Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued to trade firm in late morning session on increased buying by funds and retail investors, amid good going in global markets after European leaders and Russia agreed a plan to end Ukraine’s 10-month war. At present, Sensex and Nifty were trading above the crucial 28,850 and 8,750 levels respectively, with gains of over 0.30%. Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by over half a percent.

Sentiment on the street improved after Finance minister Arun Jaitley said that his government will not let the Delhi election drubbing impact key economic policy changes. Some support also came in with the government statement that it has collected Rs 4.27 lakh crore, or 68.6 percent of budget target for indirect tax, in the April-January period of this fiscal. The budget target for indirect tax collections is Rs 6.23 lakh crore. However, the investors remained concerned about the country’s industrial production growth slowing to 1.7 per cent in December last year and retail inflation rising to 5.11 per cent in January. Besides, lower-than-expected quarterly earnings by some blue chip companies, also negatively impacted the trading sentiment. On global front, Asian stock markets were mostly higher on news of a ceasefire accord in Ukraine, while Sweden's surprising move to cut its main rate into negative territory and hopes of a resolution between debt-strapped Greece and its creditors burnished risk appetite.  Back home, Indian rupee appreciated by 26 paise to 62.05 against the Greenback in early trade on fresh selling of the US dollar by exporters and banks.

Back on street, stocks from Realty, Consumer Durables and IT counters were supporting the markets’ uptrend, while those from Oil & Gas, Power and PSU counters were adding to the underlying cautious undertone. In scrip specific development, shares of Claris Lifesciences rallied after reporting an over five-fold jump in its consolidated net profit at Rs 89.85 crore for the quarter ended December 31, 2014 on back of strong operational performance and onetime gain due to tax credit. On the other hand, shares of Bharat Heavy Electricals (BHEL) have declined after reporting a disappointing set of numbers for the quarter ended December 2014.

The market breadth on BSE was positive, out of 2272 stocks traded, 1335 stocks advanced, while 868 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28894.25, up by 89.15 points or 0.31% after trading in a range of 28835.70 and 28955.03. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.66%, while Small cap index gained 0.72%.

The top gaining sectoral indices on the BSE were Realty up by 1.35%, Consumer Durables up by 1.18%, IT up by 0.57%, TECK up by 0.53% and Auto up by 0.47%, while Oil & Gas down by 0.46%, Power down by 0.12% and PSU down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.80%, Sun Pharma up by 2.26%, Cipla up by 1.77%, TCS up by 1.63% and Hero MotoCorp up by 1.24%. On the flip side, BHEL down by 3.21%, GAIL India down by 2.08%, ONGC down by 1.67%, Tata Motors down by 0.68% and HDFC down by 0.42% were the top losers.

Meanwhile, industrial output growth much in contrast to the new GDP data remained sluggish in December, rising at an annual rate of 1.7 percent compared to the previous month’s 3.8% expansion and 0.1 percent growth in the year-ago period. Along with the quick estimates of IIP for the month of December 2014, the index for November 2014 has undergone the first revision and was revised upwards to 3.9 percent from 3.8 percent previously.

Index of Industrial Production (IIP) with base 2004-05 for the month of December 2014 stood at 182.6. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of December 2014 were at 131.6, 192.9 and 177.6 respectively, with the corresponding growth rates of (-) 3.2%, 2.1% and 4.8% as compared to December 2013.

The cumulative growth in the three sectors during April-December 2014-15 over the corresponding period of 2013-14 has been 1.7%, 1.2% and 10.0% respectively. 13 out of the 22 industry groups in the manufacturing sector have shown positive growth during the month of December 2014 year-on-year, with capital goods output growing by 4.8 per cent as against a dip of 0.4 per cent.

As per Use-based classification, the growth rates in December 2014 over December 2013 were 2.4% in Basic goods, 4.1 percent in Capital goods and 0.1 percent in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 9.0% and 5.7% respectively, with the overall growth in Consumer goods being 0.7%.

Segment-wise, high growth was witnessed in conductor, aluminium (132.9 percent), gems and jewellery (81.8 percent), pens (47.7 percent), leather garments (38.9 percent), air conditioners (20.5 percent), scooters and mopeds (27.9 percent) and plastic machinery including moulding machinery (24.7 percent).

Segment-wise, high negative growth was reported in ship building and repairs (-52.3 percent), wood furniture (-26.5 percent), sugar machinery (-48.6 percent), tractors (- 42.6 percent), computers (- 36 percent), glass sheet (- 31.6 percent), colour TV sets (- 26.6 percent), steel structures (- 24.3 percent) and telephone instruments including mobile phones and accessories(-80.1 percent).

Industrial growth after hitting a five months high in last month once again showed a sluggish trend, though generally the month of December remains slow but lower exports along with a contraction in the mining and quarrying sector mainly impacted the expansion. The growth in consumer durables segment too fell 9%, indicating a slowdown in demand, while consumer non-durables growth remained flat.

The CNX Nifty is currently trading at 8752.90, up by 41.35 points or 0.47% after trading in a range of 8729.65 and 8766.80. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.75%, SBI up by 2.88%, Ultratech Cement up by 2.63%, Sun Pharma up by 2.25% and DLF up by 2.20%. On the flip side, BHEL down by 2.88%, GAIL India down by 2.18%, ONGC down by 1.62%, Kotak Mahindra Bank down by 0.65% and Tata Power down by 0.54% were the top losers.

Asian markets were trading mostly in the green; Straits Times rose 0.11%, FTSE Bursa Malaysia KLCI gained 0.34%, KOSPI Index increased 0.60%, Jakarta Composite added 0.46%, Taiwan Weighted advanced 0.30%, Shanghai Composite surged 1.57% and Hang Seng was up by 0.9%. On the flip side, Nikkei 225 was down by 0.41%.