Post Session: Quick Review

Bulls held a tight grip over the Dalal Street on Thursday’s trading session, with both Sensex and Nifty ending on a strong note. Key indices made a positive start of the day, taking support with the Reserve Bank of India’s (RBI) statement that India’s current account balance (CAB) recorded a surplus of $19.8 billion -- 3.9 percent of GDP -- in the June quarter of FY21, up from the surplus of $0.6 billion in the preceding quarter (Q4FY20), on the back of lower trade deficit. Traders remained positive, after India's manufacturing sector activity improved for the second straight month in September and touched an over eight-and-a-half-year high supported by accelerated increases in new orders and production, even as firms reduced staff numbers. The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) increased from 52.0 in August to 56.8 in September -- highest since January 2012.

Markets maintained their strong gains for the whole trading session, as sentiments remained optimistic with Commerce and Industry Minister Piyush Goyal’s statement that the government is opening up the economy for greater participation of the private sector and has been working in different ways to remove entry barriers for new investments. He said the government has opened up defence manufacturing for the domestic industry in a much bigger way and coal mining for commercial engagement. Some support also came with the RBI’s report stated that India's external debt stood at $554.5 billion at end-June, recording a decrease of $3.9 billion over its level at the end of March 2020.

On the global front, European markets were trading mostly in green as Swedish retailer H&M and French-Italian chipmaker STMicroelectronics jumped after reporting forecast-beating results, while hopes of more U.S. stimulus aided global sentiment. Asian markets ended mixed on Thursday, after the manufacturing sector in Indonesia fell into contraction in September, the latest survey from IHS Markit showed with a manufacturing PMI score of 47.2. That's down from 50.8 in August, and it falls beneath the boom-or-bust line of 50 that separates from expansion. Individually, output and new orders slipped back into decline, while job shedding persisted. Purchasing activity and inventories fell further.

The BSE Sensex ended at 38697.05, up by 629.12 points or 1.65% after trading in a range of 38410.20 and 38738.89. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.73%, while Small cap index was up by 0.69%. (Provisional)

The top gaining sectoral indices on the BSE were Bankex up by 3.73%, Telecom up by 2.02%, Realty up by 1.85%, TECK up by 1.19% and Consumer Disc up by 0.91%, while Energy down by 0.31% and Consumer Durables down by 0.21% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 12.41%, Bajaj Finance up by 5.09%, Axis Bank up by 4.44%, Bajaj Auto up by 4.19% and ICICI Bank up by 4.02%. On the flip side, ITC down by 0.52%, NTPC down by 0.47%, Reliance Industries down by 0.39%, Titan Co down by 0.26% and ONGC down by 0.22% were the top losers. (Provisional)

Meanwhile, reaching its highest mark since January 2012, Indian manufacturing activity signalled strong growth in the month of September 2020, supported by accelerated increases in new orders and production. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - jumped to 56.8 in September as against 52.0 in August. Moreover, the latest reading was the highest in over eight-and-a-half years.

The report further noted that Indian manufacturers lifted output for the second straight month in September, amid reports of loosened coronavirus disease 2019 (COVID19) restrictions and higher demand. The increase was sharp and the third-quickest in the history of the survey. Similarly, there were back-to-back increases in new business inflows. The rate of expansion picked up to the fastest since early-2012.

On the price front, there was a softer and historically weak rise in input costs. Firms reported higher prices paid for a few materials such as aluminium and steel. Output charges, meanwhile, broadly stabilised following five successive months of reduction. Further, the report said that almost one-third of manufacturers expect output growth in the coming 12 months, against 8% that foresee a contraction, resulting in the strongest degree of overall optimism in over four years.

The CNX Nifty ended at 11416.95, up by 169.40 points or 1.51% after trading in a range of 11347.05 and 11428.60. There were 40 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Indusind Bank up by 12.29%, Bajaj Finance up by 5.01%, Axis Bank up by 4.49%, ICICI Bank up by 4.07% and Tech Mahindra up by 3.88%. On the flip side, Dr. Reddy’s Lab down by 1.46%, Hindalco down by 0.66%, ITC down by 0.50%, Reliance Industries down by 0.41% and NTPC down by 0.24% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 28.68 points or 0.49% to 5,894.78, France’s CAC was up by 14.73 points or 0.31% to 4,818.17. On the flip side, Germany’s DAX was down by 23.19 points or 0.18% to 12,737.54.

Asian markets ended mixed on Thursday as renewed optimism over new stimulus package in the United States with encouraging private payrolls data supported investors sentiment. Japan’s Tokyo Stock Exchange was suspended trading in all listed stocks for a whole day after the system was hit by one of its worst ever glitches, kept gains in check. The manufacturing sector in Japan continued to contract in September, albeit at a slower pace, the latest survey from Jibun Bank showed today with a seven-month high manufacturing PMI score of 47.7. Markets in Taiwan, China and Hong Kong were closed for the Mid-Autumn Festival, while the South Korea market was closed for the Chuseok Festival.