Benchmarks off intra-day’s high; Nifty trades sub 6000 psychological level

Bout of profit-booking which was witnessed at higher levels, have mainly dragged Indian equity markets from their intra-day’s high level, with benchmark 50 share index, Nifty, now oscillating sub psychological 6000 level. Meanwhile, the barometer 30 share index, Sensex, too has retraced from 19750 mark.

However, the overall sentiment at D-street continues to be upbeat on account of improved risk appetite after the U.S. House of Representatives approved a deal on the so-called fiscal cliff, sparking broad-based buying. ‘Fiscal Cliff’ drama which was resolved by final vote also earned gains for the most of the Asian pacific shares. However, markets in Japan and China remained shut for public holidays. The United States averted economic calamity on Tuesday when lawmakers approved a deal to prevent huge tax hikes and spending cuts that would have pushed the world's largest economy off a 'fiscal cliff' and into recession.

Back on the home turf, gains in Capital Goods, Consumer Durables and Oil & Gas counters, also fortified the sentiment at D-Street. Nevertheless, all the 13 sectoral indices on BSE were trading in green at this point of time. Meanwhile, banking shares rose for the second consecutive session on hopes of rate cut of a January rate cut gathered steam. ICICI Bank and State Bank of India stocks scooped up gains of close to a percent.

Additionally, good macro-economic data also added to the rally at D-street. Signaling further improvement in the health of the Indian manufacturing sector, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy posted a good advancement in December, by surging to its six-month high to 54.7 from 53.7 in November, its biggest monthly rise since January 2012.  The overall market breadth on BSE is in the favour of advances which have thumped declines in the ratio of 1740:936, while 118 shares remained unchanged.

The BSE Sensex is currently trading at 19745.05, up by 164.12 points or 0.84% after trading in a range of 19756.23 and 19686.50. There were 25 stocks advancing against 5 declines on the index.

The broader indices too were trading in green; the BSE Mid cap and Small cap index were trading higher by 0.81% and 1.10% respectively.

The top gaining sectoral indices on the BSE were, Capital Goods up by 1.54%, Consumer Durable up by 1.49%, Oil & Gas up by 1.23%, Metal up by 1.16% and Bankex up by 1.16%, there were no losers.

The top gainers on the Sensex were BHEL up by 2.60%, Gail India up by 2.49%, Sterlite Industries up by 2.06%, HDFC up by 1.91% and Maruti Suzuki up by 1.71%.

On the flip side, Wipro down by 0.59%, Coal India down by 0.33%, Mahindra & Mahindra down by 0.26%, Hindustan Unilever down by 0.24% and ITC down by 0.03% were the losers on the Sensex.

Meanwhile, signaling further improvement in the health of the Indian manufacturing sector, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy posted a good advancement in December, by surging to its six-month high to 54.7 from 53.7 in November, its biggest monthly rise since January 2012.

Boosted by strong factory output and a spike in new orders, both of which hit their highest levels since June, Indian goods-producing sector has shown output growth advancement for the forty-fifth consecutive month. The PMI index has now stayed above the 50 mark that separates growth from contraction for almost four years.

New orders and export sales both increased at manufacturing companies in India during December. While, the volume of incoming new work at manufacturers in India increased in December. The rate of growth was sharp, and the fastest in six months. New export orders also expanded, and at a solid pace.  The new orders sub-index in the survey, a reliable gauge of future output, jumped to 58.0 from 55.8 in November, its biggest monthly jump since April, indicating that the factory sector might be in for better days ahead.

Further, December data signalled job creation in the Indian goods-producing sector, amid reports of higher production requirements. However, labour shortages and demand for higher salaries weighed on payroll numbers.

Meanwhile, input prices in the Indian manufacturing sector also rose for the forty-fifth consecutive month. According to the companies monitored, the rise in input costs reflected increased raw material prices, stronger demand and un-favourable exchange rates. Consequently, average selling prices rose again.

Nevertheless, the survey, which expects higher growth on account of firmer demand, also pointed at Inflation pressures remaining firm in the coming months. However, after rising to the highest level in the year for the month of September, the wholesale price index (WPI), India's main inflation gauge, unexpectedly cooled down to 7.24% (Provisional) for the month of November, 2012.

The S&P CNX Nifty is currently trading at 5,999.65, up by 48.80 points or 0.82% after trading in a range of 6,006.05 and 5,982.00. There were 40 stocks advancing against 10 declines on the index.

The top gainers of the Nifty were JP Associate up by 2.89%, BHEL up by 2.79%, Punjab National Bank up by 2.33%, IDFC up by 2.25% and Gail India up by 2.24%.

On the flip side, Wipro down by 0.71%, Mahindra & Mahindra down by 0.34%, Reliance Infra and Coal India were down by 0.31% and Asian Paints down by 0.30% were the top losers on the index

Most of the Asian equity indices were trading in green; Hang Seng soared 2.43%, Jakarta Composite advanced 0.59%, Straits Times surged 1.25%, KOSPI Composite added 1.71% and Taiwan Weighted spurted 1.04%. On the flip side, KLSE Composite down by 0.79% was the lone loser amongst the Asian pack. 

Markets in Japan and China remained shut for public holidays and will reopen on Friday.