Sensex ends in green; shrugs off weak manufacturing data

Equity benchmarks ended marginally higher Monday even as macro indicators showed that the economy is yet to turn.

The Sensex rose 29 points to close at 18865 and the Nifty gained 22 points to close at 5704. Mid and small cap shares were the star performers of the day. Stocks from the realty and capital goods sectors did well, while auto, metal and FMCG sectors struggled.

DLF, Cairn India, Reliance Infra, Jaiprakash Associates and Dr Reddys Labs were top gainers on the Nifty. Sesa Goa, Jindal Steel, Bajaj Auto, TCS and NMDC were top losers.

The HSBC manufacturing Purchasing Managers' Index (PMI), an indicator of business activity in Indian factories, fell to 52.0 in March, after a surge to 54.2 in February. This was the biggest month-on-month drop since November 2011.

Also, government data showed that core industries of the economy declined 2.5 percent in February compared to a 7.7 percent increased same period last year

The weak numbers came in even as Finance Minister P Chidambaram said at a press conference in Tokyo that growth was expected to accelerate in the current fiscal, driven by fast-tracking of infra projects.

Shares of Repco Home Finance had a disappointing debut, closing at Rs 164, down 4.65 percent over the issue price of Rs 172.

After a stable start, the Nifty gave up its early gains and flattened out at around 5690. The Sensex was up 26.98 points at 18862.75, while the Nifty added 16.35 points at 5698.90.

The midcap index too cooled off from morning gains but stocks like Core Education, Indiabulls Power and Delta Corp continued to rally.

Sterlite Industries, Jindal Steel, Tata Motors, Wipro and ONGC were the biggest losers of the day.

Gainers in BSE realty index -- HDIL rises 6.7 percent, Orbit Corp up 6.5 percent, DLF gains 6 percent, DB Realty rises 5 percent, Unitech gains 4 percent.

Auto stocks were feeling the pressure of weak March sales numbers. Tough times set to continue with weakness seen across segments. Estimates indicated a 10 percent drop in Maruti's volumes while in the two-wheeler segment, TVS Motor's year-on-year sales have dipped over 8 percent, flat performance on a monthly basis. Bajaj Auto and Hero Moto also likely to post muted numbers.

Meanwhile, BHEL, Dr Reddy's Labs, L&T, Infosys and Cipla continued to support the indices.

The market is off day's high after the Indian manufacturing data hit a fresh 16-month low. The HSBC manufacturing Purchasing Managers' Index (PMI), which gauges business activity in Indian factories but not its utilities, fell to 52.0 in March, after a surge to 54.2 in February.

Sales of auto companies continue to lag in March. TVS Motor's total sales are down 8.2% at 1.67 lakh units, year-on-year. The estimates indicate a 10 percent drop in Maruti's volumes while in the two-wheelers segment, Bajaj Auto and Hero Moto are likely to post muted numbers.

The Sensex is down 1 point at 18833 shedding over 100 points from day's high of 18959. The Nifty is up 3 points at 5686.

Its a weak session across Asia, Japanese markets are the hardest hit, down 2% after  the Bank of Japan's Tankan survey came in below expectations with a reading of -8.

In Chinese economic data, March official manufacturing PMI came in at 50.9, which is higher than last month, but lower than estimates. Hong Kong and European markets are shut today.

DLF, Cairn India, Dr Reddy's, BHEL, Ranbaxy are top gainers.

Metal and auto stocks are down in trade. Sesa Goa, Jindal Steel, Tata Motors, M&M are top losers.

The broader markets are in focus today. Stocks like Core Education, Indiabulls Power, HDIL and Educomp are rallying in trade. The divestment candidates like STC, Hind Copper and MMTC are also buzzing.

Frontline shares were steady with the Nifty just shy of the psychological 5700-mark. The Sensex was up 40.48 points to 18876.25 and the Nifty was up 15 points at 5697.55. BHEL, L&T, Dr Reddy's Labs, Cipla and NTPC were the key gainers in the Sensex.

Capital goods and pharma stocks were in demand, while auto shares were subdued on concerns of a continuing decline in monthly sales.

Investors turned their attention to beaten down secondline shares, with the midcap index gaining over 1%.

Stocks like CORE Education (up 26.9 percent), Indiabulls Power (up 7.3 percent), HDIL (up 7.8 percent) and Educomp (up 6.5 percent) were among the key gainers.  The surge in CORE Education was attributed to the stock exchanges limiting the intra-day price band in the stock to 10 per cent with effect from Tuesday. While this does not materially change things for CORE, it does limit the downside in the stock to 10 per cent in a single session.

A similar price band has been placed for Suzlon Energy, Educomp and Essar Oil as well.

MTNL was up 5.7% after the company raised over Rs 1,000 crore through bonds backed by sovereign guarantee from institutional investors.

