Benchmarks continue to trade in green in late afternoon session

Inflow of foreign funds and hopes of incentives in the upcoming Union Budget pushed the Indian benchmarks to trade in green in late afternoon session. Healthy buying witnessed in Power, Banking and PSU stocks also boosted the key indices to trade with substantial gains of more than half a per cent each. Sentiments remained upbeat with Union Finance Minister Arun Jaitley’s statement that the Indian economy is set to grow at a healthy rate in spite of the global economic slowdown in the coming years, because of important initiatives taken by the present NDA Government that are demonetisation, encouraging free trade and Goods and Services Tax (GST). Traders shrugged off Reserve Bank of India’s (RBI) statement that business sentiments of the Indian manufacturing sector deteriorated in the third quarter of the current financial year and are likely to decline in the fourth quarter.

On the global front, European markets were trading red after strong gains earlier this week, with investors digesting corporate earnings and fluctuations in currency markets. Asian markets were trading red in holiday-thinned trade. Back home, in scrip specific development, Lokesh Machines traded jubilantly on the bourses after the company received an approval for entering into technical tie-up agreement with EMKO Group of Austria (EMKO).

The BSE Sensex is currently trading at 27953.58, up by 245.44 points or 0.89% after trading in a range of 27759.48 and 27980.39. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.93%, while Small cap index was up by 0.82%.

The top gaining sectoral indices on the BSE were Power up by 2.22%, Bankex up by 1.72%, PSU up by 1.50%, Consumer Durables up by 1.27% and Capital Goods up by 0.84%, while FMCG down by 0.80% and Realty down by 0.39% were the few losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 5.29%, SBI up by 3.10%, NTPC up by 2.98%, Axis Bank up by 2.66% and HDFC up by 2.50%. On the flip side, Wipro down by 1.65%, Lupin down by 1.64%, ITC down by 1.49%, Hindustan Unilever down by 1.31% and Cipla down by 0.80% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in the 76th round of its Industrial Outlook Survey (IOS) has indicated a decline in business sentiments. In the survey which was conducted during October-December 2016, RBI has said that business sentiments of the Indian manufacturing sector deteriorated in the third quarter of the current financial year and are likely to decline in the fourth quarter. The survey elicited response from 1221 manufacturing companies and was conducted during October-December 2016.

In third quarter, RBI has indicated slight moderation in the sentiments in demand condition for the second successive quarter. It said that in respect of several parameters like order books, capacity utilisation and imports, the level of optimism was lower in third quarter than second quarter. However, the level of optimism was more about the export performance, while optimism on production remained unchanged for the third quarter. The sentiment on profit margin remained largely unchanged due to reduced pessimism about the cost of finance and the cost of raw.

On business sentiments outlook in fourth quarter, the survey stated that they had largely followed similar pattern. However, in respect of demand condition (Order Books, Production), the outlook deteriorated. Further it said that pressure from rise in cost of raw material was expected to bring down profit margin. Improved sentiments were expressed in pending orders, exports, and cost of finance.

The CNX Nifty is currently trading at 8662.95, up by 60.20 points or 0.70% after trading in a range of 8606.90 and 8672.70. There were 35 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were BHEL up by 5.53%, ICICI Bank up by 5.37%, Bank of Baroda up by 3.58%, SBI up by 3.20% and NTPC up by 3.15%. On the flip side, Wipro down by 1.87%, ITC down by 1.77%, Lupin down by 1.75%, Bosch down by 1.74% and Hindustan Unilever down by 1.48% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 13.39 points or 0.06% to 23,360.78, Jakarta Composite decreased 7.47 points or 0.14% to 5,310.16 and FTSE Bursa Malaysia KLCI decreased 5.86 points or 0.35% to 1,686.36. On the flip side, Nikkei 225 increased 65.01 points or 0.34% to 19,467.40.

All European markets were trading in red; Germany’s DAX decreased 25.16 points or 0.21% to 11,823.47, France’s CAC decreased 14.24 points or 0.29% to 4,853.00 and UK’s FTSE 100 decreased 1.22 points or 0.02% to 7,160.27.