Benchmarks gather steam to trade near intra-day high; broader indices too add ground

After bouncing back in green, benchmark equity indices have added further ground thanks to the strength of Consumer Durable, Auto and Realty counters. Post getting a lackluster start in absence of global cues and then edging lower on account of weakness of market-bellwether Reliance Industries, Indian equity markets have now managed to gather some steam on account of good Auto sales figures. Top car maker Maruti Suzuki extended gains to 1 percent following auto sales numbers. Additionally, two-wheeler manufacturer TVS Motor Company surged 1 percent on reporting better-than-expected sales of 1.9 lakh units in October as against expectations of 1.71 lakh units. Further, commercial vehicle maker Tata Motors too has scooped up gains of over 3% percent ahead of sales numbers for October month.

Telecom stocks too are ringing loud ahead of Empowered Group of Ministers (EGoM) meet later in the evening to consider the recommendations of Telecom Commission on spectrum refarming, which calls for existing operators to vacate their spectrum and buy less-efficient airwaves in different band. Additionally, sentiments were also bolstered after India’s manufacturing activity growth inched up in October from September's 10-month low, on account of a pick-up in new orders and an easing of price pressures.

However, stocks from Fast Moving Consumer Goods, Oil & Gas have emerged as the pocket of weakness in the trade. Plunge of Reliance Industries mainly dragged the Oil & Gas counter lower, after anti-corruption activist Arvind Kejriwal accused the energy conglomerate of hoarding natural gas and exerting pressure on the government to favour it. Thus gyrating around the intra-day high, 30 share index, Sensex, accumulating over 15 points, is trading above the 18500 crucial mark. Similarly, widely followed index, Nifty, too gaining over similar magnitude of gains was trading above the psychological 5600 level.  Additionally, the broader indices too added some more ground, with Midcap and Smallcap indices too trading higher by half a percent.

On the global front, Asian shares exhibited mixed trend on Thursday, but losses were curbed as the region's factory activity surveys mostly improved, with China's official and private sector manufacturing PMIs confirming a recovery in the growth trend even if it lacked punch. China's October official PMI rose to 50.2 in October from 49.8 in September, pointing to expanded factory activity in the world's second-largest economy. The final reading of the HSBC PMI hit an 8-month high of 49.5.

Closer home, the BSE Sensex is currently trading at 18524.90, up by 19.52 points or 0.11% after trading in a range of 18549.08 and 18445.18. There were 19 stocks advancing against 11 declines on the index.

The broader indices too added ground; the BSE Mid cap and Small cap indices were trading up by 0.77% and 0.68% respectively.

The top gaining sectoral indices on the BSE were, CD up by 4.15%, Auto up by 1.73%, Realty up by 1.12%, HC up by 0.960% and Power up by 0.71%. While, FMCG down by 1.05%, Oil and Gas down by 0.71% were the only losers on the index.

The top gainers on the Sensex were Tata Motors up by 3.57%, Bharti Airtel up by 3.38%, Wipro up by 2.81%, Cipla up by 2.17% and Hero MotoCorp up by 1.44%.

On the flip side, HUL down by 2.21%, ITC down by 1.36%, ONGC down by 1.29%, Hindalco Industries down by 0.90% and Sterlite Industries down by 0.75% were the top losers on the Sensex.

Meanwhile, supported by a pick-up in new orders and an easing of price pressures, India’s manufacturing activity growth inched up in October from September's 10-month low. The new orders sub-index, an indicator of future output, increasing for forty-third consecutive month, jumped to 54.9 from 54.4 in September, while export orders registered growth for the second straight month although at a slightly slower pace.

However, the rate of expansion was solid and more or less in line with September’s four-month high. Stronger international demand, the launch of new products and favorable exchange rate conditions mainly was responsible for new export business growth.

According to the HSBC purchasing managers’ index (PMI), a headline index designed to measure the overall health of the manufacturing sector, expanded at steady space of 52.9 in October, broadly unchanged from September reading of 52.8. A PMI reading above 50 indicates expansion in the sector, while one below suggests decline. The index has remained above 50 for over three and half years now. Meanwhile, data released last month showed manufacturing rose 2.9 percent in August from a year earlier after contracting 0.4 percent in the previous month.

Additionally eight successive month of growth was recorded for employment in the month of October, with payroll numbers too being raised to support new orders growth. The inflation picture notably eased with both output and input prices rising at a slower pace. While input prices inflation in the Indian goods-producing sector persisted in October, the pace of increase was the slowest in 25-months, output prices increased at slowest rate in 23-months.

The October reading of HSBC PMI points to a further improvement in the health of the manufacturing sector, which witnessed the weakest growth rate in ten months in September. However, going forward, the recovery in manufacturing sector, which accounts for around 15 percent of India's gross domestic product, is likely to be ‘slow’, HSBC said, adding that outstanding work in the Indian manufacturing sector was accumulated at a sharp rate during October mainly due to persistent power shortages.

The S&P CNX Nifty is currently trading at 5,629.75, up by 10.05 points or 0.18% after trading in a range of 5,634.30 and 5,601.95. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were Tata Motors up by 3.69%, Bharti Airtel up by 3.28%, Wipro up by 2.77%, Cipla up by 2.38% and Reliance Infra up by 2.36%.

On the flip side, HUL down by 2.04%, ONGC down by 1.42%, ITC down by 1.34%, Hindalco Industies down by 0.99%, and Cairn India down by 0.94%, were the major losers on the index.

Asian equity indices were trading mostly in the red; Kospi Composite declined 0.71%, Jakarta Composite lost 0.98%, Straits Times slid 0.29%, and KLSE Composite shed 0.07% while Hang Seng added 0.55%, Shanghai Composite surged 1.79%, Taiwan Weighted gained 0.19% and Nikkei 225 up by 0.21% were the gainers.