Markets continue to trade firm in early noon session

Indian equity benchmarks continued to trade firm in early noon session on the back of value buying by fund and retail investors in the select blue chips counters amid recovery in the Asian markets. Sentiment got boost with the India’s core sector growth hitting a 16-month high in March, marking a strong end to FY16 and pointing to a possible industrial recovery ahead of the new financial year. India's core sector expanded 6.4% in March, higher than 5.7% in February. The eight sectors that make up core sectors index - coal, crude oil, natural gas, refinery products, fertilsiers, steel, cement and electricity - together have a 38% weight in the Index of Industrial Production (IIP). This suggests industrial production growth could rise further from 2% in February. Besides, encouraging auto sales numbers in April also triggered buying in the markets. Some support also came with the Commerce and Industry Minister Nirmala Sitharaman’s statement that the foreign direct investment (FDI) in India increased to $37.53 billion during April-February period of the last fiscal year. It was $30.93 billion in 2014-15. 

On the global front, Asian markets were trading mixed amid dip in oil prices and weakening of the US dollar. Back home, in scrip specific development, share of BGR Energy Systems has rallied over 14% after the company has executed agreement with Hitachi, Japan and Hitachi Power Europe GmbH (HPE), Germany to settle their disputes. Rolta India has soared over 12% after the company has won seven year, multi-million pound contract from UK Power Networks to manage and update their spatially-enabled network asset information. The market breadth was positive as 1488 stocks were advancing while 783 were declining.

The BSE Sensex is currently trading at 25557.26, up by 120.29 points or 0.47% after trading in a range of 25477.84 and 25705.96. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.89%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.44%, Realty up by 1.35%, Power up by 1.33%, Auto up by 1.02% and Metal up by 0.61%, while IT down by 0.30%, FMCG down by 0.27% and Consumer Durables down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 2.78%, Tata Motors up by 2.63%, Bharti Airtel up by 2.54%, Asian Paints up by 2.49% and Larsen & Toubro up by 2.37%. On the flip side, Sun Pharma down by 1.35%, Dr. Reddys Lab down by 1.14%, Lupin down by 1.04%, TCS down by 0.82% and Coal India down by 0.78% were the top losers.

Meanwhile, making a strong end for the financial year 2015-16 and pointing to a possible industrial recovery ahead of the new financial year, the core sector growth in the country has jumped to 16-month high in the month of March. The eight core sector industries grew to 6.4 percent in the month of March. The eight industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel have a weight of 38 percent in the overall Index of Industrial Production (IIP) had shrunk to (-) 0.7 percent in March last year. During the fiscal 2015-16 as a whole, the eight core sectors grew by 2.7 percent, while it had expanded by 4.5 per cent in 2014-15. The March 2016 performance is the best since November 2014, when these sectors had expanded by 6.7 per cent.

According to data released by the ministry of commerce and industry, the combined Index of Eight Core Industries stood at 188.0 in March, 2016, which was 6.4 percent higher compared to the index of March, 2015. Its cumulative growth during April to March, 2015-16 was 2.7 percent. Out of eight sector, only two sectors posted negative output growth in March.

Among the eight sectors, four sectors registered a double digit growth. Petroleum Refinery production having weight age of 5.94 percent increased by 10.8 percent in March, 2016 over March, 2015. Its cumulative index during April to March, 2015-16 increased by 3.8 percent over the corresponding period of previous year.  Fertilizer production having 1.25 percent weight increased by 22.9 percent in March, 2016 over March, 2015. Its cumulative index during April to March, 2015-16 increased by 11.3 percent over the corresponding period of previous year. Cement production having weight age of 2.41 percent increased by 11.9 percent in March, 2016 over March, 2015. Its cumulative index during April to March, 2015-16 increased by 4.6 percent over the corresponding period of previous year. Electricity generation having weight 10.32 percent increased by 11.3 percent in March, 2016 over March, 2015. Its cumulative index during April to March, 2015-16 increased by 5.2 percent over the corresponding period of previous year.

Besides, Coal production having weight 4.38 percent increased by 1.7 percent in March, 2016 over March, 2015. Its cumulative index during April to March, 2015-16 increased by 4.6 percent over corresponding period of previous year. Steel production having weight age of 6.68 percent increased by 3.4 percent in March, 2016 over March, 2015. Its cumulative index during April to March, 2015-16 declined by 1.4 percent over the corresponding period of previous year.

On the other side, Crude oil and natural gas were the two sectors that suffered a fall in production in March. Crude Oil production having weight 5.22 percent decreased by 5.1 percent in March, 2016 over March, 2015. Its cumulative index during April to March, 2015-16 decreased by 1.4 percent over the corresponding period of previous year. The Natural Gas production having 1.71 percent weight decreased by 10.5 percent in March, 2016 over March, 2015. Its cumulative index during April to March, 2015-16 declined by 4.2 percent over the corresponding period of previous year.

The pick-up in the momentum of core sector growth in March was a ‘positive surprise’ and a favorable base effect as well as the pick-up in the pace of expansion of the core sector and automobile production augur well for a mild improvement in IIP growth in March.

The CNX Nifty is currently trading at 7845.40, up by 39.50 points or 0.51% after trading in a range of 7820.95 and 7890.25. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 4.77%, Tata Power up by 4.13%, Tata Motors - DVR up by 4.08%, Adani Ports &Special up by 3.16% and Bharti Airtel up by 2.60%. On the flip side, Sun Pharma down by 1.43%, Dr. Reddys Lab down by 1.28%, Lupin down by 1.14%, Kotak Mahindra Bank down by 0.95% and Coal India down by 0.87% were the top losers.

Asian Markets were trading mixed; KOSPI Index increased 8.26 points or 0.42% to 1,986.41, Jakarta Composite increased 21.03 points or 0.44% to 4,829.35, Shanghai Composite increased 41.43 points or 1.41% to 2,979.76, while Hang Seng decreased 239.06 points or 1.13% to 20,827.99, Taiwan Weighted decreased 83.78 points or 1% to 8,294.12 and FTSE Bursa Malaysia KLCI decreased 21.58 points or 1.29% to 1,651.14.