Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued to trade firm in late morning session on the back of value-buying in blue-chip stocks amid covering-up of short positions by speculators ahead of the monthly derivatives expiry on Thursday. The broader markets tailed the gains seen on the benchmark indices with the BSE midcap and smallcap indices climbing 0.38 and 0.60 per cent, respectively. Among the sectoral indices, the BSE Auto index was the top gainer, surging about a percent. Sentiments got a boost after World Bank chief economist Kaushik Basu indicated that the bank may revise its GDP growth projection for India after it goes for a stock-taking in a few months. He also added that the recession in Brazil and Russia and slowdown in China have made India the leading economy in terms of growth prospects for the first time this year. Some support also came with the report that India could become the world's third largest economy after 2030 and its ascension could see France and Italy kicked out of the exclusive G8 group or its membership increased to 10 to accommodate India and Brazil. India's projected GDP in 2030 was $10,133 billion, behind America's $32,996 billion and China at the top with a projected GDP of $34,338 billion. However, investor remained cautious with Ficci’s report, which indicates that the revival prospects for India's manufacturing sector in the October-December quarter seem to be weakening mainly due to a sluggish exports scenario. Exports are primarily responsible for this less optimistic outlook besides domestic factors like poor demand conditions, high interest costs etc. Meanwhile, markets are expected to remain volatile ahead of the expiry of December derivatives contracts, as traders roll-over positions from December 2015 to the January 2016 series.

On the global front, Asian stocks were trading mixed on Monday amid lack of immediate directional cues in light year-end trade, although Japanese shares managed to rise following a rebound in crude oil prices from multiple-year lows. Back home, stocks from Realty, Consumer Durables and Oil & Gas counters were supporting the markets’ uptrend, while those from FMCG, IT and TECK counters were adding to the underlying cautious undertone.

In scrip specific development, shares of Tube Investments of India have surged after the report that the company will sell 14% of its stake in Cholamandalam MS General Insurance (Chola MS) to its joint venture partner, Mitsui Sumitomo Insurance (MSI) for Rs 883 crore. Furthermore, SMS Pharmaceuticals has rallied after the company has received approval from the US Food and Drug Administration (FDA) for an Andhra Pradesh-based manufacturing facility.

The market breadth on BSE was positive, out of 2388 stocks traded, 1478 stocks advanced, while 754 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25970.35, up by 131.64 points or 0.51% after trading in a range of 25856.86 and 25991.08. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index up by 0.60%.

The top gaining sectoral indices on the BSE were Auto up by 0.93%, IT up by 0.63%, FMCG up by 0.62%, Power up by 0.52% and TECK up by 0.49%, while Metal down by 0.25% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Motors up by 2.41%, ICICI Bank up by 1.67%, NTPC up by 1.40%, Sun Pharma Inds. up by 1.33% and Hindustan Unilever up by 1.01%. On the flip side, Tata Steel down by 1.61%, Bharti Airtel down by 1.00%, Asian Paints down by 0.31%, HDFC down by 0.20% and Axis Bank down by 0.17% were the top losers.

Meanwhile, Federation of Indian Chambers of Commerce and Industry (Ficci) in its latest quarterly survey has indicated that due to sluggish exports scenario, the revival prospects for India's manufacturing sector in the October-December quarter of the ongoing fiscal seem to be weakening down, as a lesser percentage of respondents expect high growth to continue in the quarter under review.

Ficci in its survey has said that the percentage of respondents expecting higher growth in the December quarter has gone down to 55 per cent as compared to 63 per cent for the previous quarter, adding that exports are primarily responsible for this less optimistic outlook,  besides domestic factors like poor demand conditions, high interest costs. The export outlook for manufacturing in the third quarter followed its trajectory downwards, as the proportion of respondents expecting higher exports in the quarter is 24 per cent as compared to 36 per cent in the September quarter and 33 per cent in April-June of the current fiscal.

The survey pointed that in terms of order books indicating a muted demand conditions, 44 per cent respondents reported higher order books for the October-December quarter which is almost the same as that of the previous quarter. Besides, in terms of investment 68 per cent respondents in the third quarter said that they do not have any plans for capacity additions for the next six months as compared to 73-75 per cent in the previous quarters, implying slack in the private sector investments in manufacturing to continue. Poor demand conditions, high cost of borrowing, delayed clearances and cost escalation are some of the major constraints which are affecting the expansion plans of the respondents.

Further, the survey gauges the expectations of manufacturers for the third quarter for twelve major sectors namely textiles, capital goods, metals, chemicals, cement and ceramics, electronics, auto, leather and footwear, machine tools, food, tyre and textiles machinery.

The CNX Nifty is currently trading at 7899.15, up by 38.10 points or 0.48% after trading in a range of 7863.00 and 7904.95. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.30%, Tata Power up by 2.18%, ICICI Bank up by 1.71%, Sun Pharma up by 1.44% and NTPC up by 1.22%. On the flip side, Tata Steel down by 1.50%, Idea Cellular down by 1.27%, Bharti Airtel down by 1.06%, Hindalco down by 0.41% and Axis Bank down by 0.32% were the top losers.

Asian markets were showing mixed trend, Taiwan Weighted was up by 0.04%, FTSE Bursa Malaysia KLCI gained 0.61%, Jakarta Composite was higher by 0.58% and Nikkei 225 was up by 0.67%. On the other hand, Hang Seng was down by 0.41%, KOSPI Index declined by 1.08% and Shanghai Composite was lower by 0.2%.