Benchmarks trade in green; Capital Goods, Realty lead

Indian equity markets continued their trade in green in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on positive note on expectations that RBI is set to cut interest rates on Tuesday for the third time this year as inflation has eased enough to allow the central bank to provide more help for an economy seen struggling with patchy economic growth. Investors maintained optimistic approach on government beating its own target of containing Fiscal deficit, gap between government’s expenditure and revenue, at 3.99% of GDP, lower than the downwardly revised estimate of 4.1% provided in the government’s first full Budget of FY15-16.

Traders were seen piling position in Capital Goods, Realty and FMCG stocks while selling was witnessed in Infra, Bankex and Consumer Durables sectors stocks. In scrip specific development, shares of Sun Pharmaceutical Industries were trading weak after the company’s fourth quarter earnings came below market expectations. The pharma major posted a consolidated net profit of Rs 888.05 crore for the fourth quarter ended March 31, mainly due to Ranbaxy merger impact and price erosion in some products in the US.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,400 and 27,800 levels respectively. The market breadth on BSE was negative in the ratio of 1240:1306 while 120 scrips remained unchanged.

The BSE Sensex is currently trading at 27879.34, up by 50.90 points or 0.18% after trading in a range of 27737.58 and 27959.43. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.09%, while Small cap index up by 0.12%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.82%, Realty up by 1.70%, FMCG up by 0.87%, Power up by 0.48%, Oil & Gas up by 0.47% while, INFRA down by 0.53%, Bankex down by 0.30%, Consumer Durables down by 0.22%, TECK down by 0.15%, Auto down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.65%, Maruti Suzuki up by 2.63%, Reliance Industries up by 2.62%, Cipla up by 2.53% and Hindustan Unilever up by 1.83%.

On the flip side, Sun Pharma down by 8.39%, ONGC down by 2.00%, Bharti Airtel down by 1.90%, Tata Motors down by 1.33% and Axis Bank down by 1.11% were the top losers.

Meanwhile, boosting further signs of recovery in the Indian economy after a good GDP data, Indian manufacturing activity rose at its fastest pace in four months in May as domestic demand rocketed despite rising costs for firms and consumers. The HSBC Manufacturing Purchasing Managers' Index, compiled by Markit, rose to 52.6 in May from April's 51.3 and pp to a four-month high, signaling a further improvement in business conditions. An index monitoring new business, which highlights underlying demand, jumped to 54.3 in May from 51.9.

Manufacturing sector gathered pace in May, with levels of production and new orders rising at the fastest rates since the opening month of 2015. It was the nineteenth month running that manufacturing output increased, with the rate of growth marked and the fastest since January.

The report noted a further increase in input costs and, consequently, charges were raised following a decline seen in the preceding month. Following a reduction seen in the previous month, output prices were raised in May. Underpinning higher output was improved demand from the domestic and foreign markets. The total volume of new work received increased for the nineteenth successive month and at the quickest pace since January. Growth was led by capital goods producers.

Though, despite the uptick in growth, manufacturing employment was broadly unchanged in May, while stock holdings were accumulated. Pre-production inventories increased for the twelfth straight month, albeit modestly. Holdings of finished goods also rose stock building attempts reflected the need to fulfill existing orders.

The report ahead of a possible interest rate cut by the Reserve Bank of India (RBI) in its policy review wills the India Inc. in an upbeat mood, as both output and new order growth accelerated to four-month highs, though rise in export orders lost traction and outlook remains unclear with stagnant jobs market.

The CNX Nifty is currently trading at 8440.55, up by 6.90 points or 0.08% after trading in a range of 8405.40 and 8467.15. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.83%, Larsen & Toubro up by 2.73%, Maruti Suzuki up by 2.60%, Cipla up by 2.23% and Tata Power up by 2.01%.

On the flip side, Sun Pharma down by 8.47%, HCL Tech. down by 3.52%, Lupin down by 2.65%, ONGC down by 2.05% and Bharti Airtel down by 1.97% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 75.38 points or 0.78% to 9,625.69, Jakarta Composite decreased 26.3 points or 0.5% to 5,190.08, KOSPI Index decreased 12.43 points or 0.59% to 2,102.37 and FTSE Bursa Malaysia KLCI decreased 4.87 points or 0.28% to 1,742.65.

On the other hand, Nikkei 225 increased 6.72 points or 0.03% to 20,569.87, Hang Seng increased 172.97 points or 0.63% to 27,597.16 and Shanghai Composite increased 216.99 points or 4.71% to 4,828.74.

Singapore’s Straits Times was closed today on account of ‘Vesak Day’ holiday.

The European markets were trading in green; UK’s FTSE 100 increased 7.33 points or 0.1% to 6,991.76, Germany’s DAX increased 14.79 points or 0.13% to 11,428.61 and France’s CAC increased 23.53 points or 0.47% to 5,031.42.