Benchmarks trade jubilantly in early deals on firm global cues

Buoyed by firm global cues, Indian equity benchmarks made a gap-up opening and are trading jubilantly with frontline gauges recapturing their crucial 33,500 (Sensex) and 10,300 (Nifty) levels in early deals on Monday. Traders took some encouragement with IMF stating that the Indian economy now seems to be on its way of recovering from disruptions caused by demonetisation and roll-out of goods and services tax. At the same time, the IMF has underscored the significance of reforms in other key sectors like education, health and improving the efficiency of banking and financial systems. Investors also took some support with industry body FICCI’s report that manufacturers in the country have a positive outlook for the sector in the January-March quarter on the back of higher production. The proportion of respondents reporting higher output growth during the Q4 2017-18 has increased significantly to 55 per cent from 47 per cent in Q3.

Global cues too remained supportive with Asian markets rallying at this point of time, tracking stateside gains in the last session on expectation-topping jobs data. The US markets edged higher on Friday as geopolitical tensions eased after North Korean leader Kim Jong Un had offered to halt nuclear and missile tests and expressed his desire to meet with U.S. President Donald Trump through South Korean national security adviser Chung Eui-yong.

Back home, some support also came with report stating that the Centre is expecting to get around Rs 8,044 crore on account of dividend from Coal India as the miner's board approved payment of interim dividend for the financial year 2017-18 at a rate of Rs 16.50 per share. The miner's total payout on account of this would be to the tune Rs 10,242 crore. Infrastructure related stocks edged higher after NHAI has said that it will strive to construct 1,100 km of highways this month to achieve its target of building 3,500 km in the ongoing fiscal.

The BSE Sensex is currently trading at 33582.50, up by 275.36 points or 0.83% after trading in a range of 33468.16 and 33622.12. 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 0.58%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Metal up by 1.54%, IT up by 1.52%, TECK up by 1.30%, FMCG up by 1.29% and Basic Materials was up by 0.98%, while PSU down by 0.05% was the lone losing index on BSE.

The top gainers on the Sensex were ITC up by 2.72%, Tata Steel up by 2.57%, HDFC up by 1.46%, Wipro up by 1.44% and Sun Pharma up by 1.38%. On the flip side, SBI down by 1.03%, Power Grid Corporation down by 0.59%, Asian Paints down by 0.46%, Coal India down by 0.34% and Tata Motors - DVR down by 0.34% were the top losers.

Meanwhile, citing higher production in the ongoing quarter, India’s largest apex body of business organisation, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest quarterly survey on Indian manufacturing sector has stated that outlook for the manufacturing sector is positive for the January-March quarter of the current fiscal year 2017-18 (FY18).

As per the survey report, the proportion of respondents reporting higher output growth during the Q4 FY18 has increased significantly to 55% from 47% in Q3 FY18. Also, the percentage of respondents reporting low production has come down to 11% in the Q4 FY18 from 15% in the previous quarter of the current fiscal year.  It added that in terms of order books, 51% of the respondents said they are expecting higher number of orders as against 42% in the previous quarter, which is a sign of revival.

The report stated that high growth is expected in the automotive and capital goods segments in Q4 FY18, while segments like cement and ceramics, leather and footwear, chemicals and pharmaceuticals are expected to see moderate growth. It also said that low growth is expected in textile machinery and textiles sector in the Q4 FY18. According to the survey, the cost of production as a percentage of sales for manufacturers has risen significantly for 62% respondents in Q3 FY18, on the back of increase in cost of raw materials, increased wages, power cost and higher Goods and Services Tax (GST) rates on certain products.

The CNX Nifty is currently trading at 10324.20, up by 97.35 points or 0.95% after trading in a range of 10295.45 and 10328.45. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.94%, ITC up by 2.84%, Tech Mahindra up by 2.49%, Vedanta up by 2.25% and Tata Steel up by 2.14%. On the flip side, SBI down by 0.97%, Asian Paints down by 0.63%, Hindustan Unilever down by 0.23%, Ambuja Cement down by 0.23% and Yes Bank down by 0.15% were the top losers.

All the Asian markets are trading in green; FTSE Bursa Malaysia KLCI gained 13.68 points or 0.74% to 1,857.60, Shanghai Composite increased 17.01 points or 0.51% to 3,324.18, KOSPI Index surged 27.89 points or 1.13% to 2,487.34, Jakarta Composite jumped 38.05 points or 0.59% to 6,471.37, Taiwan Weighted soared 141.72 points or 1.3% to 11,006.54, Nikkei 225 added 286.52 points or 1.33% to 21,755.72 and Hang Seng up by 472.96 points or 1.53% to 31,469.17.