Markets maintain early gains in late afternoon session

Amid firm global cues, Indian equity benchmarks maintained their early gains in late afternoon session on account of better-than-expected GDP data for the third quarter of current fiscal. Domestic sentiments were buoyed as Nikkei India Manufacturing Purchasing Managers’ Index rose to 50.7 in February from 50.4 in January. Sentiments also got some support with Economic Affairs Secretary Shaktikanta Das’ statement that the positive effects of demonetisation will be visible from April and the completion of remonetisation process will drive consumption going forward. However, upper side remained capped with a report that the Centre’s fiscal and revenue deficits between April and January exceeded the Budget target for 2016-17. The fiscal deficit shot up to 5,64,192 crore, amounting to 105.7 per cent of the Budget estimate, between April 2016 and January 2017. Similarly, the Centre’s revenue deficit rose to 4,04,826 crore in the period, or 114.4 per cent of the full year target, in the first 10 months of the fiscal. On sectoral front, most of the banking sector stocks were trading in green with credit rating agency, S&P rating’s report that India’s banking sector growth and profitability are expected to improve gradually in financial year 2017-18, from the low base of the financial year 2016-17.

On global front, European markets were trading in green, after U.S. President Donald Trump struck an optimistic tone in his first major address to a joint session of Congress. He offered few policy details on his economic plan but said he was open to a broad immigration reform bill that could be passed if both Republicans and Democrats in Congress were willing to compromise. Asian markets were trading in green, in the wake of positive data from China, Japan and Australia.

Back home, in scrip specific development, SML Isuzu traded higher after the company reported 13.4% jump in February sales. The company has sold 1,145 vehicles during February 2017 against 1,010 vehicles sold in February 2016.

The BSE Sensex is currently trading at 28953.79, up by 210.47 points or 0.73% after trading in a range of 28824.17 and 29001.35. There were 21 stocks advancing against 8 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index was up by 0.63%.

The gaining sectoral indices on the BSE were Realty up by 3.47%, Metal up by 1.91%, Healthcare up by 1.08%, Basic Materials up by 1.01% and Bankex up by 0.96%, while Oil & Gas down by 0.71%, Energy down by 0.19%, Consumer Durables down by 0.12% and Auto down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 2.73%, Sun Pharma up by 2.29%, Tata Steel up by 2.20%, HDFC up by 1.94% and Axis Bank up by 1.84%. On the flip side, Tata Motors down by 1.14%, Mahindra & Mahindra down by 0.83%, GAIL India down by 0.54%, NTPC down by 0.46% and Bharti Airtel down by 0.45% were the top losers.

Meanwhile, India’s manufacturing sector growth expanded for the second consecutive month in February, as a rebound in export demand contributed to a stronger expansion of total new orders. Manufacturers benefited from recovering demand and raised production volumes in response to another expansion in inflows of new work. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 50.7 in February from 50.4 in January.

According to the survey, the upturn in output for last two successive months reflected improved demand from both the domestic and external markets. The total volume of incoming new work increased for the second month in a row, whereas new export orders expanded for the first time since November 2016. Rates of growth for both production and order books picked up since January, but remained marginal. Increased new order intakes contributed to a further rise in outstanding business. Furthermore, the rate of backlog accumulation was the fastest since last October.

The survey also pointed that manufacturing employment declined, though the rate of job losses was marginal overall. Input price inflation quickened in February, with the rate of increase accelerating to the fastest in two and-a-half years.

Noting that the vast majority of survey participants signalled unchanged payroll numbers, the survey stated that confidence among Indian manufacturers was relatively subdued in February. Although sentiment towards the year-ahead outlook for output remained positive, the degree of optimism fell since January and was well below its near five-year historical average.

The CNX Nifty is currently trading at 8940.00, up by 60.40 points or 0.68% after trading in a range of 8898.60 and 8950.25. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.85%, Dr. Reddy’s Lab up by 2.77%, Sun Pharma up by 2.28%, Kotak Mahindra Bank up by 2.16% and HDFC up by 1.99%. On the flip side, BPCL down by 1.79%, Tata Motors down by 1.39%, Eicher Motors down by 1.16%, BHEL down by 0.86% and Ultratech Cement down by 0.86% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 5.2 points or 0.16% to 3,246.93, FTSE Bursa Malaysia KLCI increased 6.08 points or 0.36% to 1,699.85, Hang Seng increased 35.76 points or 0.15% to 23,776.49 and Nikkei 225 increased 274.55 points or 1.44% to 19,393.54. On the flip side, Taiwan Weighted decreased 75.69 points or 0.78% to 9,674.78 and Jakarta Composite decreased 31.27 points or 0.58% to 5,355.42.

All European markets were trading in green, UK’s FTSE 100 increased 38.03 points or 0.52% to 7,301.47, France’s CAC increased 44.5 points or 0.92% to 4,903.08 and Germany’s DAX increased 109.72 points or 0.93% to 11,944.13.