Benchmarks extend northward journey post December WPI data

Indian equity benchmarks extended their northward journey in afternoon deals with frontline gauges declining below their crucial 8,250 (Nifty) and 27,250 (Sensex) levels after Wholesale price inflation inched up to 0.11% in December, snapping a six-month easing trend as food costs jumped up year-on-year. Food articles inflation rose to 5.2% from 0.63% m-o-m while manufactured productions inflation went down to 1.57% compared to 2.04% m-o-m. Meanwhile, October WPI inflation was revised to 1.66% compared to 1.77% earlier. Sentiments also remained dampened on report that taxes on services, the biggest sector of India’s economy, declined by 5.2 per cent in December year-on-year, as a result of which overall indirect tax collections rose only 5.1 per cent in the month.

On the global front, Asian markets paring all their early gains were trading in red at this point of time as the negative cues overnight from Wall Street and weak commodity prices offset optimism about corporate earnings results. Back home, the Indian rupee was trading marginally lower at 62.16 to the US dollar compared to the previous close of 62.14.

On the sectoral front, software, technology and power witnessed the maximum gain in trade, while metal, fast moving consumer goods and healthcare 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 1093 shares on the gaining side against 1,450 shares on the losing side while 105 shares remain unchanged.

The BSE Sensex is currently trading at 27228.05, down by 197.68 points or 0.72% after trading in a range of 27228.05 and 27512.80. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.34%, while Small cap index down by 0.35%.

The gaining sectoral indices on the BSE were IT up by 0.36%, TECK up by 0.16% and Power up by 0.03% while, Metal down by 2.83%, FMCG down by 1.05%, Healthcare down by 0.91%, Oil & Gas down by 0.88% and Bankex down by 0.78% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.08%, BHEL up by 1.77%, Bajaj Auto up by 1.15%, Infosys up by 0.74% and Maruti Suzuki up by 0.68%. On the flip side, Hindalco down by 5.81%, Sesa Sterlite down by 4.23%, ITC down by 3.26%, Tata Steel down by 3.17% and GAIL India down by 1.88% were the top losers.

Meanwhile, the World Bank, in its latest update of its Global Economic Prospects, has highlighted that economic growth for developing countries is likely to pick up, spurred by falling oil prices and despite a slight slowdown in emerging economy China. Developing countries` GDP growth is expected to increase from 4.4% in 2014 to 4.8% in 2015 and further surge to 5.3% in 2016. 

Regarding the Indian economic growth, the World Bank’s report highlighted that India should be among the prime beneficiaries of the spectacular plunge in crude oil prices that has lost almost 60 percent of its value since June. The Asian giant, India, which is a net importer of crude oil, is likely to witness GDP growth at 6.4% this year from a 5.6% rate last year. On the Russian economic growth, it noted that Russia, which also is the target of western economic sanctions, is expected to suffer a 2.9% economic contraction this year before crawling back into growth in 2016.

Further, the report added that growing momentum in the developing countries would push growth in the global economy higher to a moderate 3.0% in 2015 from 2.6% in 2014, despite persistent weakness in the Euro zone and Japan. However, World Bank trimmed its global growth forecast from 3.4% projected in June. Further, it added that world GDP growth will reach 3.3 percent in 2016, as opposed to a June forecast of 3.5 percent, before dipping to 3.2 percent in 2017. 

The CNX Nifty is currently trading at 8245.95, down by 53.45 points or 0.64% after trading in a range of 8245.80 and 8326.45. There were 16 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.38%, Hindustan Unilever up by 2.20%, BHEL up by 1.96%, ACC up by 1.91% and Bajaj Auto up by 1.29%. On the flip side, Hindalco down by 6.06%, Sesa Sterlite down by 4.42%, ITC down by 3.36%, Tata Steel down by 3.19% and PNB down by 2.60% were the top losers.

Asian markets were trading lower; Nikkei 225 tumbled 291.75 points or 1.71% to 16,795.96, Hang Seng decreased 134.61 points or 0.56% to 24,081.36, Taiwan Weighted shed 51.57 points or 0.56% to 9,180.23, Shanghai Composite dropped 23.95 points or 0.74% to 3,211.36, FTSE Bursa Malaysia KLCI dipped 8.16 points or 0.47% to 1,740.74, Straits Times decreased 7.34 points or 0.22% to 3,333.73, Jakarta Composite slipped 4.07 points or 0.08% to 5,210.29 and KOSPI Index was down by 3.48 points or 0.18% to 1,913.66.