Equity markets extend gains in late afternoon session

Indian equity markets extended their gains in late afternoon session, with the Sensex and Nifty gaining above 700 and 200 points, respectively. Power Grid, ONGC and Ultratech Cement were the prime gainers among heavy-weights.  Support came in after contracting for two quarters in a row, the Indian economy recorded a 0.4 per cent growth in the October-December quarter, mainly due to a good show by farm, manufacturing, services and construction sectors. Meanwhile, Indian manufacturing activity eased marginally in the month of February but it remains above the boom-or-bust line of 50 that separates expansion from contraction, as firms responded to strong increases in new work intakes by lifting production, input buying and stocks of purchases. Sector wise, Coal sector remained in focus, as Coal production having 10.33 percent weight declined by 1.8 percent in January, 2021 over January, 2020 and its cumulative index declined by 1.9 percent during April to January, 2020-21 over corresponding period of the previous year.

On the global front, Asian markets were trading in green on hopes for President Joe Biden’s stimulus package and bargain-hunting after sell offs last week. European markets were trading higher after sharp losses last week as a selloff in bond markets eased, while optimism over COVID-19 vaccination programme and U.S. stimulus package further aided sentiment.

The BSE Sensex is currently trading at 49807.03, up by 707.04 points or 1.44% after trading in a range of 49440.46 and 50058.42. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 1.35%, while Small cap index was up by 1.53%.

The top gaining sectoral indices on the BSE were Basic Materials up by 2.68%, PSU up by 2.67%, Utilities up by 2.59%, Auto up by 2.37% and Metal was up by 2.32%, while Telecom down by 3.44% were the only losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 5.84%, ONGC up by 5.40%, Ultratech Cement up by 3.76%, Titan Company up by 3.75% and Kotak Mahindra Bank up by 3.67%. On the flip side, Bharti Airtel down by 4.81% were the top losers.

Meanwhile, Indian manufacturing activity eased marginally in the month of February but it remains above the boom-or-bust line of 50 that separates expansion from contraction, as firms responded to strong increases in new work intakes by lifting production, input buying and stocks of purchases. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - stood at 57.5 in February as against 57.7 in January.

The report further said that better demand conditions and successful marketing campaigns reportedly underpinned a further increase in new orders during February. Although easing from January, the pace of growth remained sharp in the context of historical data. New export orders also rose halfway through the final quarter of fiscal year 2020/21, albeit at a modest rate that was softer than in January. Besides, payroll numbers fell further amid the observance of government guidelines aimed at halting the spread of COVID-19 by implementing shift work. The decline was the eleventh in successive months.

On the inflation front, strengthening demand for raw materials and semi-finished items exerted upward pressure on input cost inflation, which picked up to a 32-month high. Factory gate charges also rose, albeit at a modest and softer pace. Meanwhile, goods producers expect output to increase over the coming 12 months, with the overall level of positive sentiment matching that recorded in January. Optimistic growth projections reflected forecasts of an improvement in economic conditions and the lifting of restrictions as the vaccination programme expands.

The CNX Nifty is currently trading at 14750.45, up by 221.30 points or 1.52% after trading in a range of 14638.55 and 14806.80. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 6.16%, Grasim Industries up by 5.37%, ONGC up by 5.32%, UPL up by 4.46% and Hero MotoCorp up by 3.86%. On the flip side, Bharti Airtel down by 4.76%, SBI Life down by 0.36% and Cipla down by 0.18% were the top losers.

Asian markets were trading in green, Nikkei 225 surged 697.49 points or 2.41% to 29,663.50, Hang Seng increased 472.36 points or 1.63% to 29,452.57, Jakarta Composite soared 96.71 points or 1.55% to 6,338.51, Shanghai Composite gained 42.32 points or 1.21% to 3,551.40 and Straits Times was up by 27.60 points or 0.94% to 2,976.64.

European markets were trading higher, UK’s FTSE 100 increased 107.88 points or 1.66% to 6,591.31, France’s CAC increased 82.69 points or 1.45% to 5,785.91 and Germany’s DAX was up by 169.05 points or 1.23% to 13,955.34.