Post Session: Quick Review, 1st June 2015

The Indian markets made a muted start of the new week and month, though benchmarks showed some smart moves but could not hold up to the early gains and after nearing the psychological levels of 28000 (Sensex) and 8500 (Nifty), witnessed some late hour profit taking that took the markets back to the neutral line. Marketmen buoyed by upbeat economic data, announced during the weekend, surged bucking somber global cues. What seemed as extension of rally mood turned out to be a day of consolidation.

The global markets gave a mixed picture, when Asian markets ended mostly in red on concern about the strength of US economic growth after data showed the US economy contracted in the first quarter, though the Chinese markets surged after government reported that manufacturing index hit a six months high. The European markets remained cautious and traded with negative bias, after data showed the region’s manufacturing expanded less than initially forecast, while talks over Greek financial aid continue.

Back home, the markets were encouraged intraday with macro data of manufacturing. Indian Manufacturing sector grew at its fastest pace in four months in May on improved domestic demand, even as input costs remained high and firms adopted a cautious approach on hiring. The report added to the jubilation of GDP growth data that India has overtaken China to become the world’s fastest growing economy by clocking 7.5 percent GDP for the March quarter. However, the gains were mainly on hopes of the Reserve Bank of India cutting its interest rates on Tuesday for the third time this year as inflation eased enough to allow the central bank to provide more help for an economy seen struggling with patchy economic growth. Back on street, broader markets too gave up their early gains and ended marginally in red, while on sectoral front healthcare suffered sharp plunge, along with some profit taking in banking auto and tech stocks. On the same time capital goods, realty, FMCG and oil & gas supported the markets.

As the week was also the start of the fresh month, auto sales numbers for the month of May started coming with Country’s largest carmaker Maruti Suzuki India reporting a 13.8 per cent rise in total sales in May at 1,14,825 units against 1,00,925 units in the same period last year.  Non listed Hyundai Motor India too reported a 1.5 per cent increase in total sales at 52,515 units in May. In the two wheeler segment, Royal Enfield reported a 41.35 per cent jump in total sales in May at 35,354 units. In other scrip specific action Sun Pharmaceuticals, the pharma major slumped around ten percent on posting a consolidated net profit of Rs 888.05 crore for the fourth quarter ended March 31, down 44 per cent YoY, mainly due to Ranbaxy merger impact and price erosion in some products in the US. The company however stated that financials for fourth quarter of 2014-15 and full year are not strictly comparable with the same period last year as they include the impact of the merger of Ranbaxy into Sun Pharma.

The BSE Sensex ended at 27848.99, up by 20.55 points or 0.07% after trading in a range of 27737.58 and 27959.43. There were 16 stocks on gainers side against 13 stocks on losers side on the index.(Provisional)

The broader indices too ended in red; the BSE Mid cap index was down by 0.03%, while Small cap index ended tad lower by 0.01%.(Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.97%, Realty up by 1.61%, FMCG up by 1.04%, Oil & Gas up by 0.69%, Power up by 0.38%, while INFRA down by 0.82%, Bankex down by 0.55%, Auto down by 0.34%, TECK down by 0.33%, Consumer Durables down by 0.14% were the losing indices on BSE.(Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 3.03%, Reliance Industries up by 2.76%, Hindustan Unilever up by 2.31%, Maruti Suzuki up by 2.24% and Cipla up by 1.81%. On the flip side, Sun Pharma Inds. down by 8.99%, Bharti Airtel down by 2.12%, Tata Motors down by 1.96%, ONGC down by 1.79% and HDFC Bank down by 1.42% were the top losers.(Provisional)

Meanwhile, supported by good growth in manufacturing and services, India’s economy grew by 7.3 per cent during 2014-15, the first financial year of the new government, up from 6.9 percent a year ago, showing signs of recovery. As per the provisional estimates of Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, for the Financial Year 2014-15, GDP Growth at basic prices increased 0.6% from 6.6% to 7.2%, while GDP growth at market prices increased from 6.9% to 7.3%. This increase happened despite a decline in agriculture growth from 3.7% in Financial Year 2013-14 to 0.2 % in Financial Year 2014-15.

