Nifty above 8,250; HDFC Group shares lead

Benchmark share indices were up over 1% each in late morning trade led by gains in HDFC Group shares and select index heavyweights.

At 11:35AM, the 30-share Sensex was up 324 points or 1.2% while the 50-share Nifty was up 101 points or 1.2% at 8,282.

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 & STOCKS

BSE Realty sector was the top sectoral gainer up 2.3% followed by Consumer Durables, Healthcare, Oil and Gas indices among others.

Gains were led by HDFC Group shares with HDFC and HDFC Bank up 1.5-1.9%. Among other banks, ICICI Bank and SBI were up 0.9-1.4% each.

FMCG shares witnessed renewed buying interest at lower levels. ITC and HUL were up 0.7-1.6% each.

IT shares were also trading firm after the recent correction post lower-than-expected first quarter GDP in the US. Infosys and TCS were up 0.4-1.4% each.

Oil explorers such ONGC and Oil and India were up over 3.5% each on talk that eports that the government has decided to scrap the fuel subsidy-sharing mechanism. Reliance Industries was up 1.4%.

Mahindra & Mahindra was up 3.4% after the company reported eported strong growth in tractor exports during April 2015 compared with the same month last year. Tractors exports grew 20% to 1,005 units in April 2015 compared with 836 units in April 2014, the company said in a release.

Pharma shares which had corrected in the previous week also witnessed value buying at lower levels. Sun Pharma, Dr Reddy's Labs and Cipla were up 1-3.4% each.

Among other shares, Adani Ports and Special Economic Zone (SEZ) has rallied 6% to Rs 335 after reporting a strong 49% year on year (yoy) increased in its consolidated operation profit to Rs 1,247 crore in March 2015 quarter. The company had EBIDTA of Rs 836 crore in corresponding quarter last year.

In the broader market, the BSE Mid-cap index was up 0.8% and the Small-cap index was up 1.6%.

Market breadth was strong with 1,692 gainers and 570 losers on the BSE.