Markets continue to hold gains; Nifty above 9650 level

Indian equity benchmarks continued to trade in green territory in late afternoon session amid weak opening in European markets. Sentiments remained upbeat with the report that  the seasonally adjusted Nikkei Business Activity index surged to 52.2 in May from 50.2 in April, marking a fourth month above the 50-level that separates growth from contraction. Besides, the seasonally adjusted Nikkei India Composite PMI Output Index which measures both manufacturing and services also increased to 52.5 in May from 51.3 in April to reach at a seven month high. Some support also came with the report that the World Bank projecting a strong 7.2% growth rate for India this year against 6.8% growth in 2016 and it noted that India is recovering from the temporary adverse effects of demonetization. However, the gains were capped as investors remained cautious ahead of the Reserve Bank of India’s (RBI) policy meeting, which begins tomorrow.

On the global front, European markets were trading in red as investors eyed an upcoming monetary policy meeting from the European Central Bank (ECB) and reacted to the terrorist attack in London over the weekend, just a few days ahead of a general election. Asian markets were also trading in red. Back home, in scrip specific development, Natco Pharma was trading in green on the plan of launching around 8-10 new products in domestic branded formulations segment during FY18.

The BSE Sensex is currently trading at 31311.70, up by 38.41 points or 0.12% after trading in a range of 31198.22 and 31355.42. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.33%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 6.07%, Realty up by 1.63%, Consumer Disc up by 1.08%, Telecom up by 0.86% and Capital Goods up by 0.76%, while Metal down by 0.36%, Utilities down by 0.15% and FMCG down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.54%, Adani Ports & SEZ up by 1.27%, ONGC up by 1.21%, Larsen & Toubro up by 1.10% and Hindustan Unilever up by 1.09%. On the flip side, Coal India down by 1.28%, Lupin down by 0.82%, Infosys down by 0.77%, ITC down by 0.77% and Dr. Reddy’s Lab down by 0.72% were the top losers.

Meanwhile, pointing to the fastest increase in output in the current four-month sequence of expansion, India's services sector activity grew in May. The seasonally adjusted Nikkei Business Activity index surged to 52.2 in May from 50.2 in April, marking a fourth month above the 50-level that separates growth from contraction. Output at goods producers rose at a softer rate than in April, but one that outstripped that seen in the service economy. The seasonally adjusted Nikkei India Composite PMI Output Index which measures both manufacturing and services also increased to 52.5 in May from 51.3 in April to reach at a seven month high.

The survey results stated that service providers took on extra staff in May in order to cope with greater workloads, noting that the job creation accelerated in May month to near four year high. Supporting the pick-up in services activity growth was a quicker rise in new business inflows. However, factory jobs witnessed a fall in the latest month. The survey further stated that the stronger upturn in services new work helped to offset the slowdown in growth of manufacturing orders and new work across the private sector economy in May.

On the cost front, the report said that input costs and output charges increased at softer rates which were broadly negligible in the context of historical PMI data. Outstanding business volumes at service providers rose further in May, while level of unfinished work held by manufacturing firms also expanded at a modest, though quicker, pace. The report further said that business sentiment weakened on the back of growing concerns regarding competitive pressure and added that outstanding business volumes at service providers rose further in May, taking the current sequence of continuous accumulation to one year.

The CNX Nifty is currently trading at 9674.20, up by 20.70 points or 0.21% after trading in a range of 9640.70 and 9687.20. There were 31 stocks advancing against 19 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Indiabulls Housing Finance up by 4.20%, Yes Bank up by 2.71%, Bharti Infratel up by 2.32%, ONGC up by 1.47% and Bajaj Auto up by 1.27%. On the flip side, Ultratech Cement down by 1.50%, Coal India down by 1.25%, Infosys down by 0.98%, Dr. Reddy’s Lab down by 0.92% and Lupin down by 0.88% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 61.06 points or 0.24% to 25,862.99, Shanghai Composite decreased 13.88 points or 0.45% to 3,091.66, Nikkei 225 decreased 6.46 points or 0.03% to 20,170.82 and KOSPI Index decreased 3.1 points or 0.13% to 2,368.62. On the flip side, Jakarta Composite increased 5.87 points or 0.1% to 5,748.32, FTSE Bursa Malaysia KLCI increased 11.86 points or 0.67% to 1,788.81 and Taiwan Weighted increased 68.69 points or 0.68% to 10,226.84.

European markets were trading mostly in red; France’s CAC decreased 24.56 points or 0.46% to 5,318.85 and UK’s FTSE 100 decreased 8.03 points or 0.11% to 7,539.60. The German stock market remained closed due to a religious public holiday.