon session

Indian equity benchmarks continue their firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on optimistic note as the two and half year high GDP data suggested that growth may be turning around at last. Traders were seen piling up positions in Capital Goods, Realty and Oil & Gas while selling was witnessed in FMCG sector stocks. In scrip specific development, United Breweries (Holdings), Kingfisher Airlines (KFA) and United Breweries were trading under pressure after state-run United Bank of India became the first lender to declare debt-ridden KFA and its promoter Vijay Mallya as willful defaulters. On the global front, the Asian markets were trading mostly in green, while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,000 and 26,800 levels respectively. The market breadth on BSE was positive in the ratio of 1802:991 while 130 scrips remained unchanged.

The BSE Sensex is currently trading at 26846.80, up by 208.69 points or 0.78% after trading in a range of 26732.39 and 26860.30. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.24%, while Small cap index up by 1.05%.

The gaining sectoral indices on the BSE were Capital Goods up by 2.45%, Realty up by 2.02%, Oil & Gas up by 1.92%, Power up by 1.78%, PSU up by 1.70% while, FMCG down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 4.12%, Hero MotoCorp up by 3.87%, GAIL India up by 2.86%, Larsen & Toubro up by 2.76% and Cipla up by 2.62%. On the flip side, Sun Pharma down by 1.70%, Tata Motors down by 0.84%, ITC down by 0.61%, HDFC down by 0.58% and BHEL down by 0.50% were the top losers.

Meanwhile, business activity in Indian manufacturing sector eased in August from July’s 17-month record pace as new orders came in at a slower clip. The HSBC Manufacturing Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, fell to 52.4 in the month of August from 53 in the previous month. However, manufacturing PMI reading remained above 50 mark indicating expansion in operating conditions and was supported by strong expansions in total new orders and business from abroad. Among the monitored sub-sectors, capital goods sector witnessed high output growth, however, business conditions deteriorated in the capital goods category.

The HSBC survey highlighted that new orders increased for a tenth month in succession. The new orders sub-index fell to 54.5 from 55.9, still considered a healthy pace of expansion. Similarly, new export orders rose in August, extending the current sequence of growth to 11 months. Manufactures attributed expansions in foreign business to strengthening demand from key export clients.  Amid continued growth in demand, Indian manufacturers picked up their purchasing activity for a tenth month running in August and the steepest rise in buying activity was recorded by consumer goods companies, whereas producers of capital goods reported a reduction. Subsequently, input stocks and post-production inventories held by Indian manufacturers grew in the reported month in order to respond to expansions in new orders. However, workforce numbers declined for a second successive month in August.

The survey further indicated high inflationary pressure with factory gate prices rising during the month. Manufactures paid higher prices for raw materials, indicating that input costs rose strongly in August. However, the rate of cost inflation slowed from the previous month July. The pace of charge inflation at Indian manufacturers was slight overall. All three monitored sub-sectors recorded price rises and the sharpest increase recorded in the consumer goods category.

The CNX Nifty is currently trading at 8017.80, up by 63.45 points or 0.80% after trading in a range of 7984.00 and 8023.30. There were 38 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 4.08% and Hero MotoCorp up by 3.99% and GAIL India up by 3.29% and Larsen & Toubro up by 2.85% and IndusInd Bank up by 2.78%. On the flip side, Jindal Steel & Power down by 1.95%, Sun Pharma down by 1.76%, Tata Motors down by 0.96%, HDFC down by 0.76% and ITC down by 0.73% were the top losers.

The Asian markets were trading mostly in green; Hang Seng increased 10.03 points or 0.04% to 24,752.09, Shanghai Composite increased 18.31 points or 0.83% to 2,235.51, Jakarta Composite increased 34.46 points or 0.67% to 5,171.32, Nikkei 225 increased 52.01 points or 0.34% to 15,476.60 and Taiwan Weighted increased 76.79 points or 0.81% to 9,513.06.

On the other hand, Straits Times decreased 13.56 points or 0.41% to 3,313.53, FTSE Bursa Malaysia KLCI decreased 9.57 points or 0.51% to 1,866.11 and KOSPI Index decreased 0.68 points or 0.03% to 2,067.86.

The European markets were trading in red; France’s CAC decreased 10.79 points or 0.25% to 4,370.25, Germany’s DAX decreased 4.78 points or 0.05% to 9,465.39 and UK’s FTSE 100 decreased 8.95 points or 0.13% to 6,810.80.