The manufacturing growth increased substantially from 5.3% in Financial Year 2013-14 to 7.1% in Financial Year 2014-15, while Services growth increased substantially to 10.2% in Financial Year 2014-15 from 9.1% in Financial Year 2013-14.Within services, financial, real estate, and professional services increased from 7.9% in FY 2013-14 to 11.5% in FY 2014-15. The Finance Ministry further added that the capital formation increased from 3% in FY 2013-14 to 4.6% in FY 2014-15. Private Consumption remained broadly constant, while Government consumption decreased during from 8.2% in FY 2013-14 to 6.6 % in FY 2014-15.

India clocked 7.5% growth in January-March quarter, overtaking China which showed a growth of 7.4 percent in same quarter. The economic growth rate measured in terms of GVA for the January-March quarter improved to 6.1 percent as against 5.3 percent a year ago. The manufacturing sector recorded a growth rate of 8.4 percent during the last quarter of the last fiscal, up from 4.4 percent a year ago. Services sector too witnessed marked improved, though agriculture, mining and quarrying sectors were lagging. Output of mining and quarrying sector decelerated to 2.3 percent in the fourth quarter of the last fiscal as compared to a growth of 11.5 percent during the same period in 2013-14, while the agriculture output during the quarter declined by 1.4 percent as compared to a growth of 4.4 percent in the corresponding quarter of the previous fiscal.

The CSO has also revised the figures for three quarters of the last financial year. The GDP for the first quarter was revised to 6.7 percent, from 6.5 percent; for Q2 to 8.4 percent, from 8.2 and for Q3 to 6.6 percent from 7.5 percent. Gross Value Added (GVA), a new concept introduced by CSO to measure economic activity, rose by 7.2 percent in 2014-15, compared to 6.6 percent in the previous fiscal.

The CNX Nifty ended at 8433.40, down by 0.25 points after trading in a range of 8405.40 and 8467.15. There were 30 stocks on advancing side against 19 stocks on declining side on the index.(Provisional)

The top gainers on Nifty were Larsen & Toubro up by 3.09%, Reliance Industries up by 2.88%, Maruti Suzuki up by 2.57%, Hindustan Unilever up by 2.47%, Tata Power up by 2.08%. On the flip side, Sun Pharma Inds down by 9.16%, HCL Tech. down by 3.71%, Lupin down by 2.25%, Bharti Airtel down by 2.11% and Tata Motors down by 1.99% were the top losers.(Provisional)

European Markets after a flat start have mostly turned lower, Germany’s DAX was down by 25.82 points or 0.23% to 11,388.00, UK’s FTSE 100 lost 11.02 points or 0.16% to 6,973.41 and France’s CAC was lower by 3.93 points or 0.08% to 5,003.96.

Asian markets closed mostly in red on Monday, while Shanghai surged after official data indicated a pick-up in Chinese manufacturing activity in May. Singapore’s Straits Times was closed today on account of ‘Vesak Day’ holiday. Growth in China’s giant factory sector edged up to a six-month high in May but export demand shrank again, prompting companies to shed jobs and keeping alive worries about a protracted economic slowdown. In a sign that China’s worst downturn in at least six years is hurting its services companies, too, a similar survey showed growth in that sector slipped to a low not seen in more than five years. The official manufacturing Purchasing Managers’ Index (PMI) edged up to 50.2 from April’s 50.1. Indonesian Inflation rose to a seasonally adjusted 7.15%, from 6.79% in the preceding month. Japanese manufacturing activity expanded in May for the first time in two months as domestic orders and output rose, suggesting the economy may be grinding higher again after faltering in April. The Markit/JMMA final Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 50.9 in May, unchanged from the preliminary reading but higher than a final 49.9 in April.

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Source: Livemint


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