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The factories stepped up production last month as domestic orders poured in at a faster pace than January, but weak global demand dented export growth, a business survey showed on Friday.
The HSBC Markit manufacturing Purchasing Managers' Index (PMI), rose to 54.2 in February, after falling to 53.2 in January.
The rupee today lost 30 paise to Rs 54.66 against the US dollar in early trade on the Interbank Foreign Exchange due to appreciation of the American currency against other currencies overseas.
Meanwhile in Asia, markets were weak following a pair of lackluster manufacturing surveys from China doing little to help sentiment. Hang Seng and Shanghai Composite have slipped 0.5-1% each.
On Thursday, the government proposed a slew of changes during the Union Budget for 2014. Finance Minister P Chidambaram stuck to the fiscal consolidation roadmap by pegging the Centre's fiscal deficit at 4.8 per cent of GDP, relying largely on an expenditure squeeze and a higher disinvestment kitty. However, December 2012 quarter GDP numbers released later in the day pointed at an uphill task. The economy grew by 4.5 per cent in Q3 pulled down by poor performance of farm, manufacturing and mining sectors.
"We would be positive on IT, Banking and Infrastructure to name a few sectors, the entire stock selection process would be bottom up, with a stock specific approach," said Chandan Taparia, Derivative Analyst, Anand Rathi Financial Services.
Capital goods stocks rose after the finance minister in Union Budget 2013-14 proposed an investment allowance at the rate of 15% to a manufacturing company that invests more than Rs 100 crore in plant and machinery during the period 1 April 2013 to 31 March 2015. BSE capital goods index is up 1.5% at 9,325. Power, metal and consumer durables indices remained in green. BSE auto index is up half a per cent at 10,512 ahead of the auto sales figures announcements.
Jindal Steel has gained 4% at Rs 363. Maruti Suzuki, Tata Power and Larsen & Toubro are up 2-3% each. Among key movers are HDFC, ICICI Bank and Infosys.
On the other hand, Hero MotoCorp is trading lower by around 3% at Rs 1,623, also its lowest level since May 2011, in an otherwise firm market on reports that the workers at company’s Gurgaon unit went on hunger strike from Thursday to demand higher wages.
Dr Reddy's, NTPC and TCS are in red, followed by ITC, BHEL and Bharti Airtel.
BSE mid-cap index has gained 0.5% at 6,328. The small cap index is up marginally at 6,218.
