Benchmarks magnify gains; nifty above 8,600 mark

Indian equity benchmarks extended early gains to continue firm trade in late morning session on continued buying activities by both funds and retail investors amid clamour for rate cut by the Reserve Bank tomorrow after the better-than-expected second quarter GDP growth. Sentiment on the street improved further with the Finance Minister Arun Jaitley’s statement that the government will soon implement a large number of legislative and administrative recommendations of the Financial Sector Reforms Commission (FSLRC), which had suggested a major overhauling of financial sector regulations. However, weak trend in Asian stocks coupled with depreciation in rupee value have limited the gains.

On the sectoral front, stocks from Consumer Durables, FMCG and Banking counters were supporting the markets’ uptrend, while those from Realty, Power and Metal counters were adding to the underlying cautious undertone. In scrip specific development, shares of Spicejet gained, extending its Friday’s 18% surge, after Rakesh Jhunjhunwala's asset management firm Rare Enterprises acquired 1.4% stake in the company through open market. Furthermore, shares of Maruti Suzuki surged after the company registered a rise of 19.50% in its total car sales (Domestic + Export) for the month of November 2014 at 110147 units, as against 92140 units in November 2013.

On global front, Asian markets traded mostly lower on Monday after data showed that manufacturing growth in the region's leader China slowed in November. Back home, Indian rupee weakened by 22 paise to trade at a fresh nine-month low of 62.25 against the US dollar in early trade due to rise in the greenback’s value against other currencies overseas.

The market breadth on BSE was positive, out of 2276 stocks traded, 1254 stocks advanced, while 958 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28756.16 up by 62.17 points or 0.22% after trading in a range of 28809.64 and 28672.73. 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 0.51%, while Small cap index gained 0.27%.

The gaining sectoral indices on the BSE were Consumer Durables up by 3.87%, FMCG up by 1.02%, Bankex up by 0.82%, Auto up by 0.67% and IT up by 0.33% while, Realty down by 0.88%, Power down by 0.75%, Metal down by 0.74%, Oil & Gas down by 0.67% and Capital Goods down by 0.63% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.48%, Axis Bank up by 2.38%, Maruti Suzuki up by 2.30%, Hero MotoCorp up by 1.30% and Dr. Reddys Lab up by 1.07%. On the flip side, BHEL down by 1.68%, Tata Power down by 1.45%, ONGC down by 1.34%, Tata Steel down by 1.04% and Sesa Sterlite down by 0.86% were the top losers.

Meanwhile, dragged down by weak manufacturing, Indian economy grew at 5.3% in July-September quarter of 2014-15 as against 5.7% in the previous quarter, but better than street estimates of around 5% growth. According to data released by the Central Statistics Office (CSO), the economic growth in first half (April-September) of this fiscal stood at 5.5% as compared to 4.9% in the same period in 2013-14. The better than expected numbers were on account of improved performance of mining, power and certain services sectors. The mining sector grew by 1.9% in July-September quarter compared a flat output in same period year-ago. During the first six months of the fiscal, the sector grew by 2% compared a contraction of 2 per cent in corresponding period of 2013-14.

However, manufacturing sector recorded a modest growth of 0.1% in the second quarter of 2014-15, as against a growth of 1.3% in same period of 2013-14. During April-September period, the sector grew by 1.8% compared to a growth of 0.1% in first half of previous fiscal.

Furthermore, the farm sector, which includes agriculture, forestry and fishing, recorded deceleration in growth at 3.2% in second quarter compared to 5%a year ago. During April-September, the sector grew by 3.5% compared to 4.5% in the same period a year ago.

Meanwhile, Electricity, gas and water supply segment grew by 8.7% in second quarter compared to 7.8% in same period last year. During first half of this fiscal, the segment grew by 9.5% compared to 5.8% in six month period of 2013-14.

The community, social and personal services sector grew at 9.6% in second quarter compared to 3.6% in the same period last year. During April-September, the segment grew by 9.4 per cent compared to 6.8 per cent in the six month period of 2013-14. According to the data, the financial services sector grew at 9.5% in second quarter compared to 12.1 per cent in July-September last year. During April-September, the segment grew by 10% compared to 12.5% in first of half of previous fiscal. Importantly, construction sector expanded 4.6% in second quarter of this fiscal as against 4.4% growth in the year-ago period. In April-September, the sector grew by 4.7% compared to a growth of 2.7% in the first half of previous fiscal.

Investments seem to have rebounded with investment activity rising at steady 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 (GFCF), a barometer of investment at current prices is estimated at Rs 8.28 lakh crore in second of this fiscal as against Rs 7.94 lakh crore in second quarter of 2013-14. At constant (2004-05) prices, the GFCF is estimated at Rs 4.98 lakh crore in second quarter of this fiscal as against Rs 4.97 lakh crore in second quarter of 2013-14.

The CNX Nifty is currently trading at 8607.95 up by 19.70 points or 0.23% after trading in a range of 8623.00 and 8583.50. There were 28 stocks advancing against 22 declining on the index.

The top gainers on Nifty were Asian Paints up by 4.09%, Hindustan Unilever up by 2.60%, Axis Bank up by 2.29%, Kotak Mahindra Bank up by 2.04% and Maruti Suzuki up by 1.85%. On the flip side, NMDC down by 2.11%, BHEL down by 1.57%, ONGC down by 1.42%, Tata Power down by 1.34% and Sesa Sterlite down by 1.15% were the top losers.

The Asian markets were mostly in the red: Hang Seng plunged by 1.69%, Taiwan Weighted declined 0.79%, FTSE Bursa Malaysia KLCI lost 2.31%, Straits Times was down by 0.51% and  KOSPI Index decreased by 0.73%.  On the other hand, Shanghai Composite was up by 0.62%, Jakarta Composite was down 0.16% and Nikkei 225 0.68%.