Benchmarks trade in fine fettle in early deals; Sensex re-conquers 31,000 mark

Indian equity benchmarks have made a positive start and are trading in fine fettle in early deals on Monday, with frontline gauges recapturing their crucial 31,000 (Sensex) and 9,550 (Nifty) levels. Sentiments remained up-beat Moody’s statement that implementation of the GST will be positive for India’s rating as it will lead to higher GDP growth and increased tax revenues. Some support also came with industry body CII stating that the GST rollout will impart major competitiveness to Indian industry, incentivize exports and help expand the tax net. Besides, traders also took some encouragement with report that the government has ramped up capital spending by nearly 60% in the first two months of the current financial year.

On the global front, paring all of their initial losses Asian markets turned positive as traders opted to buy beaten down but fundamentally strong stocks. Japanese Nikkei edged higher on the back of Bank of Japan’s better-than-expected quarterly Tankan survey results. The US markets ended mostly in green terrain on Friday on report showing that personal income rose by slightly more than anticipated in the month of May, while personal spending inched up in line with estimates.

Back home, traders shrugged off report that growth in eight core sector slowed to 3.6% in the month of May 2017, as compared to 5.2% in May last year on account of contraction in output of coal and fertilizer, though it was higher as compared to 2.8% in April 2017, with a sharp rise in the output of electricity, refinery and natural gas production. The market breadth indicating the overall health of the market was strong, with 1,393 shares gaining and 461 shares declining, while a total of 80 shares were unchanged.

The BSE Sensex is currently trading at 31089.02, up by 167.41 points or 0.54% after trading in a range of 31017.11 and 31258.33. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.56%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were FMCG up by 3.02%, Metal up by 1.11%, Basic Materials up by 1.00%, Telecom up by 0.87% and Consumer Durables was up by 0.73%, while IT down by 0.34%, Energy down by 0.13%, TECK down by 0.12% and Utilities was down by 0.06% were the few losing indices on BSE.

The top gainers on the Sensex were ITC up by 5.42%, Mahindra & Mahindra up by 1.44%, Maruti Suzuki up by 1.28%, Tata Steel up by 1.06% and Tata Motors - DVR up by 0.70%. On the flip side, NTPC down by 1.58%, Wipro down by 1.37%, Bajaj Auto down by 1.06%, Tata Motors down by 0.64% and TCS down by 0.58% were the top losers.

Meanwhile, contraction in output of coal and fertilizer slowed the growth rate of eight core sector to 3.6% in the month of May 2017, as compared to 5.2% in May last year, though it was higher as compared to 2.8% in April 2017, with a sharp rise in the output of electricity, refinery and natural gas production. According to that data released by the ministry of Commerce and Industry showed the combined Index of eight core industries stood at 126.4 in May, 2017, which was 3.6% higher compared to the index of May, 2016. Its cumulative growth during April to May, 2017-18 was 3.2%. The eight industries - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity - have a weight of 40.27% in the overall Index of Industrial Production (IIP).

Among eight core sectors, Electricity generation having 19.85% weight surged 6.4% in May, 2017 over May, 2016 and its cumulative index increased by 5.9% during April to May, 2017-18 over the corresponding period of previous year. Petroleum Refinery production having 28.04% weight jumped 5.4% in May, 2017 over May, 2016 and its cumulative index increased by 2.8% during April to May, 2017-18 over the corresponding period of previous year. The Natural Gas production having 6.88% weight rose 4.5 % in May, 2017 over May, 2016 and its cumulative index increased by 3.3% during April to May, 2017-18 over the corresponding period of previous year.

Steel production having 17.92% weight advanced 3.7% in May, 2017 over May, 2016. Its cumulative index increased by 6.3% during April to May, 2017-18 over the corresponding period of previous year. Crude Oil production having 8.98% weight inched up by 0.7% in May, 2017 over May, 2016 and its cumulative index increased by 0.1% during April to May, 2017-18 over the corresponding period of previous year. Cement production having 5.37% weight increased by 1.8% in May, 2017 over May, 2016, while its cumulative index declined by 0.3% during April to May, 2017-18 over the corresponding period of previous year.

On the other hand, Fertilizer production having 2.63% weight dropped 6.5% in May, 2017 over May, 2016 and its cumulative index declined by 0.8% during April to May, 2017-18 over the corresponding period of previous year. Coal production having 10.33% weight slipped 3.3% in May, 2017 over May, 2016 and its cumulative index decreased by 3.3% during April to May, 2017-18 over corresponding period of the previous year.

The CNX Nifty is currently trading at 9565.15, up by 44.25 points or 0.46% after trading in a range of 9543.55 and 9612.75. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were ITC up by 5.47%, Hindalco up by 2.75%, Bharti Infratel up by 2.47%, Bank of Baroda up by 1.70% and Eicher Motors up by 1.59%. On the flip side, NTPC down by 1.86%, HCL Tech down by 1.45%, Wipro down by 1.30%, Bajaj Auto down by 1.07% and Tata Motors down by 0.64% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite rose 1.29 points or 0.04% to 3,193.72, Hang Seng gained 20.21 points or 0.08% to 25,784.79, Jakarta Composite increased 32.95 points or 0.57% to 5,862.66 and Nikkei 225 was up by 43.55 points or 0.22% to 20,076.98.

On the flip side, Taiwan Weighted slipped 13.07 points or 0.13% to 10,382.00, KOSPI Index decreased 5.57 points or 0.23% to 2,386.22 and FTSE Bursa Malaysia KLCI was down by 1.36 points or 0.08% to 1,762.31.