Post Session: Quick Review

Today’s session turned out to be a jubilant day of trade for Indian equity markets. The frontline gauges ended the session with gain of around one and half percent on easing geo-political worries. The benchmarks made a gap-up opening in early deals on reports that Pakistan agreed to reduce escalating tension on Line of Control (LoC). The sentiments also got support with India’s core sector output rising to 3.2% in August on the back of sharp rise in steel production and a pickup in cement, suggesting a lift in infrastructure and construction activity. Steel production rose 17% to a 37-month high, aided by the low base of last year. Foreign investors pumped in more than Rs 20,000 crore into the capital market in September, making it the highest net inflow in 11 months. The trend is likely to continue in coming weeks as regulator SEBI has decided to offer direct entry to well-regulated foreign investors for investing in corporate bonds. The rupee advanced against the US dollar at the Interbank Foreign Exchange on increased selling of the American currency by exporters and banks. The street took note of domestic credit rating agency report that India’s Gross Domestic Product (GDP) will be supported by a boost from consumption especially in the hinterland after a well distributed monsoon this year. Private consumption will grow by 8.3 percent in the current fiscal, 90 basis points higher than the 7.4 percent recorded last year as people especially in rural India will buy consumer durables, fast moving consumer goods as vehicles with the farm income generated due almost normal monsoon. The street is eyeing the bi-monthly Reserve Bank of India’s policy meeting. The monetary policy panel will meet on 3-4 October and decision to be published on website on 4 October.

On the global front, Asian markets ended in green, as investors mulled the possibility of a settlement between Deutsche Bank and the US Department of Justice. Japanese data showed confidence at big manufacturers was static in September amid a strong yen and sluggish demand at home and overseas. The mood was supported by a survey showing activity in China’s manufacturing sector expanded again in September, which may indicate that recent positive momentum can be sustained.  European markets were trading higher with energy shares, among those advancing as trading got underway for the fourth quarter.

Back home, hectic buying activity was witnessed in auto stocks as festive season demand boosted companies’ September sales and that is likely to continue in rest of the financial year 2016-17 as well.  Certain power, fertilizer and CNG suppliers were in action as price of natural gas for these entire sector have been cut by 18 percent to $2.5 per million British thermal unit, it’s the fourth reduction in 18 months.

The BSE Sensex ended at 28254.01, up by 388.05 points or 1.39% after trading in a range of 27919.89 and 28273.02. There were 29 stocks advancing against 1 stock declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 2.33%, while Small cap index was up by 2.72%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.79%, Metal up by 2.56%, Capital Goods up by 2.49%, Auto up by 2.45% and Consumer Durables up by 2.45% (Provisional)

The top gainers on the Sensex were Maruti Suzuki up by 3.68%, Hero MotoCorp up by 3.43%, Adani Ports & Special Economic Zone up by 3.06%, Power Grid Corporation up by 2.92% and Asian Paints up by 2.84%. (Provisional)

On the flip side, TCS down by 0.87% were the top losers. (Provisional)

Meanwhile, India’s manufacturing sector lost momentum in September, as growth of new orders eased from 20-month high of August, however it was above the crucial 50.0 threshold for the ninth consecutive month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - was down to 52.1 in September from 52.6 in August. The PMI figures also showed an intensification of inflationary pressures, both input costs and output charges increased at quicker rates.

As per the report, improved client demand supported the upswing in order books and growth was reportedly hampered by strong competition for new work. Foreign new orders for Indian-manufactured goods expanded markedly in September, at the quickest rate in 14 months. While companies scaled up their buying levels and hired additional workers, the pace has flagged compared to previous months. Amid reports of orders being fulfilled directly from stocks, post-production inventories fell again in September. On the other hand, holdings of raw materials and semi-manufactured goods rose for the tenth successive month.

Further, average purchase costs increased at a faster pace in September, but was weak compared to its long-run trend. The main item reported to be up in price was steel. Manufacturers attempted to protect profit margins as output charges were raised further. Despite ticking higher, the rate of inflation was historically muted. However, output is still rising at a decent clip and the sector looks likely to have delivered a stronger contribution to Gross domestic product (GDP) growth in Q2 FY2016/17.

The CNX Nifty ended at 8740.25, up by 129.10 points or 1.50% after trading in a range of 8635.00 and 8745.20. There were 48 stocks advancing against 3 stocks declining on the index. (Provisional)

The top gainers on Nifty were Zee Entertainment up by 5.83%, Eicher Motors up by 4.32%, Maruti Suzuki up by 3.70%, Hero MotoCorp up by 3.52% and Asian Paints up by 3.13%. (Provisional)

On the flip side, TCS down by 0.96%, Bharti Infratel down by 0.49% and Bosch down by 0.21% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 78.16 points or 1.13% to 6,977.49 and France’s CAC increased 13.15 points or 0.3% to 4,461.41. Germany stock exchange was closed on account of ‘Unification Day’ holiday.

The Asian markets ended in green on Monday, as European bank worries receded and an official survey showed activity in China's manufacturing sector expanded slightly in September. Though, a raft of factory activity data from across the region proved a mixed bag. China's official manufacturing PMI stood unchanged in September from the previous month, while data over the weekend showed activity in the services sector picked up somewhat. Japanese shares ended higher as easing fears over Deutsche Bank's health helped to improve investors' risk appetite. Investors shrugged off the Bank of Japan's (BOJ) closely-watched business sentiment survey, which showed that confidence among big Japanese manufacturers remained unchanged in September, compared to the previous three months. Markets in China, South Korea and Malaysia were closed for public holidays.