Markets cheer positive GDP data

The Indian equity markets showed widespread positive sentiments on the first trading day of the month on Friday. The S&P BSE Sensex was at 33,225.09 points, up by 75.74 points or 0.23 per cent, while Nifty50 was trading at 10,251.20 points, up by 24.65 points or 0.24 per cent at 10:45 hours.

The bulls overtook the bears following a gap-up opening, where the Sensex opened at 33247.66, up 98.31 points. The Sensex heavyweights including Tata Motors was at Rs. 409.50 per share, up 1.20 per cent, ITC was at Rs. 258.70, up 1.19 per cent, ONGC was at Rs. 182.45, up 1.05 per cent, Maruti was at Rs. 8,683.05, up 0.94 per cent and L&T was at Rs. 1,228.00, up 0.92 per cent. While on the Nifty50 there were 31 advances, 18 declines and one unchanged stock.

The positive sentiments can be attributed to the growth in India's Gross Domestic Product (GDP) numbers for Q2. The economy grew by 6.3 per cent in the July to September quarter, rising from a 3-year growth slump of 5.7 per cent in the April to June quarter. The sectors which witnessed a growth of around 6 per cent were the manufacturing, power and utilities, transport and communication, broadcasting, financial services and defence. The manufacturing sector saw an uptick as companies resumed normal production after the GST destocking exercise ended. Whereas the sectors which experienced lower growth were agriculture, mining and construction.

The Gross Value Added (GVA) grew 6.1 per cent, due to greater production activity in factories, said the data released by the Central Statistics Office (CSO). GVA is GDP minus taxes.

CSO believes that there could be an underestimation in the numbers as earlier the GVA from the trade sector was estimated using sales tax data, which now are to be derived from the GST collection.