Markets remain bullish on firm Manufacturing PMI data

Indian equity benchmarks remained bullish in late morning session as the country’s manufacturing sector growth bounced back in August from the previous month’s GST-related contraction owing to resumption of growth in new orders, production and employment. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) rebounded to 51.2 in August from a low of 47.9 in the previous month. Some support also came with the report that India’s core sector output accelerated to 2.4% in the month of July 2017, as compared to 0.8% in June 2017. Investors shrugged off weak economic growth data of the June quarter. India's Gross Domestic Product (GDP) growth slowed down to a three-year low of 5.7% during the first quarter (April-June) of the fiscal year 2017-18, as against 7.9% in the corresponding period a year ago and 6.1% in the preceding quarter.

On the global front, Asian market were trading mostly in green, taking their cues from optimism on Wall Street set off by a report showing spending by US consumers growing in July, along with wages and salaries. Back home, in scrip specific development, Alembic Pharmaceuticals gained after the company received EU GMP Certificate for the audit conducted at its Formulation Facility at Panelav from August 8, 2017 to August 10, 2017.

The BSE Sensex is currently trading at 31862.20, up by 131.71 points or 0.42% after trading in a range of 31707.27 and 31890.28. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.83%, while Small cap index was up by 0.94%.

The top gaining sectoral indices on the BSE were Realty up by 2.48%, Healthcare up by 1.72%, Auto up by 1.36%, Consumer Disc up by 1.26% and Industrials up by 0.86%, while Telecom down by 0.35%, IT down by 0.34%, TECK down by 0.23% and Consumer Durables down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 8.49%, Bajaj Auto up by 2.89%, Asian Paints up by 2.38%, Kotak Mahindra Bank up by 2.02% and Hero MotoCorp up by 1.85%. On the flip side, TCS down by 1.91%, Bharti Airtel down by 1.25%, NTPC down by 0.74%, HDFC down by 0.70% and Wipro down by 0.69% were the top losers.

Meanwhile, with higher production in steel and electricity, India’s core sector output accelerated to 2.4% in the month of July 2017, as compared to 0.8% in June 2017. According to that data released by the ministry of Commerce and Industry showed the combined Index of eight core industries stood at119.8 in July, 2017, which was 2.4% higher compared to the index of July, 2016. Its cumulative growth during April to July, 2017-18 was 2.5%. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Among eight core sectors, steel production having 17.92% weight jumped 9.2% in July, 2017 over July, 2016 and its cumulative index increased by 6.9% during April to July, 2017-18 over the corresponding period of previous year. The Natural Gas production having 6.88% weight surged 6.6% in July, 2017 over July, 2016 and its cumulative index increased by 4.9% during April to July, 2017-18 over the corresponding period of previous year. Electricity generation having 19.85% weight rose 5.4% in July, 2017 over July, 2016 and its cumulative index increased by 5.4 % during April to July, 2017-18 over the corresponding period of previous year. Coal production having 10.33% weight was up by 0.7% in July, 2017 over July, 2016, while its cumulative index declined by 3.3% during April to July, 2017-18 over corresponding period of the previous year.

On the other hand, Petroleum Refinery production having 28.04% weight slipped 2.7% in July, 2017 over July, 2016, while its cumulative index increased by 0.7% during April to July, 2017-18 over the corresponding period of previous year. Cement production having 5.37% weight dropped 2.0 % in July, 2017 over July, 2016 and its cumulative index declined by 3.5% during April to July, 2017-18 over the corresponding period of previous year. Crude Oil production having 8.98% weight decreased by 0.5% in July, 2017 over July, 2016, while its cumulative index increased by 0.05% during April to July, 2017-18 over the corresponding period of previous year. Fertilizer production having 2.63% weight was down by 0.3 % in July, 2017 over July, 2016 and its cumulative index declined by 1.5% during April to July, 2017-18 over the corresponding period of previous year.

The CNX Nifty is currently trading at 9954.15, up by 36.25 points or 0.37% after trading in a range of 9909.85 and 9963.90. There were 38 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 8.51%, Bajaj Auto up by 3.16%, GAIL India up by 2.42%, Asian Paints up by 2.35% and Aurobindo Pharma up by 2.22%. On the flip side, TCS down by 1.98%, Bharti Airtel down by 1.11%, Power Grid Corporation down by 1.09%, Indian Oil Corporation down by 1.01% and HDFC down by 0.82% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 3.21 points or 0.1% to 3,364.02, Taiwan Weighted increased 9.04 points or 0.09% to 10,594.82 and Nikkei 225 increased 54.22 points or 0.28% to 19,700.46.

On the flip side, Hang Seng decreased 11.1 points or 0.04% to 27,959.20, and KOSPI Index decreased 3.32 points or 0.14% to 2,359.87.