Benchmarks extend gains; trade near intra-day high levels

Indian equity markets gave thumbs up to the manufacturing PMI numbers and are currently trading at the high point of day on the back of buying interest across some blue chip counters. For the fifth consecutive month, business conditions throughout India’s manufacturing industry rebounded. The Nikkei India Manufacturing Purchasing Managers’ Index slightly rose to 50.7 in May from April’s 50.5. Domestic sentiment was also buoyed by the report that macro-economic indicators such as GDP numbers and core sector growth showed that the country’s economy gained momentum. India’s GDP grew 7.6% in the year ended March, outstripping previous leader China and faster than last year's 7.2%. January-March growth sped up to 7.9% from the preceding quarters, suggesting that despite the caveats, India will remain an island of relative prosperity in a world afflicted by economic uncertainty. Indicating yet another better tiding for the economy, Core sector production continued on its positive trajectory for the fifth straight month, with April growth accelerating the fastest in 17 months at 8.5%.  Core sector output has been growing steadily from December, with monthly readings being 0.9%, 2.9%, 5.7% and 6.4%, respectively, through March.  Some support also came with agricultural Minister Radha Mohan Singh’s statement that the farm sector growth will be good in 2016-17 with the country expected to receive normal monsoon rains this year after two consecutive drought years.

On the global front, Asian markets were uneven on Wednesday as a slip in crude oil prices dampened investors’ appetite for riskier assets, while the recently bullish dollar stalled against the euro and yen following a mixed bag of US economic data. Sentiments remained subdued after mixed reports on China's manufacturing activity indicated lingering weaknesses in the world's second-largest economy and US consumer confidence dropped for a second month. Meanwhile, US markets made a mixed closing in last session, as traders seemed somewhat reluctant to make any significant moves ahead of the release of the closely watched monthly jobs report on Friday.

Back home, all BSE sectoral indices were trading in the green. Among them, FMCG index gained the most by 1.45 percent, followed by IT 1.19 percent, Oil & Gas 0.60 percent and Consumer Durables 0.59 percent. However, shares of airline majors such as Jet Airways, InterGlobe Aviation and SpiceJet came under pressure after oil marketing companies hiked jet fuel prices by 9.2 per cent to Rs 46,729.48/kl. In scrip specific development, Shares of Axis Bank have gained after the Reserve Bank of India (RBI) allowed the bank to raise foreign shareholding limit to 62%, from the earlier limit of 49%. Moreover, Shilpi Cable Technologies gained after the company received its board’s approval to set up a project at Abu Dhabi, UAE, through its subsidiary.

The market breadth on BSE was positive, out of 2135 stocks traded, 1344 stocks advanced, while 706 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26849.42, up by 181.46 points or 0.68% after trading in a range of 26671.86 and 26857.25. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index up by 0.71%.

The top gaining sectoral indices on the BSE were FMCG up by 1.45%, TECK up by 1.26%, IT up by 1.19%, Oil & Gas up by 0.60%, Consumer Durables up by 0.59%, while there were no losing indices on the BSE sectoral front.

The top gainers on the Sensex were Asian Paints up by 3.14%, Adani Ports &Special up by 2.91%, TCS up by 2.06%, Bharti Airtel up by 1.82% and ITC up by 1.73%. On the flip side, Tata Motors down by 0.83%, HDFC Bank down by 0.44%, ICICI Bank down by 0.39%, Coal India down by 0.12% and Bajaj Auto down by 0.01% were the top losers.

Meanwhile, extending the expansion mood for the fifth consecutive month, Core sector growth accelerated to the fastest in 17 months at 8.5% in April. This is the highest growth rate achieved since the 8.54 per cent growth recorded in November 2014, mainly due to a low base and better performance by petroleum refinery, fertiliser, steel, cement and electricity sectors. However, for the fiscal year ended March 31, 2016, the cumulative growth of the index of eight core industries or the core sector index was 2.7%, the slowest since 2011-12.

As per the data released by the commerce department, combined Index of Eight Core Industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) stood at 176.4 in April, 2016, 8.5 % higher compared to the index of April, 2015.

Sector wise,  Petroleum Refinery production  having weight of 5.94% in the index,increased by 17.9 % in April, 2016 over April, 2015, its cumulative index during April to March, 2015-16 increased by 3.8 % over the corresponding period of previous year.

Fertilizer production having weight of 1.25%, increased by 7.8 % in April, 2016 over April, 2015, its cumulative index during April to March, 2015-16 increased by 11.3 % over the corresponding period of previous year.

Steel production (Alloy + Non-Alloy) having a weight of 6.68% increased by 6.1% in April, 2016 over April, 2015, though its cumulative index during April to March, 2015-16 declined by 1.4 % over the corresponding period of previous year.

Cement production having weight of 2.41%,  increased by 4.4 % in April, 2016 over April, 2015,  its cumulative index during April to March, 2015-16 increased by 4.7 % over the corresponding period of previous year.

Electricity generation having weight of 10.32%, increased by 14.7 % in April, 2016 over April, 2015, its cumulative index during April to March, 2015-16 increased by 5.2 % over the corresponding period of previous year.

On the other hand, Coal production having weight of 4.38 %, decreased by 0.9 % in April, 2016 over April, 2015, its cumulative index during April to March, 2015-16 increased by 4.6 % over corresponding period of previous year.

Crude Oil production having weight of 5.22%, decreased by 2.3% in April, 2016 over April, 2015, its cumulative index during April to March, 2015-16 decreased by 1.4 % over the corresponding period of previous year.

The Natural Gas production having weight of 1.71 %, decreased by 6.8 % in April, 2016 over April, 2015, its cumulative index during April to March, 2015-16 declined by 4.2% over the corresponding period of previous year.

The CNX Nifty is currently trading at 8211.30, up by 51.20 points or 0.63% after trading in a range of 8173.75 and 8212.60. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 3.16%, Adani Ports & Special up by 3.12%, Bharti Infratel up by 2.36%, TCS up by 2.35% and ITC up by 1.92%. On the flip side, Tata Motors down by 1.04%, Tata Motors - DVR down by 0.84%, Kotak Mahindra Bank down by 0.64%, Yes Bank down by 0.54% and HDFC Bank down by 0.48% were the top losers.