Jubilation continues on Dalal Street in noon deals

Indian equity benchmarks continue to trade jubilantly in noon deals with frontline gauges recapturing their crucial 25,500 (Sensex) and 7,800 (Nifty) levels. Sentiments remained up-beat on above normal monsoon forecast after two straight years of drought while easing inflation and rebound in industrial output also boosted sentiment. Global cues too remained supportive with all the Asian equities were trading in green terrain at this point of time after upbeat Chinese trade data offered hope that the economy was stabilising, underpinning both risk sentiment and commodity prices.

Closer home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. Buying in banking stocks too aided sentiments on hopes that credit growth would pick up after data showed a rebound in industrial output in February. FMCG majors ITC and HUL too were trading with traction on hopes that good monsoon this year would boost volume growth going forward. The market breadth on the BSE was positive; there were 1,677 shares on the gaining side against 742 shares on the losing side while 132 shares remain unchanged.

The BSE Sensex is currently trading at 25557.34, up by 411.75 points or 1.64% after trading in a range of 25358.42 and 25579.17. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.29%, while Small cap index up by 1.33%.

The top gaining sectoral indices on the BSE were Auto up by 2.93%, Basic Materials up by 2.59%, Metal up by 2.48%, Bankex up by 2.38% and Realty up by 2.27%, while there were no losers on the index.

The top gainers on the Sensex were Mahindra & Mahindra up by 6.91%, ICICI Bank up by 5.27%, Tata Motors up by 3.56%, Tata Steel up by 2.98% and Maruti Suzuki up by 2.75%. On the flip side, GAIL India down by 0.97% and Infosys down by 0.19% were the top losers.

Meanwhile, in a pleasant surprise, India's industrial production growth bounced back into positive zone in February, reversing three months of contraction and adding to the recent flow of positive data that suggests an upturn in the economy. The Index of Industrial Production (IIP) rose 2 percent in February from a year ago, compared with 1.5 percent decline in the previous month, due to strong performance by mining and electricity sectors.

As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, IIP with base 2004-05 for the month of February 2016 stood at 184.6, which was 2.0 percent higher as compared to the level in the month of February 2015. The cumulative growth for the period April-February 2015-16 over the corresponding period of the previous year stood at 2.6 percent.

On the sectoral basis, the growth of manufacturing index which occupies 75.52 percent weightage in the overall index crawled to 0.7 percent in the month of February as against -2.8 percent in January 2016. Industrial growth got a boost from 9.6 percent increase in electricity generation as against 6.6 percent in January and strong 5 percent increase in mining output as against 1.2 percent in the month of January.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of February 2016 stood at 136.1, 194.1 and 181.9 respectively, with the corresponding growth rates of 5.0 percent, 0.7 percent and 9.6 percent as compared to February 2015. The cumulative growth in these three sectors during April

February 2015-16 over the corresponding period of 2014-15 has been 2.4 percent, 2.3 percent and 5.1 percent respectively. In terms of industries, sixteen out of the twenty two industry groups in the manufacturing sector have shown positive growth during the month of February 2016 as compared to the corresponding month of the previous year.

As per Use-based classification, the growth rates in February 2016 over February 2015 are 5.4 percent in Basic goods, (-) 9.8 percent in Capital goods and 5.7 percent in Intermediate goods.  The Consumer durables and Consumer non-durables have recorded growth of 9.7 percent and (-) 4.2 percent respectively, with the overall growth in Consumer goods being 0.8 percent.

Power generation accelerated, growing 9.6 per cent compared with 5.9 per cent growth a year earlier. The output of consumer durable goods grew 9.7 per cent in February as against a contraction of 3.8 per cent in the same month a year ago. However, capital goods, a barometer for investment flow, contracted 9.8 per cent in February compared with a growth of 8.3 per cent in the year-ago period.

Industrial output number is definitely positive but capital goods output continues to be disappointing which raises a question mark on the sustainability of the recovery unless investment demand picks up.

The CNX Nifty is currently trading at 7832.60, up by 123.65 points or 1.60% after trading in a range of 7772.20 and 7842.95. There were 48 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 7.10%, Hindalco up by 5.43%, ICICI Bank up by 5.11%, Ultratech Cement up by 4.25% and Tata Motors up by 3.51%. On the flip side, GAIL India down by 0.96%, Adani Ports &Special down by 0.15% and Infosys down by 0.14% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 4.25 points or 0.25% to 1,719.25, Jakarta Composite rose 6.07 points or 0.13% to 4,835.64, KOSPI Index advanced 10.95 points or 0.56% to 1,981.32, Shanghai Composite soared 47.75 points or 1.58% to 3,071.40, Taiwan Weighted surged 120.9 points or 1.42% to 8,652.08, Nikkei 225 added 452.43 points or 2.84% to 16,381.22 and Hang Seng was up by 494.72 points or 2.41% to 20,999.16.