Strong market breadth

A range bound movement was witnessed as key benchmark indices retained positive zone in mid-morning trade. At 11:15 IST, the barometer index, the S&P BSE Sensex, was up 51.50 points or 0.21% at 25,095.93. The 50-unit Nifty 50 index was currently up 17.50 points or 0.23% at 7,627.95. The Sensex retained the psychologically important 25,000 mark. Earlier, the barometer index had fallen below that level when it opened with a downward gap.

The market breadth indicating the overall health of the market was strong. On BSE, 1,289 shares rose and 834 shares fell. A total of 166 shares were unchanged. The BSE Mid-Cap index was currently up 0.52%. The BSE Small-Cap index was currently up 0.34%. Both these indices outperformed the Sensex.

Among macro economic data, India's Index of Industrial Production (IIP) growth surged to 60-months high of 9.8% in October 2015 over a year ago compared with the revised growth of 3.8% in September 2015. An extremely farvourable base effect with IIP declining 2.7% in October 2014 has mainly fuel the IIP growth for October 2015. Also, the festive season shifting to November this year compared with October in last year, aided IIP growth in October 2015 driven by pre-festive season surge in production. The data was announced by the government after market hours on Friday, 11 December 2015.

Most pharmaceutical stocks edged higher on weak rupee. Sun Pharmaceutical Industries (up 1.44%), Aurobindo Pharma (up 1.33%), Piramal Enterprises (up 1.32%), Glenmark Pharmaceuticals (up 0.93%), Divi's Laboratories (up 0.83%), Dr Reddy's Laboratories (up 0.79%), Cadila Healthcare (up 0.69%), Lupin (up 0.30%), IPCA Laboratories (up 0.19%) and Cipla (up 0.09%) edged higher.

GlaxoSmithKline Pharmaceuticals (down 0.1%), Wockhardt (down 0.2%) and Strides Shasun (down 1.07%) edged lower.

A weak rupee will boost sales of pharma companies in rupee terms as pharma firms derive substantial revenue from exports.

In the foreign exchange market, the partially convertible rupee was currently hovering at 66.985, compared with its close of 66.89 during the previous trading session.

IT stocks rose as rupee weakened against the dollar. MphasiS (up 1.98%), Oracle Financial Services Software (up 1.88%), Infosys (up 1.23%), Tech Mahindra (up 1.13%), MindTree (up 0.97%), HCL Technologies (up 0.71%), Hexaware Technologies (up 0.55%) and CMC (up 0.03%), edged higher. Wipro (down 0.49%) and Persistent Systems (down 1.24%), edged lower.

A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

TCS dropped 0.9% after the company said in its update regarding its operations in Chennai that recent severe flooding in the city led to major disruptions in its ability to function. The normal business functioning of company's facilities had to be halted in the city all week since 1 December 2015 due to flooding. This is expected to have a material impact on the company's revenue in the seasonally weak Q3 December 2015, it added. The company made the announcement after market hours on Friday, 11 December 2015. Chennai is one of the company's largest delivery function with over 65,000 employees. The majority of facilities in Chennai opened for normal business functioning on 7 December 2015, but attendance rates were lower than normal as employees were still recovering from the flood's aftermath.

In overseas stock markets, Asian equities edged lower as investors remain focused on a decision from the US Federal Reserve after a monetary policy review this week. The Fed is widely expected to raise the federal funds rate by 25 basis points after the conclusion of a two-day monetary policy meeting on 15-16 December 2015. US stocks tumbled during the previous trading session on Friday, 11 December 2015, as falling prices in crude oil and worries about junk-bond markets rattled Wall Street. News during the previous day on 10 December 2015 that high-yield mutual fund Third Avenue Focused Credit Fund is blocking investors from withdrawing their money, added to market jitters.

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