Market ends near one-month closing highs on robust PMI

The 30-share Sensex ended up 646 points or 2.4% at 27,888 and the 50-share Nifty ended up 195 points or 2.4% at 8,395.

Benchmark share indices ended near one-month closing highs in the week to January 2, 2015, after a private survey showed that India’s manufacturing activity in December 2014 surged to a two-year high.

The 30-share Sensex ended up 646 points or 2.4 per cent at 27,888 and the 50-share Nifty ended up 195 points or 2.4 per cent at 8,395.

The HSBC Purchasing Managers’ Index (PMI) rose to a two-year high of 54.5 points in December 2014, compared with a 21-month high of 53.3 the previous month.

Further, the output of eight crucial industries grew by a five-month high of 6.7 per cent in November, marginally higher than 6.3 per cent in the previous month. The output had risen 3.2 per cent in November last year.

The data showed that the Central government’s fiscal deficit totalled 98.9 per cent of the Budget Estimate (BE) for all of 2014-15 in April-November, Rs 5.25 lakh crore against a full-year’s BE of Rs 5.3 lakh crore. For the corresponding period last year, the deficit was 93.9 per cent of the full-year BE.

Capital goods and consumer durables indices surged over four per cent each to emerge as the top sectoral gainers on the back of encouraging manufacturing activity data.

BHEL was the top Sensex gainer up 9.4 per cent after the state-owned engineering firm won a Rs 3,810 crore contract to set up a 800 Mw supercritical thermal power plant. L&T gained three per cent. Auto shares ended mixed post their December sales numbers.

PSU bank stocks surged following the start of the two-day retreat which includes all top bankers to address issues such as consolidation, bad loans, financial inclusion and capital needs. SBI, Bank of Baroda, Bank of India ended up over two per cent each.

The government raised the excise duties on petrol and diesel by Rs 2 a litre to fund an “ambitious infrastructure development programme” this and the next financial year, including 15,000 km of road construction.

Companies engaged in the road construction sector such as Ashoka Buildcon, IL&FS Transportation, IRB Infrastructure, Sadbhav Engineering and NBCC ended up 6-12 per cent each.

Week ahead
PSU bank stocks will be in focus following the end of the two-day retreat called 'Gyan Sangam', which is likely to unveil a broad framework to implement reforms.

Cement stocks will be in action post the announcement of cement dispatches for December. IT stocks will be in focus as Infosys kicks off the third quarter earnings on Friday, January 9, 2015.