Benchmarks extend gains; trade near intra-day high level

Indian equity benchmarks extended their early gains to continue firm trade in late afternoon session, hovering near intra-day high level as investors saw Prime Minister Narendra Modi's landslide victory in the Uttar Pradesh as an indication of him winning second term in office in Lok Sabha elections 2019. Sentiments were lifted by a strong rupee and healthy buying witnessed in Capital Goods, Realty and Banking stocks. Sentiments also got a boost with the report that Industrial production bounced back into expansion in January, kicking off the financial year’s last quarter on a positive note albeit amid expectations that it will bear the brunt of demonetisation. The index of industrial production (IIP) rose 2.7% in January from a year ago. Investors shrugged off a report that the wholesale price index-based inflation (WPI) jumped to a 39-month high of 6.55% in February compared to 5.25% in the previous month on the back of expensive food and fuel items, even as manufacturing products saw a decline in inflation.

On the global front, European markets were trading in red as investors digested political events across the continent and looked ahead to a rate decision by the U.S. Federal Reserve. However, Asian markets were trading in green. Back home, in scrip specific development, Capital First were trading in green after the company received an approval for issue of rated, listed, secured, redeemable, non-convertible debentures (NCDs) of Rs 75 crore with a Green Shoe Option of Rs 125 crore on private placement basis.

The BSE Sensex is currently trading at 29488.29, up by 542.06 points or 1.87% after trading in a range of 29356.05 and 29561.93. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.52%, while Small cap index was up by 1.16%.

The top gaining sectoral indices on the BSE were Capital Goods up by 3.18%, Realty up by 2.71%, Bankex up by 2.19%, Healthcare up by 1.92% and Industrials up by 1.87%, while Telecom down by 0.47% and Metal down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 5.97%, Sun Pharma up by 5.19%, Larsen & Toubro up by 4.82%, Asian Paints up by 4.26% and Hindustan Unilever up by 3.78%. On the flip side, Coal India down by 6.56% and Bharti Airtel down by 0.92% were the top losers.

Meanwhile, the level of confidence of Indian companies declined in February from those recorded four months ago. According to the Markit Business Outlook survey, just 16 per cent of firms expect output to expand over the course of the next year, compared with 25 percent in October 2016, the lowest reading of the 12 countries for which composite outlook data were available. Besides, the expectations of weaker growth in new business inflows and job creation in India are expected to remain relatively muted.

The survey said that new business is anticipated to rise over the course of the next 12 months, though confidence is at its lowest mark since the global financial crisis. Indian enterprises foresee new projects in the pipeline, strong client demand and the possible introduction of the goods & services tax as potential growth drivers for the year ahead. On the other hand, it noted that competitive pressures, government policies, client defaults, and uncertainty in global markets are seen as threats to the outlook.

On the cost inflation front, the survey said that cost inflation expectations have been revised lower, in line with decisions by the central bank not to cut rates. Further, it added that goods producers are projected to face more intense rises in cost burdens than their services counterparts, though in both cases inflation anticipations are weaker than in October.

The CNX Nifty is currently trading at 9093.00, up by 158.45 points or 1.77% after trading in a range of 9060.50 and 9122.75. There were 47 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 5.97%, Sun Pharma up by 5.21%, Larsen & Toubro up by 4.92%, Asian Paints up by 4.39% and Adani Ports & SEZ up by 3.75%. On the flip side, Coal India down by 6.51%, Bharti Airtel down by 1.07%, Idea Cellular down by 1.01% and Bosch down by 0.42% were the top losers.

Asian markets were trading mostly in green, Shanghai Composite increased 2.3 points or 0.07% to 3,239.33, FTSE Bursa Malaysia KLCI increased 2.32 points or 0.13% to 1,724.24, KOSPI Index increased 16.19 points or 0.76% to 2,133.78, Jakarta Composite increased 34.81 points or 0.64% to 5,444.18 and Taiwan Weighted increased 46.87 points or 0.48% to 9,744.21. On the flip side, Nikkei 225 decreased 24.25 points or 0.12% to 19,609.50 and Hang Seng decreased 1.72 points or 0.01% to 23,827.95.

European Markets were trading mostly in red; Germany’s DAX decreased 19.11 points or 0.16% to 11,970.92 and France’s CAC decreased 10.12 points or 0.2% to 4,989.48. On the flip side, UK’s FTSE 100 increased 10.84 points or 0.15% to 7,377.92.