Benchmarks trade jubilantly in early deals

Indian equity benchmarks made an optimistic start and are trading jubilantly in early deals on Friday ahead of industrial production and consumer price inflation data to be released after the market hours. Traders took encouragement with FICCI’s latest quarterly survey showing that India’s manufacturing sector output is expected to register robust growth in the July-September quarter on account of higher production even as the hiring outlook for the sector remains subdued. The survey also revealed that exports to rise in the second quarter. Traders reacted positively to the Revenue Department of the Finance Ministry’s statement that the government yet again increased import duty on several electronic items and telecom equipment to rein in current account deficit (CAD) and stabilise the rupee.

Global cues too remained supportive with most of the Asian counters trading in green at this point of time, even though they opened in red as traders took a breather after a global rout sparked by fears over higher US interest rates. However, the US markets extended losses to end lower on Thursday, as investors continued to fret over rising bond yields and the prospect of higher interest rates.

Back home, stocks related to oil and gas sector edged higher with report that allaying concerns about the return of fuel subsidy regime, Finance Ministry said the government asking oil PSUs to subsidise petrol and diesel prices by Re 1 per litre was a one-time thing and it does not intend to ask them to do it again. In scrip specific developments, TVS Motor surged on introducing new version of scooter Wego and Equitas Holdings advanced with arm introducing Selfe Login to Mobile Banking App.

The BSE Sensex is currently trading at 34560.80, up by 559.65 points or 1.65% after trading in a range of 34279.78 and 34565.76. There were 28 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 2.60%, while Small cap index was up by 2.44%.

The top gaining sectoral indices on the BSE were Realty up by 3.20%, Auto up by 3.05%, Metal up by 2.86%, Consumer Discretionary Goods & Services up by 2.67% and Energy was up by 2.60%, while IT down by 1.42% and TECK was down by 0.99% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.44%, Yes Bank up by 4.04%, Maruti Suzuki up by 3.81%, Adani Ports up by 3.69% and Coal India up by 3.43%. On the flip side, TCS down by 2.57%, Infosys down by 1.26% and Wipro down by 0.72% were the few losers.

Meanwhile, with higher production in manufacturing, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest quarterly survey has stated that the outlook for India’s manufacturing sector is positive for July-September quarter (Q2) even as the hiring outlook for the sector remains subdued. Besides, the survey report showed that exports to rise in the second quarter.

According to the survey report, a total of 61% respondents said output will grow during July-September 2018 quarter from 49% in April-June 2018. This is the highest percentage of respondents expecting higher production since Q2 of 2015-16 where 63% of respondents expected higher production -- a 12-quarter high sentiment. The percentage of respondents reporting low production decreased to 9% in Q2FY19 from 13% in Q1FY19. However, rupee depreciation has not led to any significant increase in exports during the first quarter as 83% of the respondents reported that shipments were not affected much by a weakening rupee.

As per the report, high growth is expected in cement and ceramics, capital goods, automotive and medical devices and technologies in Q2 2018-19, whereas textiles, textile machinery, metal and metal products, electronics and electricals, chemicals, fertilisers and pharmaceuticals, food products and paper products may witness moderate growth. But, hiring outlook for the manufacturing sector remains subdued in near future as 65% of the respondents mentioned that they are not likely to hire additional workforce in next three months.

The FICCI’s latest quarterly survey assessed the sentiments of manufacturers for the second quarter for twelve major sectors -- automotive, capital goods, cement and ceramics, chemicals, fertilisers and pharmaceuticals, electronics and electricals, food products, leather and footwear, medical devices and technologies, metal and metal products, paper products, textiles machinery and textiles. Responses have been drawn from over 300 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 2.8 lakh crore.

The CNX Nifty is currently trading at 10412.45, up by 177.80 points or 1.74% after trading in a range of 10322.15 and 10414.75. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 5.27%, Yes Bank up by 5.25%, Mahindra & Mahindra up by 4.70%, Indiabulls Housing up by 4.13% and UPL up by 4.02%. On the flip side, HCL Tech down by 3.24%, TCS down by 2.60%, Infosys down by 1.14%, Tech Mahindra down by 0.61% and Wipro down by 0.54% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted surged 157.63 points or 1.58% to 9,963.74, Straits Times rose 5.65 points or 0.19% to 3,053.04, Jakarta Composite increased 51.85 points or 0.9% to 5,754.67, Hang Seng jumped 297.16 points or 1.16% to 25,563.53 and KOSPI was up by 30.08 points or 1.39% to 2,159.75.

On the flip side, Nikkei 225 declined 88.71 points or 0.39% to 22,502.15 and Shanghai Composite was down by 3.22 points or 0.12% to 2,580.24.