Firm trade continues on street; Nifty above 9,950 level

Indian equity benchmarks continued to trade firm in late afternoon session, on the back of higher opening in European markets. Traders remained optimistic with Niti Aayog’s new vice chairman Rajiv Kumar’s statement that the economy will grow at 7-7.5% in the second quarter (July-September) and added that demonetisation had absolutely no impact on the GDP numbers for the first quarter released on Thursday. Rebound in India’s manufacturing PMI in the month of August to 51.2 as compared to 47.9 in July, aided by rise in new orders and output across the country, also continued to support the sentiments. However, the indices lost some of their gains after hitting intraday highs amid selling in IT, TECK and Telecom stocks. Meanwhile, India is expected to impose anti- dumping duty on imports of certain colour coated steel products from China and European Union to protect the interest of domestic players from below-cost in-bound shipments.

On the global front, European markets were trading in green, as investors geared up for more data releases, while taking note of the positive trading seen overseas. Asian markets were also trading in green. Back home, in scrip specific development, Cadila Healthcare was trading higher after the company received the final approval from the USFDA to market Donepezil Hydrochloride Tablets, in the strength of 23 mg. The drug is indicated for the treatment of dementia of the Alzheimer’s disease.

The BSE Sensex is currently trading at 31875.73, up by 145.24 points or 0.46% after trading in a range of 31707.27 and 31944.10. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.90%, while Small cap index was up by 0.89%.

The top gaining sectoral indices on the BSE were Realty up by 2.34%, Metal up by 1.68%, Auto up by 1.56%, Healthcare up by 1.50% and Consumer Disc up by 1.35%, while IT down by 0.44%, Telecom down by 0.40%, TECK down by 0.31% and Consumer Durables down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 9.14%, Bajaj Auto up by 4.40%, Asian Paints up by 3.58%, Kotak Mahindra Bank up by 2.17% and ONGC up by 1.91%. On the flip side, TCS down by 1.55%, Bharti Airtel down by 1.31%, HDFC down by 0.89%, Wipro down by 0.80% and Power Grid Corporation down by 0.62% were the top losers.

Meanwhile, after hitting its lowest level since February 2009 in the previous month, India’s manufacturing activity rebounded in the month of August, aided by rise in new orders and output across the country. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance- stood at 51.2 in August, as compared to 47.9 in July, signaling a renewed improvement in the health of the sector.

As per survey data, new work witnessed rise due to a better understanding of the new taxation system, alongside greater promotional activities and a pick-up in demand. Though the growth in factory orders remained moderate, it was the quickest since May. Besides, new export business also rose but at the slowest pace in the current three-month period of growth. There was broad-based recovery, with factory orders and production up in each of the three monitored sub-sectors. Companies responded to the improvement in operating conditions by creating jobs and purchasing additional raw materials and semi-finished items.

On the inflation front, the report said that output prices rose in August as companies attempted to pass through to their clients ongoing increases in cost burdens. However, input cost inflation softened to a one-year low as the introduction of the Goods and Services Tax (GST) reportedly led to higher prices for some materials and cheaper rates charged for other items. The report also noted that manufacturers hired extra staff at the fastest pace since March 2013 in order to cope with higher workloads.

The CNX Nifty is currently trading at 9967.75, up by 49.85 points or 0.50% after trading in a range of 9909.85 and 9978.05. There were 37 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 8.86%, Bajaj Auto up by 4.17%, Asian Paints up by 3.63%, Hindalco up by 2.48% and Aurobindo Pharma up by 2.25%. On the flip side, TCS down by 1.78%, Tech Mahindra down by 1.23%, Bharti Airtel down by 1.16%, Power Grid Corporation down by 1.09% and Wipro down by 0.99% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 6.31 points or 0.19% to 3,367.12, Taiwan Weighted increased 9.04 points or 0.09% to 10,594.82 and Nikkei 225 increased 45.23 points or 0.23% to 19,691.47. On the flip side, Hang Seng decreased 17.14 points or 0.06% to 27,953.16 and KOSPI Index decreased 5.5 points or 0.23% to 2,357.69.

European markets were trading in green; UK’s FTSE 100 increased 15.36 points or 0.21% to 7,445.98, France’s CAC rose 34.63 points or 0.68% to 5,120.22 and Germany’s DAX was up by 58.69 points or 0.49% to 12,114.53.