The main indices continued to trade near day's high in mid-morning trade. The sentiment got a boost after India's Services PMI in January rose at quickest rates in seven years. The Nifty traded below 12,050 level. Buying was wide spread with metal and realty stocks at the fore.
At 11:21 IST, the S&P BSE Sensex, was up 153.66 points or 0.38% at 40,943.04. The Nifty 50 index was up 46.2 points or 0.39% at 12,025.85.
The S&P BSE Mid-Cap index was up 1.47% while the S&P BSE Small-Cap index was up 0.79%. Both these indices outperformed the Sensex.
The market breadth was titled in the favour of buyers. On the BSE, 1227 shares rose and 775 shares fell. A total of 137 shares were unchanged. In Nifty 50 index, 33 stocks advanced while 17 stocks declined.
Economy:
The IHS Markit India Services Business Activity jumped to 55.5 in January from 53.3 in December, signalling the strongest upturn in output for seven years. The rebound largely stemmed from favourable market conditions and better underlying demand. A reading below 50 indicates contraction in activity, while a number above it signals expansion.
"The Indian service sector sprung to life at the start of 2020, defying expectations of fragility and building on to the momentum gained at the end of 2019. Strong domestic demand led to expansions in new business and output not seen for seven years. With business revenues rising, service providers continued to increase capacity to meet further strong growth in sales. This is good news for jobseekers, particularly when we consider the results from the manufacturing industry which showed the steepest upturn in employment since August 2012. One worrying development, however, was the trend for inflation. The service survey pointed to the sharpest increase in input prices in just under seven years, with companies mostly absorbing the added cost burdens themselves instead of fully passing these on to their customers. This may translate into quicker increases in selling prices in months to come, which may curb sales. Firms could also choose to restrict hiring in order to protect profit margins," said Pollyanna de Lima, Principal Economist at IHS Markit.
Stocks in Spotlight:
Hind Rectifiers was up 2.24% after the company announced that it secured orders of Rs 54.62 crore in January 2020. The company is having a pending order book of Rs 334.07 crore as on 31 January 2020.
SRF rose 2.48% to Rs 3838 after the company said its board approved the project proposal for setting up a range of dedicated plants to produce specialty chemicals at an estimated cost of Rs 238 crore. The project proposes a capacity addition of 2150 MTPA (million tonnes per annum) within a period of 10 months, i.e., by the end of November 2020. The project is being financed by a mix of debt and internal accruals, SRF announced after market hours on Tuesday.
Sun Pharmaceutical Industries fell 0.02%. Sun Pharmaceutical Industries said that one of its wholly owned subsidiaries has launched ABSORICA LD (isotretinoin) capsules in US for the management of severe recalcitrant nodular acne in patients 12 years of age and older. ABSORICA LD is the only isotretinoin formulation to feature Sun Pharma's micronization technology, which utilizes micronized particles to optimize absorption at a 20% lower dose. ABSORICA LD can be taken with or without food.
Central Bank of India was up 0.85%. Central Bank of India said that the capital raising committee of the board of directors of the bank approved the proposal for raising capital funds upto Rs. 500 crore by issuance and allotment of non-convertible redeemable unsecured Basel III compliant Tier 2 bonds in the nature of promissory notes.
Cadila Healthcare advanced 1.67%. Cadila Healthcare informed that the USFDA inspected the manufacturing facility of Alidac Pharmaceuticals , the company's wholly-owned subsidiary, without any observation (483). The site manufactures oncology injectables for the regulated markets.
Global Markets:
Overseas, Asian markets were trading higher on Wednesday as investors took cue from China's effort to stimulate its economy and mitigate the coronavirus outbreak concerns.
In US, markets finished sharply higher on Tuesday as investors weighed stimulus efforts by the People's Bank of China and actions by Beijing to combat the economic impact of a deadly Asian virus.
The coronavirus has infected more than 20,000 people in China and claimed 465 lives, according to China's National Health Commission.
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