Markets maintain momentum; Sensex gains nearly 300 points

M&M, Maruti Suzuki, Hindalco and ONGC are leading the gains this morning.

The markets have retained the early-morning gains thanks to strength on the auto, metal and oil counters.

At 10:30am, the Sensex was quoting at 27,288, higher by 277 points or 1% and the Nifty was at 8,261, up 79 points. The broader markets are also showing strength, with the midcap and smallcap indices gaining around a percent each at 10,482 and 11,077 respectively.

The markets had a strong opening this morning, with the Nifty opening above the psychologically crucial 8200 mark, and have managed to hold on to the gains. One may point out that from its peak level of 30,024.74 touched on March 4 2015, the S&P BSE Sensex has dropped nearly 3,000 points, or 10%. In the last week alone, the BSE Sensex had dropped 426 points or 1.5% to end the past week at 27,011 and the Nifty had declined 123 points, or 1.4% to close below the 200-day moving average (DMA) at 8,181.

ECONOMY

The Indian manufacturing economy recorded a growth slowdown during April. Total new orders increased at a weaker pace and, as a consequence, companies reduced staffing levels and raised output to a lesser degree.

At 51.3 in April, down from 52.1 in March, the headline HSBC India Purchasing  Managers’  Index   (PMI)  –  a  seasonally adjusted  indicator  designed  to  give  an  accurate  overview  of operating conditions in the manufacturing economy – pointed to a weaker improvement in operating conditions across the sector. Nonetheless, the headline index recorded above the crucial 50.0 threshold for the eighteenth successive month.

SECTORS AND STOCKS

All the sectoral indices are trading in the green this morning, with the auto, oil and gas, and metal indices seeing the most action.

The auto sector is in the limelight in early trades post the release of auto sale numbers. M&M has jumped by 3.3% at Rs 1,183, Maruti Suzuki has gained 1.4% at Rs 3,785 and Hero Moto Corp has added 1.4% at Rs 2,364.

In the metal space, Hindalco, NMDC, Vedanta and Jindal Steel have added between 1% and 2% each.

In the oil space, Oil India, ONGC and Cairn India have added 1-4% each. And inderx heavyweight RIL has added 1% art Rs 871.

The Aditya Birla group stocks are in the focus after the Kumar Mangalam Birla-controlled group on Sunday announced a plan to merge its Aditya Birla Nuvo Ltd (ABNL)-operated fashion retailing business with Pantaloons Fashion & Retail. This will create India’s largest branded apparel player, valued at Rs 12,000 crore. Aditya Birla Nuvo has strengthened by 6.7% at Rs 1677 and Pantaloons Fashion & Retail has hit the upper circuit of 20% at Rs 136.

The market breadth is strong. Out of 2,093 stocks traded on the BSE, there are 1,570 advancing stocks as against 462 declines.