Markets recover ground; Sensex up by over 100 points

Indian equity benchmarks recovered ground in late afternoon session, with Sensex logging notable gains of over 100 points, aided by firm European markets. The markets spurt on back of positive macroeconomic data along with gains led by the broader indices. Goods and Services Tax (GST) mop-up rose to Rs 94,442 crore in September, from Rs 93,690 crore in the previous month. Of the Rs 94,442 crore collected last month, Central GST (CGST) mop-up is Rs 15,318 crore, State GST (SGST) is Rs 21,061 crore, Integrated GST is Rs 50,070 crore (including Rs 25,308 crore collected on imports) and cess is Rs 7,993 crore (including Rs 769 crore collected on imports). Separately, business activity in Indian manufacturing sector picked up in the month of September 2018, amid firmer gains in new orders, output and employment. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 52.2 in September from 51.7 in August. Traders took some support with ASSOCHAM’s latest report showing that India’s exports hold a promising outlook, with the US economy growing at its best in four years coupled with the rupee depreciation leading to enhanced net revenue realizations. Some comfort also came with the joint report between the International Monetary Fund (IMF), World Trade Organization (WTO) and World Bank stating that India's economic reforms and growth story provides compelling indication that openness in services contributes to long run growth performance.

On the global front, European markets were trading in green; despite Eurozone inflation accelerated in September on food and energy prices. As per flash data from Eurostat, inflation rose marginally to 2.1%, in line with expectations, from 2% a month ago. Besides, UK consumer confidence weakened in September amid heightened uncertainty surrounding Brexit. The survey data from GfK showed that the consumer sentiment index dropped to (-) 9 in September from (-) 7 in August. However, Asian markets were trading mixed, as trade tensions lingered and two gauges of activity in China's manufacturing sector worsened in September, raising concerns about the demand outlook. China's official manufacturing purchasing managers index stood at 50.8 in September versus 51.3 in August, while the Caixin manufacturing PMI declined to 50 from 50.6, the lowest since May 2017. Separately, a key quarterly economic survey by the Bank of Japan showed that business confidence among large Japanese manufacturers has declined for the third straight quarter, raising concerns about global trade.

Back home, on the sectoral front, metal stocks gained, after India's crude steel output increased 3.7% to 8.8 million tonne (MT) in August 2018. According to the World Steel Association (worldsteel), the country had produced 8.5 MT during the same month last year. Further, consumer durable stocks remained in limelight, amid reports that consumer durable makers expect a double-digit growth in sales this festive season despite a hike in customs duty as most of them have chosen to absorb the impact and not to pass it on to consumers. In scrip specific development, Escorts surged after the company’s Agri Machinery Segment (EAM) reported sale of 10,617 tractors in September 2018 as compared to 10,353 tractors in September 2017, registering growth by 2.5%.

The BSE Sensex is currently trading at 36343.58, up by 116.44 points or 0.32% after trading in a range of 35960.65 and 36380.69. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.35%, while Small cap index was down by 1.30%.

The top gaining sectoral indices on the BSE were IT up by 2.26%, TECK up by 1.87%, Utilities up by 1.04%, Power up by 0.88% and Metal up by 0.78%, while Realty down by 2.54%, Capital Goods down by 2.01%, Energy down by 1.93%, Telecom down by 1.31% and Consumer Durables down by 1.25% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 7.06%, TCS up by 2.85%, Tata Motors - DVR up by 2.75%, Infosys up by 2.46% and HDFC up by 2.42%. On the flip side, Axis Bank down by 3.86%, Bharti Airtel down by 3.33%, Indusind Bank down by 2.98%, Larsen & Toubro down by 2.51% and Reliance Industries down by 2.49% were the top losers.

Meanwhile, snapping two-month easing trend, business activity in Indian manufacturing sector picked up in the month of September 2018, amid firmer gains in new orders, output and employment. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 52.2 in September from 51.7 in August. This is the 14th consecutive month that the manufacturing PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.

The report further highlighted that manufacturing sector saw a solid growth, on the back of gains in both domestic and foreign demand. Besides, export sales surged to its highest level since the start of the year. As per the report, high product quality helped to drive growth of new order book, while rising new work and increased production helped to drive growth of buying activity during September. Moreover, staffing levels rose for a sixth successive month and at the fastest rate since June, while backlogs of work came down slightly, the first such decline since March.

On the price front, the manufacturing companies continued to face higher input costs during September, as strong US dollar and supply shortages had exacerbated high global prices for steel and fuel. Consecutively, the firms attempt to pass on their higher cost burdens wherever possible via an increase in their own charges to the consumers. However, output prices rose at a modest rate in the reported month compared to August. Meanwhile, manufacturers remain confident that output will increase over the coming year. 

The CNX Nifty is currently trading at 10949.35, up by 18.90 points or 0.17% after trading in a range of 10821.55 and 10963.10. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 6.23%, Hindalco up by 4.94%, Indiabulls Housing Finance up by 4.93%, TCS up by 3.04% and HDFC up by 2.54%. On the flip side, HPCL down by 4.41%, Ultratech Cement down by 4.09%, Axis Bank down by 4.02%, Bharti Airtel down by 3.41% and Indusind Bank down by 3.29% were the top losers.

Asian markets were trading mixed; Nikkei 225 increased 125.72 points or 0.52% to 24,245.76 and Taiwan Weighted was up by 45.46 points or 0.41% to 11,051.80. On the flip side, Straits Times decreased 4.65 points or 0.14% to 3,252.40, Jakarta Composite fell 28.47 points or 0.48% to 5,948.08 and KOSPI was down by 4.19 points or 0.18% to 2,338.88.

All European markets were trading in green; UK’s FTSE 100 surged 2.20 points or 0.03% to 7,512.40, France’s CAC rose 13.53 points or 0.25% to 5,507.02 and Germany’s DAX was up by 81.89 points or 0.66% to 12,328.62.