Benchmarks continue firm trade; Nifty surpasses 7,850 mark

Indian equity markets continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters. The sentiments got some support after the government’s chief economic adviser Arvind Subramanian stated that India does not need further fiscal stimulus to revive the economy, despite GDP growth seen at the lower end of an 8.1% to 8.5% target in the current financial year. He added that the government will and must meet a fiscal deficit target of 3.9% of GDP in the current fiscal year. Traders were seen piling position in Bankex, Consumer Durables and Realty stocks while selling was witnessed in Power and Auto sector stocks. In the scrip specific development, Visa Steel was trading firm on reports that the lenders to Kolkata-based company have decided to convert a large portion of their loans into equity using the Reserve Bank of India’s (RBI) strategic debt restructuring (SDR) scheme. The market may remain volatile as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. September 2015 series to next month i.e. October 2015 series. The near month September 2015 derivatives contracts will expire on Thursday i.e. September 24, 2015.

On the global front, the Asian markets were trading in red, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,850 and 25,800 levels respectively. The market breadth on BSE was positive in the ratio of 1382:1077 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 25847.37, up by 195.53 points or 0.76% after trading in a range of 25386.48 and 25869.91. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.34%, while Small cap index up by 0.58%.

The gaining sectoral indices on the BSE were Bankex up by 1.27%, Consumer Durables up by 1.16%, Realty up by 1.10%, FMCG up by 0.74% and Oil & Gas up by 0.71% while, Power down by 0.18% and  Auto down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.76%, Mahindra & Mahindra up by 2.32%, ITC up by 1.91%, HDFC Bank up by 1.69% and Coal India up by 1.57%.

On the flip side, Tata Motors down by 1.35%, BHEL down by 1.34%, Wipro down by 0.77%, GAIL India down by 0.60% and Bajaj Auto down by 0.49% were the top losers.

Meanwhile, presenting a mixed trend the SBI Composite Index, showing country's manufacturing sector growth, improved in September on yearly basis, while its monthly index showed a sharp decline. The yearly SBI Composite Index for September 2015 was at a four month high at 53.9 as compared to last month index of 53.4. However, the Monthly Index declined to 48.4 in September from 53.1 in August. SBI report said index growth is expected to be 7.8 per cent year-on-year and -3.2 per cent month-on-month.

The SBI research report though pointed that mining and electricity are still acting as a drag on the economic activity and the upturn has majorly been driven by manufacturing. The pickup in economic momentum was supported by positive trends in capital goods sector. As per the report positive developments have been seen as the credit growth in some industries like drugs & pharmaceuticals, petrochemicals, basic metals, iron & steel, and the power sector. IIP is also driven majorly by manufacturing (particularly capital goods) as revealed by higher ex-mining and ex-electricity growth.

The SBI research report further stated that it is positive momentum for the road sector to come over the next 18 months or so. The government plans to develop a total of 66,117 km of roads under different programmes, such as the National Highways Development Project (NHDP), Special Accelerated Road Development Programme in North-East (SARDP-NE) and Left Wing Extremism (LWE), and has set an objective of building 30 km of road a day from 2016.

SBI based on its internal loan portfolio and data available in the public domain, has developed a conservative yet forward-looking economic indicator - the SBI Composite Index - for tracking manufacturing activity in the country and aims to forecast the periods of contraction and expansion. 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 7857.85, up by 45.85 points or 0.59% after trading in a range of 7723.25 and 7863.70. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 3.35%, Vedanta up by 3.19%, Mahindra & Mahindra up by 2.28%, IndusInd Bank up by 2.01% and ITC up by 1.92%.

On the flip side, NMDC down by 3.86%, Bosch down by 2.72%, Power Grid down by 2.71%, HCL Tech down by 1.61% and Tata Motors down by 1.27% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 493.67 points or 2.26% to 21,302.91, Taiwan Weighted decreased 172.5 points or 2.06% to 8,193.42, Jakarta Composite decreased 97.19 points or 2.24% to 4,246.85, Shanghai Composite decreased 69.73 points or 2.19% to 3,115.89, KOSPI Index decreased 37.42 points or 1.89% to 1,944.64, Straits Times decreased 27.73 points or 0.97% to 2,840.74 and FTSE Bursa Malaysia KLCI decreased 20.25 points or 1.24% to 1,615.12.

Japan stock exchange was closed on account of ‘Autumn Equinox’ holiday.

The European markets were trading in green; UK’s FTSE 100 increased 48.26 points or 0.81% to 5,984.10, France’s CAC increased 23.04 points or 0.52% to 4,451.55 and Germany’s DAX increased 67.37 points or 0.7% to 9,638.03.