The equity benchmarks further pared gains in mid morning trade. The Nifty was trading below the 17,750 mark. Auto stocks advanced for the second consecutive session.
At 11:24 IST, the barometer index, the S&P BSE Sensex, was up 193.5 points or 0.33% to 59,500.43. The Nifty 50 index added 67.30 points or 0.38% to 17,738.95.
The key equity indices witnessed bargain buying after declining by over 3% in the past three sessions. The recent selling was triggered by relentless selling by FIIs, rising inflation and slowdown in global growth momentum.
In the broader market, the S&P BSE Mid-Cap index gained 0.68% while the S&P BSE Small-Cap index rose 0.53%.
The market breadth remained strong. On the BSE, 1985 shares rose and 1096 shares fell. A total of 179 shares were unchanged.
Economy:
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The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) stood at 55.9 in October, rising from 53.7 in September. The latest figure pointed to the strongest improvement in overall operating conditions since February. The figure was in expansion territory for the fourth month in a row.
Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit, said: Manufacturing sector growth in India continued to gather momentum, with October data showing notably quicker expansions in new orders, production and input purchasing.
With companies gearing up for further improvements in demand by building up their stocks, it looks like manufacturing activity will continue to expand throughout the third quarter of fiscal year 2021/22 should the pandemic remain under control. Upbeat business confidence and projects in the pipeline should also support production in the coming months.
Of concern, input cost inflation accelerated substantially in October to a near eight-year high as strong global demand for scarce raw materials continued to push up prices for these items. Some manufacturers hiked their fees in response, but for now the overall rate of charge inflation was moderate.
Despite the overall improvement in operating conditions, jobs failed to increase. This was often linked to sufficient capacity to deal with current workloads and government norms surrounding shift work."
Buzzing Index:
The Nifty Auto index added 0.10% to 11,308.70. The index has gained 0.4% in two sessions.
TVS Motor Company (up 1.18%), Maruti Suzuki (up 1.01%), Eicher Motors (up 0.89%), Bharat Forge (up 0.78%) and Hero MotoCorp (up 0.10%) advanced.
Mahindra & Mahindra (down 1.10%), Tata Motors (down 0.99%) and Ashok Leyland (down 0.28%) declined.
Escorts was 3.33% lower at Rs 1,518.05. The company's total tractor sales declined by 1.1% YoY to 13,514 units in October 2021 from 13,664 units sold in October 2020. On a sequential basis, Escorts recorded a sales growth of 53.3% in October 2021 from 8,816 units sold in September 2021.
Bajaj Auto shed 0.24% to Rs 3,701.40. Bajaj Auto's total auto sales in October 2021 stood at 4,39,615 units, down by 14% from 5,12,038 units sold in October 2020. On a sequential basis, the total auto sales are higher by 9.3% as compared with 402,021 units sold in September 2021.
Global Markets:
Asian stocks were trading higher on Monday. Investors reacted to economic data that showed a mixed picture of Chinese manufacturing activity in October.
China's official manufacturing Purchasing Managers' Index for October came in at 49.2 over the weekend, below the 50 level separating expansion from contraction. It represented the second straight month of shrinking manufacturing activity in the country, following September's official manufacturing PMI reading of 49.6.
However, a private survey released Monday showed Chinese manufacturing activity growth in October expanding with the Caixin/Markit manufacturing PMI coming in at 50.6.
In the US, Wall Street capped a choppy day of trading Friday with modest gains for stocks, nudging the major indexes to more all-time highs.
Investors will be monitoring the Federal Reserve's two-day meeting Tuesday and Wednesday. The central bank is widely expected to announce that it will begin to unwind its $120 billion in monthly bond purchases and end the program entirely by the middle of next year.
Meanwhile, leaders of the world's 20 biggest economies (G-20) endorsed on Saturday a global minimum tax aimed at stopping big business from hiding profits in tax havens, and also agreed to get more Covid vaccines to poorer nations. G-20 leaders broadly backed calls to extend debt relief for impoverished countries and pledged to vaccinate 70% of the world's population against Covid-19 by mid-2022.
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