Global growth concerns drag benchmarks lower in early deals

Extending their previous session southward journey, Indian equity benchmarks are trading with a cut of over half a percent in early deals on Monday with frontline gauges declining below their crucial 26,200 (Sensex) and 7,850 (Nifty) levels pressurized by feeble global cues. The US markets extended their weakness in last session with the Dow erasing gains for the year and S&P posting its biggest weekly loss in two years. The Asian markets too have extended the rout and most of the indices were suffering with deep cut at this point of time as promising trade numbers out of China failed to cheer a market still worried about faltering global growth.

Back home, sentiments remained dampened on account of disappointing IIP data announced after the market hours on Friday, which rose by just 0.4 per cent in August, substantially below the expectation of 2.4 per cent. Marketmen also remained on sidelines ahead of Consumer Price Index (CPI) data to be announced later in the day; however it is expected to ease to 7.2 per cent for the September as compared to 7.8 per cent reported in the month of August, helped by lower food and fuel costs.

On the sectoral front, software, technology and metal witnessed the maximum gain in trade, while realty, oil and gas and infrastructure remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 809 shares on the gaining side against 1017 shares on the losing side while 58 shares remain unchanged.

The BSE Sensex opened at 26275.07; around 22 points lower as compared to its previous closing of 26297.38, and has touched a high and a low of 26276.57 and 26112.78 respectively. The BSE Sensex is currently trading at 26124.78, down by 172.60 points or 0.66%. There were 7 stocks advancing against 23 stocks declining on the index.

The overall market breadth remained in the favour of decliners with 42.94% stocks advancing against 53.98% declines. The broader indices were trading in red; the BSE Mid cap index was down by 0.22%, while Small cap index down by 0.12%.

The few gaining sectoral indices on the BSE were IT up by 0.50%, TECK up by 0.26% and Metal up by 0.11% while, Realty down by 1.63%, Oil & Gas down by 0.93%, Infrastructure down by 0.77%, FMCG down by 0.74%, Healthcare down by 0.65% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.38%, TCS up by 1.14%, Infosys up by 1.12%, Tata Steel up by 0.51% and SBI up by 0.28%. On the flip side, Wipro down by 2.71%, Cipla down by 2.39%, Mahindra & Mahindra down by 1.76%, Bharti Airtel down by 1.66% and Dr. Reddys Lab down by 1.60% were the top losers.

Meanwhile, contradicting the signs of economic revival, Indian industrial production (IIP) slows down to 0.4% y-o-y in the month of August as compared to 0.5% growth in the previous month and 0.4% in the same month of previous year. IIP growth in August was below than market expectation and mainly dragged down by contraction in manufacturing sub-sector. The cumulative growth of industrial production for the period April-August’ FY15 recorded at 2.8% as compared to 0% growth in the same period of previous fiscal. 

Sector wise, the output of manufacturing sector, which occupies 75.52% weightage in the overall index, declined by 1.4% in August as compared to the de-growth of 1% in the previous month. Electricity sector, which occupies 10.32% weightage in the overall index, grew by 12.9 % in the reported month as against 11.7% in July and mining sector output grew by 2.6% as compared to 2.1% in the previous month. The cumulative growth of Mining, Manufacturing and Electricity sectors during April-August’ FY15 over the corresponding period of 2013-14 stood at 2.5%, 1.8% and 11.7% respectively.

On Use-based classification, capital goods production, a barometer for investments in the economy, witnessed a contraction of 11.3% in August as against a de-growth of 3.8% in July, showing that companies did not add new capacities in the reported month.

Further, the consumer durables sector witnessed a massive contraction as the sector’s production declined by 15% in August as compared to 20.90% contraction in the previous month. Consumer non-durables output declined marginally by 0.9% in August as compared to 2.9% in July. However, the output of basic goods sector grew by 9.6% as against 7.6% in July. 

The CNX Nifty opened at 7,831.00; around 28 points lower as compared to its previous closing of 7,859.95, and has touched a high and a low of 7,835.10 and 7,796.00 respectively.

The CNX Nifty is currently trading at 7817.60, down by 42.35 points or 0.54%. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 1.41%, Hero MotoCorp up by 1.38%, Infosys up by 1.21%, TCS up by 1.08% and Lupin up by 0.88%. On the flip side, DLF down by 3.87%, Wipro down by 2.80%, Cipla down by 2.48%, ACC down by 1.92% and Bharti Airtel down by 1.91% were the top losers.

Asian markets were trading in the red; Hang Seng slipped 146.82 points or 0.64% to 22,941.72, KOSPI Index contracted by 14.29 points or 0.74% to 1,926.63, Straits Times tumbled by 23.78 points or 0.74% to 3,200.09, Jakarta Composite dipped 33.76 points or 0.68% to 4,929.20, Shanghai Composite dropped 23.15 points or 0.97% to 2,351.39, FTSE Bursa Malaysia KLCI declined by 5.91 points or 0.33% to 1,802.97 and Taiwan Weighted was down by 207.57 points or 2.31% to 8,758.87.

The Japanese market remained shut for the trade today for Health-Sports Day holiday.