Sensex, Nifty at day`s high; India Manufacturing PMI at 55.5 in Dec

Equity indices extended gains and hit fresh intraday high in early afternoon trade. The Nifty raced towards 17,550 level. Barring pharma space, buying demand was seen across the board.

At 12:30 IST, the barometer index, the S&P BSE Sensex, jumped 670.54 points or 1.15% at 58,924.92. The Nifty 50 index surged 193.90 points or 1.12% at 17,547.30.

In the broader market, the S&P BSE Mid-Cap index rose 0.99% while the S&P BSE Small-Cap index gained 1.24%.

The market breadth was strong. On the BSE, 2,683 shares rose and 781 shares fell. A total of 145 shares were unchanged.

COVID-19 Update:

India added 33,750 new cases in the last 24 hours taking active caseload to 1,45,582 patients. Total deaths due to COVID-19 stood at 481,893. Meanwhile, the country reported 1,700 new omicron cases.

West Bengal imposed a series of new COVID-19 related restrictions from 3 January under which all schools and colleges will remain shut. Restrictive measures have also been imposed on shopping malls, market complexes, restaurants, and bars, wherein only 50% of their total capacity is allowed.

Since it was first detected in South Africa last month, the omicron variant has spread across the globe and is now present in 106 countries.

Economy:

The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers` Index (PMI) stood at 55.5 in December, pointing to a robust improvement in overall operating conditions that was elevated by historical standards. This was despite the headline figure slipping from November`s ten-month high of 57.6. Moreover, the latest quarterly reading was at 56.3, its highest since the final quarter of fiscal year 2020/21.

Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit said, "The last PMI results of 2021 for the Indian manufacturing sector were encouraging, with the economic recovery continuing as firms were successful in securing new work from domestic and international sources. Higher sales underpinned a further upturn in production and companies carried on with their restocking efforts. "Manufacturers were optimistic that output would continue to increase in 2022, but business sentiment was somewhat tamed by worries surrounding the path of the pandemic, inflationary pressures and lingering supplychain disruptions. "There were tentative signs that inflationary pressures started to subside, but companies weren`t particularly confident that such trend would continue. Despite easing in December, input cost inflation was still running at one of its highest rates in around seven-and-a-half years. The vast majority of firms nevertheless decided to keep their selling prices unchanged, in order to boost sales, with overall charges up only marginally in December."

Derivatives:

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, rose 0.64% to 16.3275. The Nifty 27 January 2022 futures were trading at 17,560, at a premium of 40 points as compared with the spot at 17,520.

The Nifty option chain for 27 January 2022 expiry showed maximum Call OI of 21.2 lakh contracts at the 17,500 strike price. Maximum Put OI of 33.4 lakh contracts was seen at 17,000 strike price.

Buzzing Index:

The Nifty IT index gained 0.98% to 39,074.80. The index has rallied 2% in three days.

TCS (up 1.75%), Mphasis (up 1.61%), L&T Technology Services (up 1.47%), L&T Infotech (up 1.18%), Coforge (up 1.15%), Mindtree (up 1.12%) and Infosys (up 0.8%) were top gainers in IT space.

Stocks in Spotlight:

Coal India advanced 4.52% to Rs 152.65 after the state-run coal major`s offtake stood at 60.7 million tonnes (MT) in December 2021, growing 15.7% as compared with 52.5 MT recorded in the same month last year. The company`s coal production rose 3.3% to 60.2 million tonnes (MT) in December 2021 from 58.3 MT in December 2020.

Transformers and Rectifiers (India) jumped 7.51% to Rs 37.95 after the company said that it has been awarded orders of transformers for total contract value of Rs 235 crore from Gujarat Energy Transmission Corporation (GETCO). With this order, the company`s order book as on date stands around Rs 986 crore.

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