Markets continue strong trade; Sensex gains more than 200 points

Key Indian benchmarks continued to trade strong in late morning session, with Sensex and Nifty gaining more than 200 and 50 points, respectively, as Finance Minister Arun Jaitley started delivering his Budget speech. The budget said that the country is on track for GDP growth of over 8% and will emphasize on generating higher income for the farmers. Sentiments remained upbeat, as Central Statistics Office has revised the Gross Domestic Product (GDP) growth rate for 2015-16 to 8.2 per cent from the earlier estimates of 8 per cent and kept the 2016-17 growth unchanged at 7.1 per cent. Firm global cues along with heavy buying in Capital Goods, Industrials and Realty stocks, too aided the markets’ sentiments. In line with the larger peers, the broader indices were too trading higher. Traders paid no heed towards the report that India’s manufacturing sector growth lost its momentum in the month of January, amid slower expansion in output and new orders. As per the survey report, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance- slowed down to 52.4 in January from 54.7 in December.

On the sectoral front, agriculture stocks gained as government announces MSP for Kharif crops to be 1.5X of cost of produce, while Education & Training stocks surged as government proposes to move from blackboard to digital board.

On the global front, Asian markets were trading in mostly in green, tracking overnight gains on the Wall Street following the Federal Reserve’s decision to keep rates unchanged. Back home, in scrip specific development, HCL Infosystems was trading higher after the company received an approval for sale of CARE Business, a division of HCL Services (Wholly owned subsidiary).

The BSE Sensex is currently trading at 36200.17, up by 235.15 points or 0.65% after trading in a range of 36021.88 and 36226.97. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.11%, while Small cap index was up by 0.87%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.09%, Industrials up by 1.28%, Realty up by 0.95%, Auto up by 0.88% and FMCG up by 0.87%, while Metal down by 0.80%, Consumer Durables down by 0.55%, Telecom down by 0.25% and Healthcare down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.36%, Larsen & Toubro up by 2.91%, Indusind Bank up by 2.16%, Kotak Mahindra Bank up by 1.73% and ITC up by 1.57%. On the flip side, Dr. Reddy’s Lab down by 1.63%, Tata Steel down by 1.45%, Coal India down by 1.41%, NTPC down by 0.97% and Sun Pharma down by 0.93% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that domestic cement demand continued to remain weak in the ongoing financial year so far and is likely to register a modest growth of around 2 percent in the fiscal year 2017-18, because of factors such as weak real estate activity, sand shortage and Goods and services tax (GST) implementation issues. Besides, it indicated that the cement off-take continued to be weak in November 2017 and showed only a marginal increase of 0.5% month-on-month basis at 24.1 million metric tonne (MMT).

Though, the rating agency highlighted that cement demand registered year-on-year growth of 17.3 percent in November 2017, largely due to the base effect arising out of low production of 20.5 MMT in November 2016, the month in which demonetisation was announced. It also showed that during April-November, cement production witnessed a marginal growth of 0.6 percent at 190.0 MMT as compared to 188.8 MMT in the corresponding period. It noted that production declined 3.3 percent in June quarter and by 0.4 percent in September quarter year-on-year. It added that during the first quarter, demand was adversely impacted due to various local issues across regions.

According to the report, cement demand in the North, especially in Uttar Pradesh and Punjab was affected due to sand shortage and labour unavailability, while in the west, the implementation of the Real Estate Regulatory Authority (RERA) Bill resulted in slowing down of the construction activity. Besides, it mentioned that in south, Tamil Nadu and Kerala were worst hit as demand was affected due to sand shortage, drought (impacting rural offtake) and weak housing activity. The report stated that a pick-up in the housing segment - mainly affordable and rural housing, and infrastructure segment, mostly road and irrigation projects, is likely to help improve the cement demand growth to 4-5 percent in 2018-19.

The CNX Nifty is currently trading at 11086.65, up by 58.95 points or 0.53% after trading in a range of 11039.50 and 11103.50. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.95%, Mahindra & Mahindra up by 2.80%, Indusind Bank up by 2.43%, Eicher Motors up by 2.14% and Bajaj Finance up by 1.71%. On the flip side, Coal India down by 1.72%, Dr. Reddy’s Lab down by 1.68%, Tata Steel down by 1.48%, Aurobindo Pharma down by 1.45% and Vedanta down by 1.35% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 4.6 points or 0.18% to 2,571.06, Jakarta Composite increased 36.25 points or 0.55% to 6,641.88, Taiwan Weighted increased 56.46 points or 0.51% to 11,160.25 and Nikkei 225 increased 345.34 points or 1.5% to 23,443.63.

On the flip side, Hang Seng decreased 75.6 points or 0.23% to 32,811.67 and Shanghai Composite decreased 39.53 points or 1.14% to 3,441.30.