Post Session: Quick Review

Markets extended their jubilation on Monday, surging to their record high. While the Nifty surged past 8000 level, BSE Sensex closed it at its fresh record high. Traders rejoiced the good economic data announced during the weekend. India's economic growth accelerated to two-and-half year high of 5.7 per cent in the April-June quarter on the back of improvement in mining, manufacturing and services sector performance. Taking the opportunity of upbeat economic development, Prime Minister Narendra Modi on his Japan tour said that it has generated a “huge positive sentiment” while exhorting Japanese businessmen to invest in India. The mood was so euphoric that traders even ignored some softness in manufacturing growth. The HSBC India Manufacturing PMI for the month of August slowed to 52.4 as against a July's 17-month high of 53.0.

The global cues too remained supportive, the Asian markets ended mostly in green riding on hopes that there will be some stimulus from the Chinese government after country’s manufacturing slowed more than estimated last month, however the European markets turned lower after a green start as Euro-area manufacturing activity slowed more than initially estimated in August.

Back home, the Indian markets showed a consistent performance throughout the day, in the final hours the bourses even flared up to close at record highs with no sign of any profit booking. In the final hours when Supreme Court begin a crucial hearing to decide the fate of 218 coal blocks, whose allocation it had declared 'illegal and arbitrary, it was reported that Attorney General has said that the government has no qualm in cancellation of blocks but requested sparing 46 crucial ones. Although, apex court is not expected to order immediate de-allocation of all the blocks. Back on street all the sectoral indices on the BSE barring defensive FMCG, posted good gains for the day. There was major action in capital goods, metal, power and realty which posted gains of over two and half a percent for the day. In the non sectoral gauges PSU oil marketing companies showed some strength after the under-recovery on High Speed Diesel declined to Rs 0.08 per litre in the first fortnight of September 2014. In the case of PDS Kerosene and Domestic LPG, too the under-recoveries declined. The auto sector stocks too kept buzzing for the day after August sales numbers started trickling in and manufacturers showing strong volume growth across most segments during August 2014, led by improved demand. Maruti Suzuki surged by around 5 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 26867.55, up by 229.44 points or 0.86% after trading in a range of 26732.39 and 26900.30. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.57%, while Small cap index up by 1.30%.

The gaining sectoral indices on the BSE were Metal up by 2.79%, Capital Goods up by 2.75%, Realty up by 2.72%, Power up by 2.60%, INFRA up by 2.25% while, FMCG down by 0.67% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 5.79%, Maruti Suzuki up by 4.71%, Tata Power up by 3.62%, Hindalco up by 3.59% and GAIL India up by 3.36%. On the flip side, Sun Pharma Inds. down by 1.46%, ITC down by 1.37%, HDFC down by 1.19%, BHEL down by 0.89% and Tata Motors down by 0.87% 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, consumer 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.

India VIX, a gauge for markets short term expectation of volatility rose 3.53% at  13.53 from its previous close of 13.31 on Thursday. (Provisional)

The CNX Nifty is currently trading at 8027.70, up by 73.35 points or 0.92% after trading in a range of 7984.00 and 8035.00. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 6.44% and Hero MotoCorp up by 5.78% and Maruti Suzuki up by 4.61% and Tata Power up by 4.16% and GAIL India up by 3.77%. On the flip side, Sun Pharma Inds. down by 1.51%, HDFC down by 1.47%, ITC down by 1.34%, BHEL down by 1.00% and Tata Motors down by 0.96% were the top losers.

Europian Markets have turned lower, Germany’s DAX declined by 23.85 points or 0.25% to 9,446.32, France’s CAC decreased by18.13 points or 0.41% to 4,362.91 and UK’s FTSE 100 was down by 7.5 points or 0.11% to 6,812.25.

Asian markets ended mostly in green on Monday, after the regional benchmark index capped its first monthly drop since April. China’s stocks rose, sending the benchmark index to a one-week high, amid speculation that the government will accelerate stimulus after an official gauge of the nation’s manufacturing expanded at a slower pace last month. Growth in China’s vast factory sector slackened in August as foreign and domestic demand slowed, stoking speculation that further policy easing would be needed to prevent the economy from stumbling once more. An index of growth in China’s vast manufacturing sector fell from a 27-month high to 51.1 in August. China’s official Purchasing Managers’ Index (PMI) slipped in August from July’s 51.7 slightly missing the median forecast of 51.2. Japanese capital spending fell to an annual rate of 3.0%, from 7.4% in the preceding quarter. Indonesian Trade Balance rose to a seasonally adjusted 0.13B, from -0.30B in the preceding month while Indonesian Inflation fell to a seasonally adjusted 3.99%, from 4.53% in the preceding month. Thai CPI fell to a seasonally adjusted annual rate of 2.09%, from 2.16% in the preceding month.