Post Session: Quick Review

Bulls continued to party for third straight session, but this time around on account of slew of positive macro-economic data, which encouraged investors to go gung-ho on local equities amidst mostly positive global set-up. After the better than expected Q2 GDP data at 4.8% as against 4.4% in the previous quarter, investors also took a heart from the October factory output data. HSBC survey showed that Indian manufacturing returned to growth last month, as a strong rise in orders pushed factories to step up production. The headline index designed to measure the overall health of the manufacturing sector, snapping its three consecutive months’ declining streak and in its highest reading since April, climbed from 49.6 in the previous month to 51.3 in November. Meanwhile, shrugging aside fiscal deficit data, which touched 84.4% of full-year target during first eight months of the fiscal, Indian rupee strengthened to sub 62/$ mark in intraday trade,  bolstering sentiment of Indian equity markets. Thus, benchmark indexes, Sensex and Nifty, after witnessing some amount of capitulation during afternoon deals, again picked up momentum in the fag end of the trade and settled above the psychological 20,850 and 6,200 levels respectively, with gains of over half a percent.

On the global front, Asian pacific shares ended mixed, as investors cautiously awaited key US data this week after a decent reading on China manufacturing calmed worries about the health of the world's second-biggest economy.  Additionally, European shares too traded mixed in early deals, after weak manufacturing figures from Spain spooked investors ahead of a busy week on the economic data front. In the week ahead, investors will be focusing on Friday's US nonfarm payrolls report for November, amid expectations that the Federal Reserve will start to scale back its stimulus program at one of its next few meetings.

Closer home, while the secular up-move of the bourses was mainly on account of broad-based buying activities, stocks from Oil & Gas, Public Sector Undertaking (PSU) and Consumer Durable counters were the underperformers. On the flip side, much of the buying interest was witnessed in stocks from HealthCare, Capital Goods and Banking counters. Sharp plunge in ONGC shares, mainly dragged the Oil & Gas pivotal lower. The stocks dropped after Gujarat High Court directed the company to pay dues worth Rs 5,000 crore to Rs 6,000 crore to the state government towards differences in royalty of crude the PSU has extracted since 2008.

However, some good news on inflation front in the encouraging factory output data, suggested Reserve Bank of India (RBI) getting closer to the end of its tightening cycle and fired up banking stocks. Further, Pharma stocks rose after the Union Cabinet decided that the current policy on foreign direct investment (FDI) in brownfield and greenfield projects in the pharmaceutical sector would continue subject to the additional condition that in all cases of FDI in brownfield pharma.

Additionally, Public Sector Oil marketing companies, HPCL, IOC and BPCL, too gained after diesel prices were hiked by 50 paise a litre from December 1. This was an eleventh hike since January 17, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1439: 1032, while 164 scrips remained unchanged. (Provisional)

The BSE Sensex gained 99.80 points or 0.48% to settle at 20891.73.The index touched a high and a low of 20941.00 and 20770.51 respectively. Among the 30-share Sensex, 20 stocks gained, while 10 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.75% and 1.10% respectively. (Provisional)

On the BSE Sectoral front, Healthcare up by 2.06%, Capital Goods up by 1.67%, Bankex up by 1.06%, Metal up by 1.02% and Teck up by 0.65% were the top gainers, while Oil & Gas down by 0.49%, Consumer Durables down by 0.12% and Healthcare down by 0.10% were the only losers in the space. (Provisional)

The top gainers on the Sensex were Jindal Steel up by 4.91%, Sun Pharma up by 4.26%, Wipro up by 2.69%,  L&T up by 2.55% and BHEL up by 2.08%, while, Hindustan Unilever down by 1.76%, ONGC down by 1.51%, Gail India down by 1.27%, Hindalco Industries down by 1.06% and Maruti Suzuki down by 1.04% were the only losers in the index. (Provisional)

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.

India VIX, a gauge for markets short term expectation of volatility gained 9.26% at 23.36  from its previous close of 21.38 on Friday. (Provisional)

The CNX Nifty gained 42.20 points or 0.68% to settle at 6,218.30. The index touched high and low of 6,228.70 and 6,171.15 respectively. Out of the 50 stocks on the Nifty, 35 ended in the green, while 15 ended in the red.

The major gainers of the Nifty were Ranbaxy up 6.20%, Jindal Steel up by 4.88%, Sun Pharmaceuticals up by 4.24%, HCL Tech up by 4.01% and Wipro up by 2.71%. The key losers were Hindustan Unilever down by 1.92%, Power Grid down by 1.52%, Gail down by 1.37%, ONGC down by 1.30% and Maruti Suzuki down by 0.96%. (Provisional)

Most of the European markets were trading in red with, Germany’s DAX down by 0.04%, the United Kingdom’s FTSE 100 down by 0.43% and France’s CAC 40 down by 0.34%.

The Asian markets concluded Monday’s trade mostly in green with stocks in China tumbling after the country signaled an imminent end to its moratorium on initial public offerings. The selling in China was concentrated on the ChiNext Index, which tracks 100 companies listed on the country’s Nasdaq-style ChiNext startup board. The index, which has soared 78% this year as investors bet on China’s push toward a consumption-led economy, was last down 7.1%. Japanese companies remain eager to invest and are planning the biggest year-on-year rise in capital spending since the global financial crisis. Covering nearly 1,400 firms, the latest survey focused on revisions to investment plans since the start of fiscal 2013. Planned capital expenditures total 25.9 trillion yen ($250.4 billion), 13.1% higher than last fiscal year.

HSBC’s monthly survey of China’s manufacturing sector printed at 50.8 for November, up from an initial estimate of 50.4 and almost unchanged from 50.9 the previous month. The results of the manufacturing Purchasing Managers’ Index, showed the fourth straight month of rising production, with the growth at its fastest rate since March. Besides, factory activity in China expanded in November, matching the pace of growth seen a month earlier and topping forecasts. The headline figures came in at 51.4%, according to the China Federation of Logistics and Purchasing, matching the October reading. A figure of more than 50 indicates an expansion in activity.