Markets come off the day's high; trade with gain of over 0.50%

The Indian markets despite coming off the highs of the day were managing to trade with good gains, on the back of twin upbeat macro data of IIP and CPI inflation. The early euphoria was generated on hopes of rate cuts, as the CPI numbers should give comfort to the central bank ahead of its 29 September policy review. Also there were some talks of the US Fed might delaying its plan to hike interest rates to December considering a depreciating yuan. However, there was some concern in the markets that has restricted further gains, pulling the benchmarks in a range, as the government's biggest tax reform Goods and Services Tax (GST) proposal is yet to be passed and the monsoon session of the parliament ending today mostly non-productive.  Trade was also impacted the depreciation in Indian rupee, which after showing some recovery in early trade and bouncing back from its five days continuous plunge, has reversed early gains to slip near the key 65 per dollar mark against the US dollar. Selling in the rupee has intensified over the last three days following China's unexpected devaluation of its currency. Back on street, the consumer durable gauge was maintaining its lead after IIP data showed sharp rebound of 16% in consumer durables segment, which witnessed contraction in 10 of the 12 months through July. The other sectors that were keeping the markets higher were healthcare and rate sensitive banking and auto.

There was some buzz in the healthcare stocks especially pharma, as in order to facilitate domestic manufacture of quality medical products, the Cabinet Committee on Economic Affairs (CCEA) has approved a proposal for strengthening and upgrading the drug regulatory system both at the Central and state level.

The BSE Sensex is currently trading at 27658.18, up by 145.92 points or 0.53% after trading in a range of 27614.40 and 27791.10. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices too were trading with good gains; the BSE Mid cap index was up by 0.96%, while Small cap index was higher by 0.43%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.75%, Bankex up by 0.89%, INFRA up by 0.80%, PSU up by 0.78%, Auto up by 0.78%, while Metal down by 1.21%, Capital Goods down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Lupin up by 2.81%, Bharti Airtel up by 2.73%, Cipla up by 2.69%, SBI up by 1.93% and Coal India up by 1.44%. On the flip side, Tata Steel down by 3.31%, Vedanta down by 2.72%, Hindalco down by 2.55%, GAIL India down by 2.10% and Wipro down by 1.15% were the top losers.

Meanwhile, in an encouraging development, the index for industrial output (IIP), expanded at a 4-month high of 3.8 percent in June, above the street expectations and also higher compared to downwardly revised 2.5 percent in May (earlier estimate of 2.7%). The rise in factory output was mainly on the back of pick up in government spending and improvement in manufacturing activity. The manufacturing sector which constitutes over 75 percent of the index, grew at 4.6 percent in June compared to 2.9 percent in the same month last year.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of June 2015 stand at 121.7, 188.4 and 184.0 respectively, with the corresponding growth rates of -0.3%, 4.6% and 1.3% as compared to June 2014. The cumulative growth in the three sectors during April-June 2015-16 over the corresponding period of 2014-15 has been 0.7%, 3.6% and 2.3% respectively. In terms of industries, 16 out of 22 industry groups (as per 2-digit NIC-2004) in the manufacturing sector showed positive growth during the month of June 2015 as compared to the corresponding month of the previous year.

The Quick Estimates of Index of Industrial Production (IIP) with base 2004-05 for the month of June 2015 released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation stands at 178.5, which was 3.8% higher as compared to the level in the month of June 2014, while the cumulative growth for the period April-June 2015-16 over the corresponding period of the previous year stands at 3.2%.

As per Use-based classification, the growth rates in June 2015 over June 2014 were 5.1% in Basic goods, - 3.6% in Capital goods and 0.8% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 16.0% and 1.3% respectively, with the overall growth in Consumer goods being 6.6%.

The growth in factory output was led by the manufacturing sector, sharp rebound in consumer durables segment, which witnessed contraction in 10 of the 12 months through July, showed that economy is on recovery path. The Finance Minister Arun Jaitley too said that the growth in manufacturing lead by consumer durables and basic goods is a positive development for the economy and it shows that the economy is firmly on the growth path.

The CNX Nifty is currently trading at 8392.55, up by 43.10 points or 0.52% after trading in a range of 8339.75 and 8429.50. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Lupin up by 2.60%, Cipla up by 2.59%, Bharti Airtel up by 2.50%, BPCL up by 2.05% and SBI up by 1.93%. On the flip side, Tata Steel down by 3.43%, NMDC down by 3.15%, Vedanta down by 2.77%, Hindalco down by 2.55% and GAIL India down by 2.04% were the top losers.

All the Asian markets were trading in green, Shanghai Composite was up by 4.36 points or 0.11% to 3,890.68, KOSPI Index increased 7.99 points or 0.4% to 1,983.46, FTSE Bursa Malaysia KLCI was higher by 16.19 points or 1.01% to 1,626.12, Taiwan Weighted added 28.36 points or 0.34% to 8,311.74, Straits Times was up by 35.82 points or 1.17% to 3,097.31, Jakarta Composite gained 87.99 points or 1.96% to 4,567.48, Hang Seng was higher by 120.29 points or 0.5% to 24,036.31 and Nikkei 225 surged by 202.78 points or 0.99% to 20,595.55.