Markets continue to rally; Sensex above 31,600 mark

Key Indian benchmarks continued to rally in late morning session, by surging more than half a per cent on sustained buying by domestic investors ahead of the Reserve Bank of India (RBI)'s policy outcome scheduled for later in the day. Sentiments got boost after the growth of eight core infrastructure industries surged to five-month high by 4.9% in August 2017, as compared to 2.4% in July 2017, on the back of a double-digit jump in coal production and subsequent rise in electricity generation.  Some support also came with the private report highlighting that a majority 77 per cent of the mid-market enterprises (MMEs) in the country are confident about the domestic economy and expect higher revenue growth compared to their global peers. Firm trend in Asian markets, too fuelled the upmove. Traders overlooked the rating agency CRISIL’s latest report stating that the high level of stressed assets in the banking system, at around Rs 11.5 lakh crore at March-end, continues to choke the economy.

On the global front, Asian markets were trading in green after Wall Street closed at fresh record highs overnight, while oil prices dipped for a second straight session. Back home, in scrip specific development, Ambuja Cements moved up after the company secured Limestone Block at Nagaur district in state of Rajasthan. The company had participated in the e-auction tender of 3D1, Harima Pithasar limestone block in Tehsil and District Nagaur in Rajasthan. The company has secured an estimated limestone resource of 200 million tonnes (MT) at a final bid price of 41.6% of mineral value.

The BSE Sensex is currently trading at 31667.09, up by 169.71 points or 0.54% after trading in a range of 31457.78 and 31675.41. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index was up by 0.84%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.83%, FMCG up by 1.31%, Energy up by 1.15%, Oil & Gas up by 1.00% and Power up by 0.84%, while Telecom down by 0.48% and TECK down by 0.01% were the only losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.45%, Power Grid Corporation up by 2.11%, ITC up by 1.70%, Dr. Reddy’s Lab up by 1.61% and Reliance Industries up by 1.53%. On the flip side, Bharti Airtel down by 1.65%, ICICI Bank down by 0.52%, Coal India down by 0.50%, TCS down by 0.33% and NTPC down by 0.27% were the top losers.

Meanwhile, the growth of eight core infrastructure industries surged to five-month high by 4.9% in August 2017, as compared to 2.4% in July 2017, on the back of a double-digit jump in coal production and subsequent rise in electricity generation. According to the data released by the ministry of Commerce and Industry showed the combined Index of eight core industries stood at 123.6 in August, 2017, which was 4.9% higher compared to the index of August, 2016. Its cumulative growth during April to August, 2017-18 was 3.0%. 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 3.0% in August, 2017 over August, 2016 and its cumulative index increased by 6.0% during April to August, 2017-18 over the corresponding period of previous year. The Natural Gas production having 6.88% weight surged 4.2% in August, 2017 over August, 2016 and its cumulative index increased by 4.8% during April to August, 2017-18 over the corresponding period of previous year. Electricity generation having 19.85% weight rose 10.3% in August, 2017 over August, 2016 and its cumulative index increased by 6.5% during April to August, 2017-18 over the corresponding period of previous year. Coal production having 10.33% weight was up by 15.3% in August, 2017 over August, 2016, while its cumulative index declined by 0.2% during April to August, 2017-18 over corresponding period of the previous year.

On the other hand, Petroleum Refinery production having 28.04% weight surged 2.4% in August, 2017 over August, 2016, and its cumulative index increased by 1.0% during April to August, 2017-18 over the corresponding period of previous year. Cement production having 5.37% weight dropped 1.3% in August, 2017 over August, 2016 and its cumulative index declined by 3.3% during April to August, 2017-18 over the corresponding period of previous year. Crude Oil production having 8.98% weight decreased by 1.6% in August, 2017 over August, 2016, and its cumulative index declined by 0.3% during April to August, 2017-18 over the corresponding period of previous year. Fertilizer production having 2.63% weight was down by 0.7% in August, 2017 over August, 2016 and its cumulative index declined by 1.1% during April to August, 2017-18 over the corresponding period of previous year.

The CNX Nifty is currently trading at 9912.75, up by 53.25 points or 0.54% after trading in a range of 9850.65 and 9916.05. There were 38 stocks advancing against 12 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Sun Pharma up by 3.69%, Power Grid Corporation up by 2.01%, Dr. Reddy’s Lab up by 1.76%, Aurobindo Pharma up by 1.73% and HPCL up by 1.70%. On the flip side, Bharti Airtel down by 1.36%, Coal India down by 0.74%, ICICI Bank down by 0.56%, Eicher Motors down by 0.55% and Axis Bank down by 0.46% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 0.44 points or 0.03% to 1,760.11, Nikkei 225 increased 2.44 points or 0.01% to 20,616.51, Jakarta Composite increased 20.76 points or 0.35% to 5,960.22 and Hang Seng increased 193.41 points or 0.69% to 28,366.62.