Meanwhile, both Sterlite and Sesa Goa were under pressure today, with the shares down 3.6 percent and 2.2 percent respectively. Sterlite has been asked to shut down its Tuticorin plant in Tamil Nadu after a preliminary inspection by the state pollution regulator.

The Nifty was trading steady around 5700 mark on day 1 of the April expiry. Cooling domestic and foreign demand weighed on Indian manufacturing growth in March, with the sector expanding at its slowest pace since November 2011, a business survey showed on Monday.

The HSBC manufacturing Purchasing Managers' Index (PMI), which gauges business activity in Indian factories but not its utilities, fell to 52.0 in March, after a surge to 54.2 in February.

Auto stocks are trading weak ahead of monthly sales numbers to be announced today. Buying is seen in realty, capital goods, pharma and power stocks.

Sensex is up 85 points at 18921 and the Nifty up 29 points at 5711.

DLF, Cairn India, Reliance Infra, Jaiprakash Associates and BHEL are top gainers in the Nifty.

Tata Motors, Sesa Goa, Jindal Steel, Hero Motocorp and IDFC are top losers.

Shares of Novartis India plunged more than 5 percent in morning trade on Monday after the Supreme Court rejected parent Novartis AG's patent plea on blockbuster cancer drug Glivec.

Supreme Court upheld tribunal and patent body order and said that Glivec failed test for innovation under the Patent Act.

Sterlite Industries is down 4%. The company has shut down its copper smelter plant in Tuticorin after the Tamil Nadu Pollution Control Board issued a notice to the company following a suspected sulphur dioxide leak last week.

Religare recommends holding Coal India with a target of Rs 330. Barclays has an overweight on Oil India with a target of Rs 675. CLSA has a buy on ACC with a target of Rs 1550. Credit Suisse has an outperform rating on Dr Reddy's with a target of Rs 2180.

Benchmarks began the new fiscal on a steady note, with the Sensex up 100.73 points at 18936.50, and the Nifty up 31.35 points at 5713.90.

Shares of state-owned Repco Home Finance, which listed on the BSE and NSE today, were quoting at Rs 172 (the issue was priced at Rs 172). The share opened at Rs 159.95, and touched a high of Rs 172.

Capital goods, power and realty stocks were adding strength to the indices. BHEL (up 2.6 percent), L&T (up 2.4 percent), Dr Reddy's (up 1.9 percent), Infosys (up 1.6 percent) and RIL (up 1.3 percent) were the key gainers in the Sensex.

Brokers attribute the rise in Dr Reddy's shares to the launch of generic Accutane in the US market. Brokerage house Morgan Stanley says assuming an incremental 20-25% price drop and 20% market share, this could be USD 50 million annual revenue opportunity for Dr Reddy's.

Polaris was up 5% on reports that the company was in talks with L&T Infotech and Wipro to sell its services business. Godrej Properties was up over 2% as it has got into in a joint-venture for 1.5 million sq ft housing project in Pune.

Most divestment candidates were buzzing in trade, Hindustan Copper was up 7.7 percent, while MMTC gained around 5 percent.

Among the smallcaps TRF added around 11.6 percent after the company won an order for Rs 360 crore.

Laggards of the day included Sterlite, Tata Motors, Jindal Steel, ITC and Sun Pharma.

Key indices were firm in early trade Monday, with realty and capital goods shares figuring among the key gainers.

The Sensex was up 46 points at 18,881, and the Nifty up 11 points at 5693.
India was among the better performers in Asia this morning, and brokers said the recovery was being driven partly by technical factors.

Hindustan Copper, BHEL and ABB were among the big gainers in early trade, rising around 3 percent each. Auto shares will be in focus as the companies announce their sales for March. Most analysts are not expecting any major surprise in sales numbers, which has been under pressure for the last couple of months.

JSW Steel, Havells India, Sterlite Industries and Sesa Goa were among the big laggards, down around 3-4 percent.

Dhiraj Agarwal of Standard Chartered Securities expects the market to remain challenging near term. He says the earnings performance for the January-March quarter may not meet market expectations. Also, the macro-economic situation has been worsening despite the reform measures by the government.

However, Saurabh Mukherjea of Ambit Capital is of the view that the overall mood in the market is so negative that many investors are missing signs of improvement in the economy.He does not expect the Nifty to fall below 5500, and says that the economy is turning around. This and a declining interest rate environment should provide a solid base for the market to rally here on, he says.

Technical analyst Sudarshan Sukhani is bullish on Reliance Industries and Coal India and is recommending his clients to go long on these stocks. He says the correction in Reliance Industries is done for now, and expects the stock to rise to Rs 785 near term. Sukhani has a target of Rs 320 for Coal India. He is very bearish on Tata Motors, saying that the technical chart indicates weakness. He is advising clients to sell the stock with a target of Rs 255.