Benchmarks cheer macro-economic data; Nifty regains 6,200 mark

Boisterous benchmarks once again showcased an enthusiastic performance on Monday, by rallying over half a percent in their northbound journey on the back of better-than-expected macro-economic data. Frontline indices managed to extend their rally for third straight day and settled above their crucial 6,200 (Nifty) and 20,850 (Sensex) levels as investors took to hefty across the board buying. Sentiments remained up-beat since morning after Indian economy grew at a higher-than expected 4.8 percent in the September quarter, on the back of improvement in farm and construction sector output. Sentiments also got bolstered on report that foreign investors, continuing their buying spree for the third straight month, invested net Rs 8,000 crore in Indian stocks in November.

Sentiment of the market bolstered after 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. Some support also came in after Reserve Bank of India (RBI) said it is likely to allow up to 74 percent Foreign Direct Investment (FDI) in credit information companies (CICs) having an established track record of running a credit information bureau in a well-regulated environment and well-diversified ownership.

However gains remained capped as global cues remained choppy, European markets made a sluggish opening with CAC, DAX and FTSE trading lower in early deals. Moreover, Asian equity benchmarks exhibited mixed trade, as investors traded cautiously awaiting key US data this week. Though, some support came in from decent reading on China manufacturing. The nation’s factory activity maintained steady growth momentum in November, boosted by resilient new orders, though the pace of expansion eased slightly from October.

Back home, some support also came in from currency front where Indian rupee rose to a near two-week high against the dollar, as worries about the economy eased after a private survey showed the country’s manufacturing sector returned to growth last month. Rally in shares of oil marketing companies too aided the sentiments. BPCL, HPCL and IOC all edged higher with the diesel price hike. The government on November 30 hiked diesel prices by 50 paise per litre, while the petrol prices were kept unchanged.

The NSE’s 50-share broadly followed index Nifty rose by over forty points to end above its psychological 6,200 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred points to end near the psychological 20,900 mark.

Broader markets too traded with traction and ended the session with a gain of around a percentage point. The market breadth remained in favour of advances, as there were 1,464 shares on the gaining side against 1,007 shares on the losing side, while 164 shares remained unchanged.

Finally, the BSE Sensex surged by 106.08 points or 0.51%, to settle at 20898.01, while the CNX Nifty gained 41.75 points or 0.68% to settle at 6,217.85.

The BSE Sensex touched a high and a low of 20941.00 and 20770.51, respectively. The BSE Mid cap index was up by 0.81%, while the Small cap index gained 1.09%.

The top gainers on the Sensex were Sun Pharma up 4.09%, Jindal Steel up 4.01%, Wipro up 2.24%, L&T up 2.22%, and BHEL up 2.05%, on the flip side Hindustan Unilever down 1.88%, ONGC down 1.54%, Gail India down 1.42%, Maruti Suzuki down 0.96%, and Hindalco Inds down 0.69%, were the top losers on the index.

On the BSE Sectoral front, Healthcare up by 2.00%, Capital Goods up by 1.61%, Bankex up by 1.16%, Metal up by 1.00%, and Teck up by 0.64%, were the top gainers, while, Oil & Gas down by 0.38%, was the only loser on the sectoral front.

Meanwhile, in order to boost the ailing Indian aviation sector and to make it more competitive on global front, the Competition Commission of India (CCI) has demanded easing norms for airlines flying abroad, saying that the norm is acting as an impediment for the growth of Indian aviation sector.

The CCI has said that the minimum eligibility criteria for Indian carriers to launch international services should be removed and added that the present aviation five year/20 aircraft rule has become a major hurdle for the sector, under which Indian carrier needs to have a fleet of 20 aircraft to launch international operations and to complete five years of flying in the domestic space in order to launch international airlines services. On the contrary, this restriction does not apply to foreign airlines.

Further, CCI is of the view that once this rule is relaxed, the contest ability of the domestic aviation sector is likely to increase and will make the Indian aviation sector more competitive on global level.  On the other hand, the abolition of minimum eligibility for international flying is first on the agenda of civil aviation ministry. However, the policy change will require the Cabinet’s approval. The abolition of international flying norm, creation of an aviation force and making Air Navigation Services a separate company are the three proposals to be cleared by the union cabinet before the Lok Sabha general elections scheduled to be held in 2014.

The CNX Nifty touched a high and low of 6,228.70 and 6,171.15 respectively.

The top gainers on the Nifty were Ranbaxy Laboratories up by 6.20%, Jindal Steel & Power up by 4.88%, Sun Pharmaceuticals Industries up by 4.24%, HCL Technologies up by 4.01%, and Wipro up by 2.71%, On the other hand, Hindustan Unilever down by 1.92%, Power Grid Corporation of India down by 1.52%, GAIL (India) down by 1.37%, ONGC down by 1.30%, and Maruti Suzuki India down by 0.96%, were the top losers.

The European markets were trading in red, France's CAC 40 was down by 0.42%, Germany's DAX was down by 0.13%, and United Kingdom's FTSE 100 was down by 0.65%.

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.