Firm trade prevails in late morning session

Indian equity benchmarks continued their firm trade in late morning session on account of buying in frontline blue chip counters, on back of better than expected economic data. Traders were getting encouragement with the Nikkei India Manufacturing Purchasing Managers’ Index, or PMI report which rose to 50.7 in February from 50.4 in January. This is the second month in succession in which the health of the sector improved after the demonetization-related downturn at the end of 2016. Some support also came with report that India’s Gross Domestic Product (GDP) is growing at a rate of 7% in the October-December quarter of the fiscal year 2016-17 after factoring in the demonetization impact. Also, according to the second advance estimates, released by the Central Statistics Office (CSO), the growth in GDP during 2016-17 is estimated at 7.1 percent as compared to the growth rate of 7.6 percent in 2015-16, which is much better than the economic survey and the RBI’s estimates. The other positive factor of the Second Advance Estimates of National Income, 2016-17 was India’s per capita net national income expected to rise 10.2 percent to Rs 1,03,818 in the current fiscal. Separately, in a much-needed shot in the arm, global think-tank OECD pitched for a rating upgrade for India and said global rating agencies had become ‘overtly cautious’ and conservative in not revising India’s rating for last 14 years. The Organisation for Economic Cooperation and Development (OECD) added that India’s rating could be changed to neutral and then positive and with the kind of reform programmes that the country is putting out the agencies can’t fail to notice so this should have.

Traders were seen piling position in Realty, Healthcare and Bankex stocks, while selling was witnessed in Oil & Gas, Energy and Telecom sector stocks. In scrip specific development, Amtek Auto was trading firm on planning to raise Rs 117.5 crore by issuing equity shares to promoters on a preferential basis for which it will seek shareholders’ approval. Tata Teleservices (Maharashtra) continued its firm trade as Tata Sons and NTT Docomo proposed a resolution to the Delhi High Court on settling a dispute over the $1.17 billion due to the Japanese telco for exiting their joint venture ending two years of public acrimony.

On the global front, Asian shares were trading mostly in green, while Japanese stocks recovered from intraday lows after US President Donald Trump’s speech to Congress offered few details or surprises on tax and spending policies. China’s factory activity expanded for the eighth straight month in February as export orders picked up, a private survey showed, giving authorities more room to tackle financial risks in the economy as debt continues to rise. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,900 and 28,900 levels respectively. The market breadth on BSE was positive in the ratio of 1555:702, while 144 scrips remained unchanged.

The BSE Sensex is currently trading at 28958.02, up by 214.70 points or 0.75% after trading in a range of 28824.17 and 29001.35. 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 0.26%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Realty up by 1.84%, Healthcare up by 1.05%, Bankex up by 0.98%, IT up by 0.81% and FMCG up by 0.66%, while Oil & Gas down by 0.70%, Energy down by 0.33% and Telecom down by 0.17% were the losers on BSE.

The top gainers on the Sensex were Axis Bank up by 2.52%, Dr. Reddy’s Lab up by 1.85%, HDFC up by 1.75%, Sun Pharma up by 1.71% and Hero MotoCorp up by 1.62%.

On the flip side, Tata Motors down by 0.99%, Mahindra & Mahindra down by 0.75%, Bharti Airtel down by 0.53%, GAIL India down by 0.45% and NTPC down by 0.18% were the top losers.

Meanwhile, contraction in the output of refinery products, fertiliser and cement pulled down the eight core sector growth to a five month low of 3.4% in January 2017, as against 5.7% in January 2016. Infrastructure sectors’ expansion in January this year is the lowest since August 2016, when the segments had recorded a growth of 3.2%. It is also lower than that of 5.6% in December 2016. According to the data released by the ministry of Commerce and Industry, the combined Index of eight core industries coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity stood at 191.8 in January, 2017, which was 3.4% higher compared to the index of January, 2016. Its cumulative growth during April to January, 2016-17 was 4.8%.

Among eight core sectors, Steel production having 6.68% weight jumped 11.4% in January, 2017 over January, 2016. Its cumulative index during April to January, 2016-17 increased by 9.2% over the corresponding period of previous year. Electricity generation having 10.32% weight advanced 4.8% in January, 2017 over January, 2016. Its cumulative index during April to January, 2016-17 increased by 5.4% over the corresponding period of previous year. Coal production having 4.38% weight increased by 4.8% in January, 2017 over January, 2016. Its cumulative index during April to January, 2016-17 increased by 2.3% over corresponding period of previous year.

The Natural Gas production having 1.71% weight surged 11.9% in January, 2017 over January, 2016, while its cumulative index during April to January, 2016-17 declined by 1.9% over the corresponding period of previous year. Crude Oil production having 5.22% weight increased by 1.3% in January, 2017 over January, 2016, while its cumulative index during April to January, 2016-17 declined by 2.8 % over the corresponding period of previous year.

On the other hand, Cement production having 2.41% weight declined 13.3% in January, 2017 over January, 2016, while its cumulative index during April to January, 2016-17 increased by 1.0 % over the corresponding period of previous year. Fertilizer production having 1.25% weight slipped 1.6% in January, 2017 over January, 2016, while its cumulative index during April to January, 2016-17 increased by 2.9 % over the corresponding period of previous year. Petroleum Refinery production having 5.94% weight declined 1.5% in January, 2017 over January, 2016, while its cumulative index during April to January, 2016-17 increased by 6.8 % over the corresponding period of previous year.

The CNX Nifty is currently trading at 8934.95, up by 55.35 points or 0.62% after trading in a range of 8898.60 and 8950.25. There were 38 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.43%, Dr. Reddy’s Lab up by 2.06%, HDFC up by 1.69%, Sun Pharma up by 1.66% and Hero MotoCorp up by 1.48%.

On the flip side, BPCL down by 1.57%, Tata Motors down by 1.16%, Ultratech Cement down by 1.10%, Idea Cellular down by 0.99% and BHEL down by 0.95% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.6 points or 0.21% to 1,697.37, Shanghai Composite increased 13.88 points or 0.43% to 3,255.61, Hang Seng increased 56.25 points or 0.24% to 23,796.98 and Nikkei 225 increased 266.14 points or 1.39% to 19,385.13.

On the other hand, Taiwan Weighted decreased 58.52 points or 0.6% to 9,691.95 and Jakarta Composite decreased 17.8 points or 0.33% to 5,368.89.

South Korea stock exchange was closed on account of ‘Independence Movement Day’ holiday.