Sensex up nearly 100 points; Axis Bank gains 3%

Benchmark indices are trading firm during the late noon trades as gains in financials and healthcare stocks offset losses in metal and power shares.

 

Sustained buying by the investors aided by slew of economic reforms recently announced by the government along with decline in global crude oil prices have improved the sentiments of the market participants.

 

At 2.30 PM, the Sensex is up 86 points at 27,947 and the Nifty has gained 26 points to trade at 8,350.

 

On the macro economic front, the disappointing services PMI data dampened the investor sentiment. Growth in India's dominant service industry stalled last month as new orders came in at a weaker pace, adding to pressure on the government to drive through economic reforms, a business survey showed on Wednesday.

 

The HSBC Purchasing Managers' Index (PMI), compiled by Markit, fell to 50 in October from September's 51.6, the lowest in six months and right on the break-even point between growth and contraction.

 

However, foreign portfolio investors bought shares worth a net Rs 1413.34 crore during the previous trading session on Monday as per provisional data released by the stock exchanges.

 

Meanwhile, Finance Minister Arun Jaitley said that the government is open to privatisation of certain loss-making public sector companies.

 

"Certainly I would be interested to look at some PSUs (which) could do much better in private hands," Jaitley said during an interaction at the World Economic Forum in New Delhi, referring to public sector undertakings.

 

Global Markets:

 

Japanese stocks rose to new seven-year highs on Wednesday as heavyweight Fast Retailing Co surged on strong monthly sales, while exporters got a boost as the dollar rose against the yen after U.S. mid-term election results have showed Republicans made major gains.

 

Fast Retailing, which soared 2.3%, contributed hefty 37.50 points to the Nikkei benchmark after it said same-store sales at its Uniqlo clothing outlets in Japan rose 10.5% in October from a year earlier.

 

The Nikkei benchmark, which was trading in negative territory earlier in the day, ended 0.4 percent higher to 16.937.32, the highest closing level since October 2007.

 

Growth in China's services sector weakened further in October as new business cooled, a private survey showed on Wednesday, reinforcing signs of a gradual economic slowdown that could prod the government to unveil fresh stimulus measures.

 

The services purchasing managers' index (PMI) compiled by HSBC/Markit pulled back to 52.9 in October - the weakest reading since July - from 53.5 in September.

 

European stocks rose on Wednesday, reversing most of the previous session's losses, as a raft of postive results from companies. FTSE 100, DAX and CAC 40 indices gained between 0.5-1%.

 

Sectors & Stocks:

 

On the sectoral front, BSE Bankex is the top gainer up over 1.3% followed by Healthcare, Realty and FMCG indices up between 0.5-1%. However, BSE Metal index is the top loser down 3% followed by Power and Oil & Gas indices down between 0.5-1%.

 

Renewed buying is visible in the healthcare space. Dr Reddy’s Lab and Sun Pharma have gained between 1.5-2.5%.

 

Morgan Stanley upgrades Dr. Reddy's stock to "overweight" from "equal-weight"; raises price target to 3,875 rupees from 3,049 rupees.

 

Banks which are a proxy to the economy have witnessed buying interest from investors after global rating agency Standard & Poor’s (S&P) upgraded  India’s credit outlook to ‘stable’ from ‘negative’.

 

Further, moderation in consumer price inflation during September 2014 also fuelled rally in bank shares. HDFC twins, SBI, Axis Bank and ICICI Bank have gained between 0.2-2.5%. 

 

Infrastructure scrips continue to attract investor interest as the government relaxed foreign direct investment (FDI) rules in the construction sector by reducing minimum built up area as well as capital requirement and easing exit norms. L&T and BHEL have climbed between 0.5-0.8%.

 

On the flip side, Shares of metal companies are trading lower up to 4% on the NSE in today’s trade. The services purchasing managers' index (PMI) compiled by HSBC/Markit pulled back to 52.9 in October, the weakest reading since July, from 53.5 in September.

 

China is the world's largest consumer of steel, copper and aluminum.

 

Sesa Sterlite, NALCO, SAIL, Tata Steel, Jindal Steel, Hindalco, Jindal Steel, JSW Steel and Coal India are down between 1-4% on the National Stock Exchange (NSE).

 

Power stocks are trading dim in today’s trade. NTPC and Tata Power have lost 1.5% each.

 

Shares of most of the frontline automobiles companies continue to trade in red after reporting drop in vehicle sales during the month of October. M&M, Maruti, Bajaj Auto, Hero MotoCorp and Tata Motors down 0.1-1% .

 

Brent crude oil fell more than three per cent to its lowest level in more than four years at near $82 a barrel on Tuesday, after top oil exporter, Saudi Arabia cut sales prices to the United States. RIL and ONGC lost nearly 1% each.

 

Telecom major Bharti Airtel is down over 3% in the late noon trades on profit booking.

 

Broader markets too retreated from their intra-day highs but continued to outperform the BSE benchmark index. The small and midcap indices are up between 0.5-0.7%.

 

The market breadth is positive owing to the gains in broader markets. 1,652 stocks advanced while 1,258 stocks declined on the BSE