Benchmarks trade firm at highest point of the day

Indian equity benchmarks continued its firm trade hovering near the highest point of the day in the late afternoon session on account of buying in frontline blue chip stocks. The sentiments were on optimistic note after the government yesterday stuck to its fiscal deficit target in the Union Budget for the year starting April 1, raising hopes the pledge would spark a move by the Reserve Bank of India to cut key policy rates. A commitment by Finance Minister Arun Jaitley to meet the fiscal deficit target of 3.5% of the gross domestic product is also raising hopes and confidence among foreign investors after heavy selling this year. Traders were seen piling position in FMCG, Auto and IT sector stocks. In scrip specific development, ITC was trading firm after foreign brokerage firm upgraded the stock to outperform and also raised its target price.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,150 and 23,700 levels respectively. The market breadth on BSE was positive in the ratio of 1849:575, while 109 scrips remained unchanged.

The BSE Sensex is currently trading at 23704.25, up by 702.25 points or 3.05% after trading in a range of 23133.18 and 23706.32. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 2.44%, while Small cap index up by 2.59%.

The gaining sectoral indices on the BSE were FMCG up by 4.78%, Auto up by 3.82%, IT up by 3.39%, Bankex up by 3.19%, Consumer Durables up by 3.14%.

The top gainers on the Sensex were ITC up by 9.87%, ICICI Bank up by 7.21%, Hero MotoCorp up by 6.81%, Maruti Suzuki up by 6.20% and Adani Ports & Special up by 4.95%.

On the flip side, ONGC down by 2.06%, Hindustan Unilever down by 0.28% and Dr. Reddy’s Lab down by 0.21% were the top losers.

Meanwhile, India’s manufacturing sector growth expanded for a second consecutive month in February at a stable pace driven by new orders, exports, output and purchasing activity all rising in the month. However, a faster expansion in new business inflows failed to lift growth of output. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) held steady at 51.1 in February, same as January’s reading after it fell below that level in December for the first time in over two years. A figure above 50 represents expansion while a reading below this level means contraction.

According to the survey, new orders expanded at their fastest pace in five months in February, with the sub-index rising to 52.3 from 51.7. Foreign demand also rose, though at a slower pace. On the price front, input prices climbed for the fifth month running in February but at the weakest pace in that time, while factory gate prices fell for the first time since September. Employment contracted slightly in February, after hovering just above the 50-mark in the previous four months.

The survey further highlighted that the manufacturers raised their production volumes in February, but, the rate of expansion eased from the preceding month. While underlying demand continued to improve and new business from abroad also rose, February saw a loss of growth momentum. For the first time in five months in February firms lowered their selling prices, underpinned by a softer increase in input costs and as part of efforts to secure new work.

In the month of February, goods producers continue to benefit from lower crude oil prices in global markets, which put a brake on inflationary pressures. In light of these numbers, the RBI has scope to loosen monetary policy to spur the economy.

The CNX Nifty is currently trading at 7192.90, up by 205.85 points or 2.95% after trading in a range of 7035.10 and 7196.85. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were ITC up by 9.93%, ICICI Bank up by 7.08%, Hero MotoCorp up by 6.68%, Maruti Suzuki up by 6.47% and Vedanta up by 5.03%.

On the flip side, ONGC down by 2.60%, Dr. Reddy’s Lab down by 0.49% and Hindustan Unilever down by 0.30% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 13.46 points or 0.81% to 1,668.21, Shanghai Composite increased 45.19 points or 1.68% to 2,733.17, Nikkei 225 increased 58.75 points or 0.37% to 16,085.51, Taiwan Weighted increased 74.53 points or 0.89% to 8,485.69 and Hang Seng increased 295.53 points or 1.55% to 19,407.46.

On the other hand, Jakarta Composite decreased 2.56 points or 0.05% to 4,768.40. South Korean stock exchange was closed on account of ‘Independence Movement Day’ holiday.

The European markets were trading in green; UK’s FTSE 100 increased 13.64 points or 0.22% to 6,110.73, France’s CAC increased 13.84 points or 0.32% to 4,367.39 and Germany’s DAX increased 100.04 points or 1.05% to 9,595.44.