Benchmarks add minor gains; Bankex, Realty lead

Indian equities added minor gains in the late afternoon session on account of buying in front line counters. The sentiments were relieved for the passing week after India’s core sector, the eight key infrastructure industries, grew at their fastest pace in seven months at 3.7% in August compared with an expansion of 3.1% in the previous month, boosted by robust performance in electricity, cement, steel and petroleum refinery products. The mood were on upbeat mood after Bank of America Merrill Lynch (BofA-ML) lowered its current account deficit (CAD) target for India for the current financial year to 3.2% of the GDP from 4% earlier. The Finance Ministry also showed confidence that economy will improve in second quarter of current fiscal, and stated that steps would be taken to incentivize growth and RBI will take a call on interest rate. Traders were seen piling positions in Bankex, Realty and Capital Goods stocks, while selling was witnessed in Metal, Oil & Gas and Power sector stocks.  In scrip specific development, oil marketing companies (OMCs) BPCL, HPCL and IOC were trading under pressure as government slashed petrol price by Rs 3.05 per litre.

On the global front, all the Asian markets were trading in green while the European markets were trading on mixed note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 5,750 and 19,400 levels respectively. The market breadth on BSE was positive in the ratio of 1175:919 while 131 scrips remained unchanged. 

The BSE Sensex is currently trading at 19498.90, up by 119.13 points or 0.61% after trading in a range of 19521.74 and 19264.72. There were only 17 stocks advancing against 12 declines while 1 stock remained unchanged on the index.

The broader indices were too trading in green; the BSE Mid and Small cap indices were trading up by 0.52% and 0.51% respectively.

The gaining sectoral indices on the BSE were Bankex up by 2.30%, Realty up by 2.19%, Capital Goods up by 1.39%, Auto up by 0.68% and Consumer Durables up by 0.43%. While, Metal down by 0.49%, Oil & Gas down by 0.48%, Power down by 0.40%, PSU down by 0.25% and FMCG down by 0.10% remained the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.46%, ICICI Bank up by 2.95%, HDFC Bank up by 2.63%, HDFC up by 1.85% and SBI up by 1.83%. On the flip side, Tata Power down by 3.21%, NTPC down by 2.29%, Sesa Goa down by 1.96%, ONGC down by 1.83% and Hindustan Unilever down by 1.62% were the top losers on the Sensex.

Indian manufacturing activity shrank for a second consecutive month in September mainly on account of declined new orders, showing Asia’s third-largest economy grapples with its worst slowdown in a decade. The HSBC Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, stood at 49.6 points in the month of September, marginally up from 48.5 points in August, indicating moderate contraction in the sector as a reading above 50 indicates growth and below that depicts contraction.

Slowdown in manufacturing sector activities and declined new business orders suggested that an uncertain economic outlook had dampened client confidence and also made manufacturing firms to cut staff. The new orders sub-index increased at 49.6 in the reported month as against 47.5 in August, however it remained below 50 for the fourth consecutive month. However, overall rate of contraction in manufacturing output and new orders contracted at slower rates since August. 

Further, the survey indicated that the contraction of export business accelerated to the sharpest in over two years as the depreciation in rupee value against dollar had resulted in higher prices paid for inputs, which also limited firms’ ability to price competitively. Afterward, Indian manufacturers have also reduced their buying activity for the second month in September. Overall input cost rose sharply with the index measuring purchasing costs climbed to its highest mark in 15 months. Consequently, prices charged by manufacturing firms were raised further, however, the rate of charge inflation was slight and slowest in three months.

The CNX Nifty is currently trading at 5,770.40, up by 35.10 points or 0.61% after trading in a range of 5,777.50 and 5,700.95. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were DLF up by 6.05%, Ranbaxy up by 5.68%, BHEL up by 3.46%, ICICI Bank up 3.10% and IndusInd Bank up by 3.01%. On the flip side, Tata Power down by 3.45%, BPCL down by 2.51%, Sesa Goa down by 2.10%, ONGC down by 2.00% and NTPC down by 2.00% were the major losers on the index.

The Asian equity indices were trading in green; Straits Times up by 0.34%, Jakarta Composite up by 0.86%, Seoul Composite up by 0.10%,  Taiwan Weighted up by 0.16%, Nikkei 225 up by 0.20% and KLSE Composite up by 0.02%.

Hong Kong market was closed on account of National Day while Shanghai Stock Market will remain close from October 1 on account of National Day and will open for trading on October 8.

The European markets were trading on a mixed note; France’s CAC 40 was up 0.78%, Germany’s DAX added 0.62% and UK’s FTSE 100 dropped 0.13%.