Markets continue trade in fine fettle in late afternoon session

Indian equity markets continued show positive trend in late afternoon session. Traders were seen piling up positions in Telecom, Power and Metal sector, while selling was witnessed in Oil & Gas and IT sector stocks. The markets took support after Indian manufacturing activity signalled growth in the month of August 2020, led by an improvement in customer demand as client businesses reopened, after lockdown restrictions eased amid the coronavirus disease 2019 (COVID-19). Traders shrugged off India's economy suffered its worst slump on record in April-June, with the gross domestic product (GDP) contracting by 23.9% as the coronavirus-related lockdowns weighed on the already-declining consumer demand and investment. Sector wise, steel sector remained in focus, as steel production having 17.92 percent weight declined by 16.4 percent in July, 2020 over July, 2019, while its cumulative index fell by 42.0 percent during April to July, 2020-21 over the corresponding period of previous year.

On the global front, Asian markets are trading mostly in green after strong readings on China’s vast manufacturing sector offset the weak lead from a softer Wall Street session. However, European markets were trading mostly in red despite latest data from China showed manufacturing activity in the world’s second-largest economy expanded at its fastest rate in nearly 10 years.

The BSE Sensex is currently trading at 38974.02, up by 345.73 points or 0.90% after trading in a range of 38542.11 and 39226.82. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.51%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were Telecom up by 4.08%, Power up by 2.06%, Metal up by 1.98%, Utilities up by 1.12% and Capital Goods was up by 1.05%, while Oil & Gas down by 0.76% and IT was down by 0.38% were the only losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 6.54%, Bajaj Finance up by 4.25%, Asian Paints up by 3.48%, NTPC up by 2.95% and Bajaj Finserv up by 2.79%. On the flip side, ONGC down by 3.78%, Axis Bank down by 2.55%, Indusind Bank down by 1.23%, ICICI Bank down by 1.04% and Infosys down by 0.94% were the top losers.

Meanwhile, Indian manufacturing activity signalled growth in the month of August 2020, led by an improvement in customer demand as client businesses reopened, after lockdown restrictions eased amid the coronavirus disease 2019 (COVID-19). As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - jumped to 52.0 in August as against 46.0 in July.

The report further noted that output and new orders expanded at the fastest paces since February. Despite an expansion in new orders, job shedding continued in the Indian manufacturing sector. The relocation of employees following COVID-19 was often linked to the reduction in staffing numbers. The pace of contraction in workforce numbers softened from that seen in July but remained strong overall.

On the price front, higher raw material costs due to supplier shortages and transportation delays stemming from the COVID-19 pandemic, resulted in rising input prices during August. Cost burdens rose for the first time since March, with the rate of input price inflation at its highest since November 2018. Despite rising cost burdens, Indian manufacturers reported lower factory gate charges due to competitive pressures and efforts to boost sales. However, the rate of decline eased to only a fractional pace that was the weakest in the current sequence of decrease.

The CNX Nifty is currently trading at 11485.75, up by 98.25 points or 0.86% after trading in a range of 11366.90 and 11553.55. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 6.73%, JSW Steel up by 4.99%, Bajaj Finance up by 4.48%, Hindalco up by 4.29% and Asian Paints up by 3.82%. On the flip side, ONGC down by 3.72%, Bharti Infratel down by 2.92%, Axis Bank down by 2.27%, Indian Oil down by 1.92% and Coal India down by 1.60% were the top losers.

Asian markets are trading mostly in green, Taiwan Weighted strengthened 111.83 points or 0.89% to 12,703.28, Jakarta Composite soared 72.19 points or 1.38% to 5,310.68, KOSPI rose 23.38 points or 1.01% to 2,349.55, Hang Seng increased 7.80 points or 0.03% to 25,184.85, Straits Times advanced 5.06 points or 0.2% to 2,537.57 and Shanghai Composite gained 4.12 points or 0.14% to 2,935.87. On the flip side, Nikkei 225 was down by1.69 points or 0.01% to 23,138.07.

European markets were trading mostly in red; UK’s FTSE 100 decreased 55.49 points or 0.93% to 5,908.08, France’s CAC decreased 0.10 points or 0% to 4,947.12. On the flip side, Germany’s DAX was up by 76.14 points or 0.59% to 13,021.52.