Benchmarks extend gains in afternoon session, trade at intra-day high level

Indian equity benchmarks extended early gains and reached at their intra-day high level in the afternoon session on the back of buying in Metal, Auto and IT stocks. Metal stocks firmed up on hopes that encouraging data from China would result in higher demand as it the world's largest consumer of metals. China’s non-manufacturing Purchasing Managers Index rises to 55.4 in September from 53.9 in August. Sesa Goa, Tata Steel, and Jindal Steel were trading up over 4% on BSE. Further, IT stocks continued to trade firm ahead of Infosys' second quarter earnings due to be released next week. Investors’ sentiments also got a support as Indian rupee extends gains after the current account deficit (CAD) for the first quarter of the current fiscal was in line with market expectations. Buying was also witnessed in Auto stocks on better-than-expected September sales numbers. Tata Motors, Bajaj auto and M&M each were trading up by 2 percent higher on BSE. Further, the shares of cement makers are also in demand on hopes that the cement prices are likely to go up further in the post-monsoon quarters and on the back of a festive season.

On global front, Asian equity indices were trading mixed as the continuation of the US federal government shutdown weighed on investor sentiment despite firm China’s non-manufacturing Purchasing Managers Index data. Back home, the market breadth remained positive, out of 2,024 stocks traded, 1,275 stocks advanced, while 641 stocks declined on the BSE. 

The BSE Sensex is currently trading at 19,776.81 up by 259.66 points or 1.33% after trading in a range of 19,823.95 and 19,583.97. There were only 27 stocks advancing against 3 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.09%, while Small cap index up by 0.92%.

The gaining sectoral indices on the BSE were Metal up by 3.36%, IT up by 2.32%, Auto up by 2.09%, Bankex and Realty both up by 2.07%. While, FMCG down by 0.92% were remained the only losing indices on BSE.

The top gainers on the Sensex were Sesa Goa up by 5.33%, TCS up by 4.03%, Tata Steel up by 4.01%, Jindal Steel up by 3.16% and Wipro up by 3.06%. On the flip side, Hindustan Unilever down by 2.11%, ITC down by 1.53%, Bharti Airtel down by 0.84% were the only losers on the Sensex.

Meanwhile, amid rising concerns over the fiscal deficit number touching around three-fourths of the budget estimate in the first five months of the fiscal, Finance Minister P Chidambaram said the government is planning to trim non-plan expenditure in order to meet the fiscal deficit target of 4.8 percent for the current fiscal.

Recently, to cut government spending in non-critical areas, the government has announced a slew of austerity measures including banning government departments for holding meetings in 5-star hotels among others. Meanwhile, the government has been introducing austerity measures since 2008-09. Earlier, in November 2012, austerity measures announced by government helped it to contain the fiscal deficit at 4.9 percent of GDP in FY13, against the budgeted target of 5.1 percent of GDP.

By adding further, Finance Minister said that the government had deliberately front-loaded the planned expenditure, which was running around 4-5 per cent ahead of the year earlier, as the borrowing reached 74.6 percent.

Chidambaram said he was confident on Indian economy’s growth to recover in the second half of this fiscal year on the back of rising core sector growth, higher exports and credit expansion to some sectors. Buoyed by better-than-expected Q1 current account deficit (CAD) numbers at 4.9 percent of GDP, Chidambaram said that CAD for the current fiscal will be contained lower than initially projected. The government has set a target to contain CAD at $70 billion or 3.7 percent of GDP for the financial year.

The CNX Nifty is currently trading at 5,870.35 up by 90.30 points or 1.56% after trading in a range of 5,878.75 and 5,802.70. There were 47 stocks advancing against 3 declines on the index.

The top gainers of the Nifty were Sesa Goa up by 5.39%, JP Associate up by 5.15%, Axis Bank up by 5.00%, Ultra-tech Cement up by 4.64% and Ambuja Cement up by 4.50%. On the flip side, Hindustan Unilever down by 2.14%, ITC down by 1.60% and Bharti Airtel down by 1.04% were the major losers on the index.

The Asian equity indices were trading mixed; Jakarta Composite up by 0.73%, Seoul Composite up by 0.03,Taiwan Weighted up by 1.73% and Hang Seng up by 0.89%. While, KLSE Composite down by 0.01%, Nikki 225 down by 0.10% and Straits Times down by 0.18%.