Benchmarks trade marginally higher in early deals on Tuesday

After making a good start, Indian equity benchmarks have pared their initial gains but were managing to remain in the green terrain in early deals on Tuesday, on short covering and value buying at lower levels, following the bloodbath seen in the previous session. Sentiment got some support with Finance Minister’s statement that the economy is in a revival phase and hint that it will clock a growth rate in excess of 8 per cent in 2015-16, after the total indirect tax collections during the first four months of the fiscal rose by 37 per cent. Rupee opened higher against the dollar and was trading at 66.45, up 19 paise at the Interbank Foreign Exchange that too kept supporting the markets. However, gains remained capped on reports that Foreign portfolio investors (FPIs) sold shares worth a net Rs 5275.40 crore August  24, 2015, as per provisional data released by the stock exchanges. The markets are likely to remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month August 2015 series to September 2015 series. The near month August 2015 derivatives contracts are set to expire on Thursday.

Stock specific development, Glenmark was trading higher on plans to launch generic Teneligliptin, a new third-generation oral anti-diabetic drug, at a substantially lower price compared to other Gliptins available in India.

On the global front, US markets ended lower on Monday as investors were rattled about China's economy. The Dow Jones industrial average briefly slumped more than 1,000 points - its most dramatic intraday trading range ever. Asian markets were trading mostly in green, while Shanghai Composite once again plunged.

Back home traders were seen piling up position in Realty, IT, Metal, Bankex and TECK, while selling was witnessed in Power, INFRA, PSU, Consumer Durables and Capital Goods. The market breadth on BSE was negative in the ratio of 689:1131 while 46 scrips remained unchanged. 

The BSE Sensex is currently trading at 25767.46, up by 25.90 points or 0.10% after trading in a range of 25742.54 and 26124.83. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.20%, while Small cap index declined by 0.43%.

The top gaining sectoral indices on the BSE were Realty up by 1.44%, IT up by 0.82%, Metal up by 0.61%, Bankex up by 0.54% and TECK up by 0.53%, while Power down by 1.65%, INFRA down by 1.06%, PSU down by 0.58%, Consumer Durables down by 0.45% and Capital Goods down by 0.45% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.35%, Hindustan Unilever up by 1.98%, Axis Bank up by 1.35%, ICICI Bank up by 1.32% and Vedanta up by 1.12%. On the flip side, NTPC down by 3.79%, GAIL India down by 3.42%, Bharti Airtel down by 1.65%, HDFC down by 1.57% and Hero MotoCorp down by 1.45% were the top losers.

Meanwhile, adding some cheers to the manufacturing sector, the report of the SBI Composite Index has stated that country's manufacturing sector growth improved both in terms of month-on-month as well as yearly basis in August. The yearly SBI Composite Index, an indicator for manufacturing activity in the country, for August increased to 53.1 from 49.7 in the previous month, while the Monthly Index improved to 52.2 in August from 46.7 in July.

The SBI research report though pointed that mining and electricity are still acting as a drag on the economic activity and the upturn was majorly driven by manufacturing. The pickup in economic momentum was supported by positive trends in capital goods sector. As per the report one of the positive developments is the order inflow of four major companies-BHEL, L&T, ABB and Thermax which grew by 5.5% (y-o-y) in the Jun’15 quarter. Furthermore, the Medium & Small companies in Capital Goods (Electrical & Non-Electrical Equipment) are making some in-roads in topline growth. Also, the recent quarter results (Q1FY16) reveal that the capital goods (electrical equipment) reported profit. Looking ahead, it is expected that growth in order inflow in FY16 would be in the range of 15%-17% largely driven by state utilities.

The research report has further stated that looking ahead, it is expected that growth in order inflow in this fiscal would be in the range of 15-17 percent and this would largely be driven by state utilities. Though, it cautioned that pricing pressure still persists in the system due to excess manufacturing capacity and lower opportunities. The report added that, as the government is taking steps in the right direction in terms of policy action, we believe that execution will pick up from second half of fiscal year 2015-2016.

The SBI Composite Index captures two components of the manufacturing cycle namely month-on-month and year-on-year growth on a scale of 0 to 100. An index value of 42 to 46 means (moderate decline), 46 to 50 (low decline), 50 to 52 (low growth), while 52 to 55 means (moderate growth) and above 55 high growth.

The CNX Nifty is currently trading at 7814.80, up by 5.80 points or 0.07% after trading in a range of 7812.95 and 7925.40. There were 25 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.45%, Coal India up by 2.21%, Hindustan Unilever up by 1.94%, Cairn India up by 1.83% and Axis Bank up by 1.65%. On the flip side, GAIL India down by 4.26%, NTPC down by 4.21%, Tata Power down by 2.81%, HDFC down by 2.12% and NMDC down by 1.87% were the top loser

Asian markets were trading in red; FTSE Bursa Malaysia KLCI increased 13.48 points or 0.88% to 1,545.62, KOSPI Index increased 32.93 points or 1.8% to 1,862.74, Straits Times increased 44.16 points or 1.55% to 2,887.55, Nikkei 225 increased 81.59 points or 0.44% to 18,622.27, Jakarta Composite increased 107.45 points or 2.58% to 4,271.18, Taiwan Weighted increased 208.74 points or 2.82% to 7,619.08 and Hang Seng increased 275.93 points or 1.3% to 21,527.50.

On the flip side, Shanghai Composite decreased 138.84 points or 4.33% to 3,071.06.