Benchmarks extend southward journey; Sensex slips below 25,000 mark

Extending their southward journey for fifth day in a row, Indian equity benchmarks are trading in red in early deals with frontline gauges declining below their crucial 25,000 (Sensex) and 7,450 (Nifty) levels. Traders remained on sidelines ahead of consumer price index (CPI) and wholesale price index (WPI) data for the month of June to be released later in the day. The consumer price inflation probably would have eased to 7.95% last month, down from May’s 8.28%. However, losses remained capped as some support came in after the Index of Industrial Production (IIP) for the month of May came in at 4.7 percent versus 3.4 percent month-on-month. Growth in IIP numbers are good signs for capital goods sector and metal and mining sectors.

On the global front, the US markets showed modest gains in last session on bargain hunting following the notable selloff seen earlier this week, though the week ended in red on European concern. The Asian markets were trading mostly in the green at this point of time on course for their first gain in five days.

Back home, on the sectoral front, capital goods, power and oil and gas witnessed the maximum gains in trade, while consumer durables, software and technology remained the top losers on the BSE sectoral space. The broader indices too were trading in-line benchmarks, while the market breadth on the BSE was negative; there were 706 shares on the gaining side against 1,086 shares on the losing side while 80 shares remain unchanged.

The BSE Sensex opened at 25093.16; around 69 point higher compared to its previous closing of 25024.35, and has touched a high and a low of 25095.76 and 24915.93 respectively. The index is currently trading at 24985.63, down by 38.72 points or 0.15%. There were 14 stocks advancing against 16 declines on the index.

The overall market breadth has made a negative start with 37.71% stocks advancing against 58.01% declines. The broader indices were trading in the green; the BSE Mid cap and Small cap indices down by 0.22% and 0.58% respectively. 

The top gaining sectoral indices on the BSE were, Capital Goods up by 0.57%, Power up by 0.31%, Oil and Gas up by 0.20%, Realty up by 0.15% and Auto up by 0.13%, while Consumer Durables down by 1.16%, IT down by 1.10%, TECk down by 1.03%, Healthcare down by 0.58% and Metal was down by 0.44% were the top losers on the sectoral index.

The top gainers on the Sensex were HDFC up by 1.70%, Tata Power up by 1.37%, Hindalco up by 1.08%, L&T up by 0.95% and TCS up by 0.78%. On the flip side, Infosys was down by 2.90%, SSLT was down by 1.99%, Coal India was down by 1.90%, Bharti Airtel was down by 1.82% and HUL was down by 1.69% were the top losers on the Sensex.

Meanwhile, in an encouraging development for the economy, India’s annual industrial output growth, measured by index of industrial production (IIP), beating street expectation, expanded for the second straight month at 19 months high of 4.7% in May after posting growth of 3.4% in April, which was its first since January.  Meanwhile, the General Index for the month of May 2014 grew at highest level since October 2012 at 173.8 as compared to 172.1 in April. The cumulative growth for the period April-May 2014-15 over the corresponding period of the previous year stands at 4.0%.

Better than expected performance of factory output data is on the back of stellar performance of electricity sector and second consecutive month of growth posted by manufacturing sector. The manufacturing sector, which occupies 75.52% weightage in the overall index, grew by 3.7% at 181.6 as compared to growth of 2.6% in April.  However, electricity index, which occupies 10.32% weightage in the overall index, grew by less sharper growth of 9% at 183.2 for the month under review as compared to astonishing growth of 11.9% in April.

Additionally, mining index that weighs 14.15% in the overall index too grew by 2.6% at 125.6 for the month under review. The cumulative growth of Mining, Manufacturing and Electricity sectors during April-May 2014-15 over the corresponding period of 2013-14 stood at 2.6%, 3.7% and 9.0% respectively.

On Use-based classification, capital goods production, a barometer for investments in the economy, in an encouraging development, too grew by 4.5% in May as against massive expansion of 15.7% in April. Further, Consumer durables and Consumer non-durables recorded growth of 3.2% and 3.9% respectively, with the overall growth in Consumer goods, growing at multi-month high of 3.7%.

This data will definitely be heartening development for Narendra Modi government, which is looking to revive the economy by bolstering growth of manufacturing sector. Further, this data cements the case for Reserve Bank of India slashing rates over the next few policies, as indicated by Governor Raghuram Rajan in the second bi-monthly policy on June 3.

The CNX Nifty opened at 7,469.00; about 10 points higher as compared to its previous closing of 7,459.60, and has touched a high and a low of 7,471.65 and 7,426.45 respectively. The index is currently trading at 7,445.15, up by 14.45 points or 0.19%. There were 23 stocks advancing against 27 declines on the index.

The top gainers of the Nifty were HDFC up by 1.78%, Asian paints up by 1.46%, MCDOWELL-N up by 1.32%, BPCL up by 1.28% and Tata Power up by 1.18%. On the flip side, Infosys down by 3.03%, Bharti Airtel down by 1.92%, HCL Tech down by 1.89%, Coal India down by 1.87% and HUL down by 1.69% were the major losers on the index.

Asian markets were trading mostly in the green; Nikkei 225 spurted by 59.41 points or 0.39% to 15,223.45, Hang Seng increased 96.67 points or 0.42% to 23,330.12, KOSPI Index soared 7.87 points or 0.40% to 1,996.61, Shanghai Composite gained by 7.87 points or 0.38% to 2,054.83, FTSE Bursa Malaysia KLCI strengthened by 0.72 points or 0.04% to 1,883.87 and Taiwan Weighted was up by 34.43 points or 0.36% to 9,530.27.

On the flip side, Straits Times dropped 4.94 points or 0.15% to 3,288.79 and Jakarta Composite was down by 12.16 points or 0.24% to 5,020.44.