Markets firm up as Services PMI rises to 21-month high

Markets firmed up in late noon trades after a private survey showed that India's services sector surged to a 21-month high in March 2016.

At 12:10pm, the S&P BSE Sensex was up 69 points at 24,952 and the Nifty50 was up 26 points at 7,629.

In the broader market, the BSE Midcap and Smallcap indices were up 0.1%-0.6% each. Market breadth was strong with 1375 gainers and 763 losers on the BSE.

Growth in India's services firms rose to a 21 month high of 54.3 in March after a sudden contraction of 51.4 in February, as new businesses increased markedly, a survey showed on Wednesday.

The seasonally adjusted Nikkei/Markit Services Purchasing Managers' Index (PMI) had been experienced a straight seventh month above the 50-level that separates growth from contraction till January.

Foreign institutional investors turned net sellers in equities with sales of Rs 801 crore on Tuesday, as per provisional stock exchange data.

The Indian rupee came off its early highs and was trading marginally higher against the US dollar at 66.44 compared to its previous close of 66.46. Earlier, the rupee had firmed up after exporters and banks pressed sales in the US currency.

SECTORS & STOCKS

BSE Metal index was the top gainer up over 2% followed by Auto, Capital Goods, Consumer Durables among others. Bankex, Oil and Gas indices were trading with marginal losses.

Metal shares were trading higher on reports that the government has issued notices to three countries including China with a view to investigate dumping of steel products into India. Hindalco, JSW Steel, Jindal Steel and SAIL were up 1%-4% each.
 
Tata Steel was up 3.5% after Sanjeev Gupta which had envinced interest in acquiring Tata Steel’s British assets, has decided to meet Britain’s business secretary to discuss his plan to turn around the ailing business.

Auto shares continue to remain upbeat post their March sales numbers and new launches by select companies. Maruti Suzuki, Hero MotoCorp and Bajaj Auto were up 0.4%-1.2% each.

M&M was up over 1%. The auto major launched a new range of tractors in the 30-45 HP category under brand name Mahindra YUVO on Tuesday.  On Monday, it launched the Nuvosport, a multi-seater UV which is a redesigned Quanto. The vehicle is priced at Rs 7.35 lakh (ex-showroom, Thane).

Cipla plans to deploy more funds for research and development in respiratory, dermatology, neurology and oncology segments and hopes for the first commercial launch in the US around 2020. However, the stock is trading nearly 1% lower.

TCS was up nearly 1%. The IT major has set up an open innovation centre in Nashik to solve social problems in local communities. The stock is trading with modest gains.

Among others, Gallantt Ispat has rallied 8% to Rs 587, also its lifetime high on the BSE, after the company said that its board has approved the capital expenditure (capex) plan of Rs 511 crore.