Benchmarks trade choppy in early deals on Tuesday

Indian equity benchmarks have made a cautious start and are trading choppy on the back of weak economic data, as after lower manufacturing numbers, growth in eight core industries has slowed down to 1.8% in January, its lowest in last 13 months, due to negative expansion in crude oil and natural gas. Also, the global rating agency S&P ruled out a rating upgrade for India within a year while Fitch said the government's fiscal consolidation strategy spelt out in Budget is “less aspiring” than in the past.

On the global front, the US markets rallied in last session, with the tech-heavy Nasdaq closing above 5,000 for the first time in fifteen years. There were mixed set of numbers but traders lapped the positive ones and led the markets higher. Personal income rose in January, while US manufacturing activity growth slipped to its lowest in 13 months. The Asian markets have mostly made a firm start, though some of the major indices are in red ahead of Friday's US jobs report.

Back home, on the sectoral front, software, healthcare and consumer durables witnessed the maximum gain in trade, while metal, auto and public sector undertaking remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1189 shares on the gaining side against 671 shares on the losing side while 70 shares remain unchanged.

The BSE Sensex is currently trading at 29461.45, up by 2.31 points or 0.01% after trading in a range of 29364.87 and 29502.62. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.75%, while Small cap index up by 0.69%.

The gaining sectoral indices on the BSE were IT up by 1.13%, Healthcare up by 0.99%, Consumer Durables up by 0.94%, TECK up by 0.92% and Oil & Gas up by 0.74% while, Metal down by 1.04%, Auto down by 0.88%, PSU down by 0.56%, Bankex down by 0.36%, Capital Goods down by 0.28% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.66%, Wipro up by 1.62%, Reliance Industries up by 1.58%, Sun Pharma up by 1.34% and Sesa Sterlite up by 1.12%. On the flip side, Coal India down by 5.24%, Axis Bank down by 2.58%, Mahindra & Mahindra down by 1.97%, Tata Motors down by 1.57% and ITC down by 1.00% were the top losers.

Meanwhile, in not so encouraging development for the economy, HSBC Manufacturing Purchasing Managers’ Index (PMI) survey showed that India’s manufacturing sector expanded at its slowest pace in five months in February as slowdown in new orders dragged the overall output. Dropping to its lowest level since September 2014, headline HSBC India Purchasing Managers’ Index fell from 52.9 in the previous month to 51.2 in February. A figure above 50 indicates the sector is expanding, while a figure below that level means contraction. Nevertheless, February marked 16th straight month of factory activity expansion.

The survey showed that recent slowdown was broad-based by sector, with softer increases recorded in the consumer, intermediate and investment goods sub-sectors. Meanwhile, new order although rose for sixteenth month in succession the growth was at the weakest pace since last September. The new orders sub-index fell to 51.9, the lowest level in five months, from January’s 54.4. The drop underscored softer domestic demand, which also accounted for a slight cut in headcount at firms.

On inflation, HSBC survey pointed that prices paid for inputs by goods producers in India decreased for the first time since March 2009, while output charge inflation was historically muted as some manufacturers offered discounts due to a competitive environment.

However, in a bit of positive for the economy, foreign orders rose at a strong and accelerated pace and the PMI remained in positive territory. The survey highlighted that these factors brighten the prospects for a rebound in output and employment in coming months. Also, if India was to grow strongly in the coming years, expanding at pace of 8.5% as highlighted by the government in the Union Budget 2015-16, then manufacturing sector too would get a boost.

The CNX Nifty is currently trading at 8946.20, down by 10.55 points or 0.12% after trading in a range of 8925.55 and 8966.10. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.66%, Jindal Steel & Power up by 1.85%, Bank of Baroda up by 1.48%, Wipro up by 1.47% and Reliance Industries up by 1.45%. On the flip side, Coal India down by 5.26%, Axis Bank down by 2.52%, Mahindra & Mahindra down by 2.26%, Ambuja Cement down by 1.94% and Tata Motors down by 1.59% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index rose 2.14 points or 0.11% to 1,998.95, Hang Seng advanced 4.81 points or 0.02% to 24,892.25, FTSE Bursa Malaysia KLCI increased 5.52 points or 0.3% to 1,822.65, Jakarta Composite gained 6.61 points or 0.12% to 5,484.45 and Straits Times was up by 22.25 points or 0.65% to 3,426.14.

On the flip side, Nikkei 225 decreased 37.77 points or 0.2% to 18,789.11, Shanghai Composite declined 30.84 points or 0.92% to 3,305.45 and Taiwan Weighted was down by 15.89 points or 0.17% to 9,585.47.