Benchmarks recover from day's low; bounce back into positive territory

Bouncing back from day's low, benchmark equity indices were trading firmly in green, with gains of over quarter of a percent, which took both Sensex and Nifty, above their psychological 25,100 and 7,600 levels respectively. Sentiments got a boost after the industrial output rebounded to a five- year high in October. Industrial output grew by 9.8 per cent in October on the support of robust demand for manufactured products in the festival month compared to just 3.6 per cent in September. However, investors remained cautious ahead of the inflation data for November based on the wholesale price index (WPI) and the consumer price index (CPI), due later in the day. Besides, the rupee again breached the 67-mark by depreciating 18 paise to 67.06 against the dollar in early trade, mainly on strong demand for the American unit from importers and some banks, also weighed on market sentiment. Meanwhile, shares of sugar companies have surged by up to 5% after the government plans to increase the cess on sugar by almost Rs 100 per quintal to fund its ambitious programme of paying Rs 4.50 per quintal directly into the bank accounts of growers. Some buying also witnessed Cement makers after the Competition Appellate Tribunal (CAT) quashed a Competition Commission of India (CCI) order that had imposed a penalty of Rs.6,316.59 crore on the cement makers for alleged cartelisation. On the other hand, shares of automobile companies have came under selling pressure on the report that the National Green Tribunal (NGT) has ordered immediate ban on registration of diesel-run cars in the national capital.

On the global front, Asian equities traded mostly lower in early trade, as concern about crude oil prices and an expected US rate rise by the Federal Reserve later this week kept investors on edge. Besides, China’s decision to loosen its grip on the yuan and allow slow but steady depreciation in recent weeks has added to concerns that the world’s second-biggest economy may be more fragile than expected. Furthermore, US stocks ended sharply lower on Friday with Dow Jones, S&P 500 and Nasdaq down 1.8-2.2% each. Back on street, stocks from Metal, Power and IT counters were supporting the markets’ uptrend, while those from Auto counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Pune-based Kalyani Forge have surged after the report that  the company plans to double turnover to Rs 500 crore in the next 2-3 years by entering a new product range and expansion. On the flip side, shares of Tata Consultancy Services (TCS) have slipped after the company announced that the recent flood in Chennai led to major disruptions in its ability to function.

The market breadth on BSE was positive, out of 2252 stocks traded, 1296 stocks advanced, while 806 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25123.53, up by 79.10 points or 0.32% after trading in a range of 24867.73 and 25131.77. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.64%, while Small cap index up by 0.38%.

The top gaining sectoral indices on the BSE were Metal up by 0.94%, Power up by 0.62%, IT up by 0.56%, TECK up by 0.53% and FMCG up by 0.43%, while Auto down by 0.75% was the sole losing index on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.96%, BHEL up by 1.57%, Sun Pharma Inds. up by 1.43%, Infosys up by 1.20% and Tata Steel up by 1.06%. On the flip side, Tata Motors down by 2.70%, Mahindra & Mahindra down by 1.86%, ONGC down by 1.00%, TCS down by 0.93% and Wipro down by 0.40% were the top losers.

Meanwhile, in a positive surprise, industrial growth accelerated to a five year high of 9.8 percent in October, much higher than the upwardly revised 3.8 per cent in September and a contraction of 2.7 percent in October last year, on the back of a robust growth in consumer products and capital goods during the festive season.

As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, Index of Industrial Production (IIP) with base 2004-05 for the month of October 2015 stood at 181.3, which is 9.8% higher as compared to the level in the month of October 2014. The cumulative growth for the period April-October 2015-16 over the corresponding period of the previous year stands at 4.8%. Industrial production in September was upwardly revised to 3.8%.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of October 2015 stand at 130.0, 188.1 and 201.6 respectively. The cumulative growth in the three sectors during April-October 2015-16 over the corresponding period of 2014-15 has been 2.0%, 5.1% and 5.2% respectively. In term of industries, seventeen out of the twenty two industry groups in the manufacturing sector have shown positive growth during the month of October 2015 as compared to the corresponding month of the previous year.

On the sectoral basis, growth of manufacturing index which occupies 75.52% weightage in the overall index grew by 10.6 percent in October, 2015 against -5.6 percent in the same month last year. Meanwhile, the mining sector growth was at 4.7 percent in October against 4.5 percent in the same month last fiscal. On the flip side, electricity index, which occupies 10.32% weightage in the overall index, slowed down  by 9.0% in October 2015 against 13.7% same month last year.

As per Use-based classification, the growth rates in October 2015 over October 2014 are 4.1% in Basic goods, 16.1% in Capital goods and 6.7% in Intermediate goods.  The Consumer durables and Consumer non-durables have recorded growth of 42.2% and 4.7% respectively, with the overall growth in Consumer goods being 18.4%.

Along with the Quick Estimates of IIP for the month of October 2015, the indices for September 2015 have undergone the first revision to 3.84 percent from 3.6 percent.

The CNX Nifty is currently trading at 7633.60, up by 23.15 points or 0.30% after trading in a range of 7551.05 and 7643.60. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 3.46%, Hindustan Unilever up by 1.86%, BHEL up by 1.78%, Ambuja Cement up by 1.75% and Ultratech Cement up by 1.72%. On the flip side, Tata Motors down by 2.76%, Cairn India down by 1.95%, Mahindra & Mahindra down by 1.89%, TCS down by 0.89% and ONGC down by 0.81% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 was down by 2.14%, Hang Seng down by 1.09% to, Taiwan Weighted down by 0.87%, Jakarta Composite down by 1.1%, KOSPI Index down by 1.22% and FTSE Bursa Malaysia KLCI down by 0.77%. On the flip side, Shanghai Composite was up by 0.46%.