The benchmark indices were trading firm in early afternoon trade. At 12:20 IST, the barometer index, the S&P BSE Sensex, surged 321.92 points or 0.54% at 59,628.85. The Nifty 50 index soared 114.90 points or 0.65% at 17,786.55.
In the broader market, the S&P BSE Mid-Cap index rose 0.94% while the S&P BSE Small-Cap index gained 0.66%.
The market breadth was strong. On the BSE, 2,016 shares rose and 1,155 shares fell. A total of 180 shares were unchanged.
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.
Economy:
The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) stood at 55.9 in October 2021, rising from 53.7 in September 2021. The latest figure pointed to the strongest improvement in overall operating conditions since February 2021. The figure was in expansion territory for the fourth month in a row.
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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."
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 1.60% to 17.7050. The Nifty 25 November 2021 futures were trading at 17,838.85, at a premium of 52.3 points as compared with the spot at 17,786.55.
The Nifty option chain for 25 November 2021 expiry showed maximum Call OI of 21.4 lakh contracts at the 19,000 strike price. Maximum Put OI of 20.9 lakh contracts was seen at 17,500 strike price.
Buzzing Index:
The Nifty Metal index advanced 2.74% to 5,715.90. The index rose 3.09% in two trading sessions.
Steel Authority of India (SAIL) (up 9.95%), National Aluminium Co. (up 4.75%), Hindalco Industries (up 3.52%), Tata Steel (up 3.39%) and Jindal Steel & Power (JSPL) (up 3.21%) were the major gainers in the Metal segment.
Steel Authority of India (SAIL) jumped 9.95% after the company's consolidated net profit rose 11.33% to Rs 4,338.75 crore on 29.96% rise in net sales to Rs 26,828.01 crore in Q2 September 2021 over Q1 June 2021. The company said it reported best ever quarterly EBITDA, profit before tax (PBT) and profit after tax (PAT). SAIL's net profit surged 893.94% and net sales rose 58.51% in Q2 September 2021 over Q2 September 2020. During the quarter, the company's crude steel production stood at 4.468 million tonnes and saleable steel sales stood at 4.280 million tonnes.
Stocks in Spotlight:
Eicher Motors gained 1.74%. Eicher Motors said that its subsidiary VE Commercial Vehicles (VECV) sold 5,805 units of commercial vehicles in October 2021, registering a growth of 38.2% on a year-on-year (Y-o-Y) basis. VECV, the unlisted subsidiary of Eicher Motors, had sold 4,200 units of commercial vehicles in October 2020. On a sequential basis, the commercial vehicles sales are lower by 4.3% as compared with 6,070 units sold in September 2021. While total domestic sales of Eicher trucks & buses increased by 27.5% to 4,863 units, total exports rose 162.2% to 826 units in October 2021 over October 2020. Sales of Volvo trucks & buses, stood at 116 units, 65.7% higher than 70 units sold in October 2020.
Lux Industries rallied 4.49% after the company reported 50% rise in consolidated net profit to Rs 100.04 crore on a 25% increase in income from operations to Rs 630.86 crore in Q2 FY22 over Q2 FY21. EBITDA improved by 44% to Rs 141 crore in Q2 FY22 from Rs 97.67 crore in Q2 FY21. EBITDA margin in the second quarter was 22.35% as compared with 19.36% reported in the same period last year.
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