Benchmarks cool off from day’s high; Oil & Gas, PSU stocks act spoil sports

Benchmark equity indices after soaring to-day’s high are witnessing bit of profit-booking as some investors preferred cashing out their gains on slew of positive economic news at home front coupled with mostly positive regional counterparts. On the macro-front, after better than expected Q2 GDP at 4.8% against 4.4% in the previous quarter, the HSBC Purchasing Managers’ Index (PMI), snapping its three consecutive months’ declining streak climbed from 49.6 in the previous month to 51.3 in November, in its highest reading since April. Off lows, Sensex and Nifty, were trading above the crucial 20,850 and 6200 psychological levels respectively, with gains of close to half a percent.

On the global front, Asian shares were trading mostly positive after a decent reading on China manufacturing calmed worries about the health of the world's second-biggest economy. China's factory activity maintained steady growth momentum in November, boosted by resilient new orders, though the pace of expansion eased slightly from October, the HSBC/Markit Purchasing Managers' Index (PMI) showed.

Back on Dalal Street, with across the board buying taking place, only Oil & Gas and Public Sector pivotal were trading downbeat, however top gainers of the session were stocks from Healthcare, Capital Goods and banking stocks. Some good news on inflation front in the encouraging factory output data, suggesting Reserve Bank of India (RBI) getting closer to the end of its tightening cycle, mainly fired up banking stocks. The overall market breadth on BSE is in the favour of advances which thumped declines in the ratio of 1308:834; while 130 shares remained unchanged.

The BSE Sensex is currently trading at 20898.85, up by 106.92 points or 0.51% after trading in a range of 20941.00 and 20770.51. There were 23 stocks advancing against only 7 stocks declining on the index.

The broader indices too trimmed some gains; the BSE Midcap and Smallcap indices were trading up by 0.79% and 0.85% respectively.

The gaining sectoral indices on the BSE were Healthcare up by 1.82%, Capital Goods up by 1.54%, Bankex up by 1.42%, Realty up by 0.80% and Auto up by 0.48%. While, Oil and Gas down by 0.35% and PSU down by 0.09% were the losing indices on BSE.The top gainers on the Sensex were Sun Pharma up by 3.13%, Jindal Steel up by 3.06%, ICICI Bank up by 2.46%, L&T up by 2.08% and SBI up by 1.30%. On the flip side, ONGC down by 2.36%, Hindalco Inds down by 1.55%, Hindustan Unilever  down by 1.51%, Gail India down by 1.26% and Maruti Suzuki down by 0.61%.

Meanwhile, in its highest reading since April, the HSBC Purchasing Managers’ Index (PMI), a headline index designed to measure the overall health of the manufacturing sector, snapping its three consecutive months’ declining streak climbed from 49.6 in the previous month to 51.3 in November, mainly led by the rise in new domestic orders. Indicating a slight improvement in operating conditions, this was the first reading above 50.0 recorded since July.

Strengthened demand resulted in new order growth and although modest, the rise in new work intakes that ended five month period of contraction, mainly helped boost the PMI. Export business which increased at a marginal and slower rate, suggested that the domestic market was the main source of new order gains. Meanwhile, the new orders sub-index rose to 51.9 last month; it’s highest since April and against 48.9 in October.

Sector wise data indicated that consumer goods continued to outperform the other two categories monitored by the survey, with both output and new orders rising at solid rates in the latest month. This was closely followed by intermediate goods.

Further, the employment activity increased for the second consecutive month, though the pace of job creation remained marginal and weaker than its long run average. Additionally, inflationary pressures in the Indian manufacturing economy too softened in November, while purchase prices increased at the weakest pace since August, Input costs rose at weaker rates across all three monitored sub-sectors.

The latest data is quite encouraging as this points some good news on inflation as well, suggesting that Reserve Bank of India (RBI) is getting closer to the end of its tightening cycle, which so far has hiked interest rates by 25 basis points each at its back-to-back meetings to curb rising prices, taking the policy repo rate to 7.75%. However, the survey also added that RBI may still need to notch rates a bit up further.

The CNX Nifty is currently trading at 6,214.65, up by 38.55 points or 0.62% after trading in a range of 6,228.70 and 6,171.15. There were 40 stocks advancing against 10 declining on the index.

The top gainers of the Nifty were Ranbaxy up by 6.14%, Sun Pharma up by 3.22%, Jindal Steel up by 3.04%, Axis Bank up by 2.73% and IDFC up by 2.45%. On the flip side, ONGC down by 2.57%, Hindalco Inds down by 1.83%, HUL down by 1.67%, Gail India down by 1.27% and Power Grid down by 1.26% were the major losers on the index.

The Asian equity indices were trading mixed; Straits Times was up by 0.36%, Jakarta Composite added 1.55%, Taiwan Weighted edged higher 0.09%, Hang Seng rose 0.46% and KLSE Composite gained 0.14%. While, Shanghai Composite plunged by 1.04%, Nikkei 225 inched lower by 0.04%, and Seoul Composite down by 0.69% were the losers amongst Asian pack.