Benchmarks continue firm trade in noon session

Indian equity benchmarks continued the firm trade in the noon session on regular buying activities by both funds and retail investors amid firm global cues. Sentiments got a boost 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.  Adding the optimism among the investors credit rating agency Crisil expects India's gross domestic product (GDP) to grow at 7.9 per cent and agriculture to grow above trend at 4 per cent. The country’s GDP will be supported by a boost from consumption especially in the hinterland after a well distributed monsoon this year. The southwest monsoon ended with a 3% rainfall deficit, which is considered near normal, leaving a wider area under cultivation and higher reservoirs levels that will help the kharif, or summer, harvest and boost planting of crops in winter. Some support also came with the report that 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. However, market was a bit cautious too with the report that Indian factory activity cooled in September on slowing growth in new orders and production and as manufacturers charged slightly higher prices. After growing at the fastest clip in 13 months in August, the widely-tracked Nikkei purchasing managers’ index (PMI) survey showed that PMI was 52.1 in September, slightly down from 52.6 in August 2016. Meanwhile, Auto stocks are under the spotlight after many automakers post a solid show in September ahead of the crucial festival season. Maruti Suzuki India has reported a strong 31% year on year (YoY) growth in its passenger vehicle sales in September 2016 at 149,143 units, on the back of highest-ever domestic sales. Furthermore, Mahindra & Mahindra has reported its auto sales numbers for the month of September 2016, which stood at 46,130 units as against 42,848 units during September 2015, representing a growth of 8%.

On the global front, Asian markets edged higher on Monday as worries about Deutsche Bank eased following media reports that the German lender's hefty US fine could be reduced by more than half. 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.

Back home, stocks from Auto, Realty and Metal counters were supporting the markets’ uptrend, while those from information technology (IT) counters were adding to the underlying cautious undertone. In scrip specific development, Multi Commodity Exchange of India (MCX) has soared after the Reserve Bank of India (RBI) announced that Foreign Institutional Investors (FIIs) can now invest up to 34% in the company. Moreover, Jubilant Life Sciences has rallied after the company received United State Food and Drug Administration (USFDA) approval for Ruby-Fill- Rubidium 82 generator and elution system.

The market breadth remained optimistic as there were 1988 shares on the gaining side against 501 shares on the losing side, while 78 shares remained unchanged.

The BSE Sensex is currently trading at 28157.19, up by 291.23 points or 1.05% after trading in a range of 27919.89 and 28217.63. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.57%, while Small cap index up by 1.81%.

The top gaining sectoral indices on the BSE were Auto up by 2.25%, Realty up by 2.13%, Metal up by 1.80%, Oil & Gas up by 1.75% and PSU up by 1.68%, while IT down by 0.29% were the sole losing index on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.78%, Hero MotoCorp up by 2.93%, Mahindra & Mahindra up by 2.85%, Adani Ports &Special up by 2.77% and Sun Pharma up by 1.93%. On the flip side, TCS down by 0.70%, Infosys down by 0.59%, ICICI Bank down by 0.28% and Wipro down by 0.08% were the top losers.

Meanwhile, the newly appointed Monetary Policy Committee (MPC) headed by RBI Governor Urjit Patel has started its two days meeting (October 3 and 4, 2016) for the fourth bi-monthly monetary policy review for 2016-17. This monetary policy review on October 4 will be the first by the six-member MPC as well as Governor Patel.
Till now, the RBI Governor used to decide on key policy rates, including the repo rate or short-term lending rate. But, this time the all-powerful interest-rate setting panel, whose constitution was notified by the government recently, will take call on interest rate.

Members of the MPC are RBI Governor Urjit Patel; Deputy Governor (in charge of Monetary Policy) R Gandhi; and Executive Director Michael Patra; Chetan Ghate, Professor, Indian Statistical Institute; Pami Dua, Director, Delhi School of Economics; and Ravindra H Dholakia, Professor, Indian Institute of Management, Ahmedabad.

According to the government, a committee-based approach for determining the monetary policy will add lot of value and transparency to monetary policy decisions. The government had in August notified 4 percent inflation target with a range of plus/minus 2 percent for the next five years under the monetary policy framework agreement with the Reserve Bank.

The CNX Nifty is currently trading at 8709.05, up by 97.90 points or 1.14% after trading in a range of 8635.00 and 8727.30. There were 45 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 3.86%, Zee Entertainment up by 3.53%, Indusind Bank up by 3.19%, Hero MotoCorp up by 2.96% and Mahindra & Mahindra up by 2.94%. On the flip side, TCS down by 0.90%, Bharti Infratel down by 0.85%, Wipro down by 0.34%, Infosys down by 0.33% and ICICI Bank down by 0.20% were the top losers.

Asian markets were trading in green; Jakarta Composite surged 1.03%, Taiwan Weighted gained 0.73%, Nikkei 225 increased 0.81% and Hang Seng was up by 1.15%.