Benchmarks witness consolidation ahead of February IIP data

Indian equity benchmarks witnessed consolidation on Friday after five days of continuous rally as traders remained on sidelines ahead of the key macro data of IIP. Index of Industrial Production (IIP) data for February slated to be released today is expected to inch higher to 3.5-3.6 percent due to favourable base impact. Earlier, markets after a positive start entered into red terrain as investors opted to book profits after five days winning streak and extended their downfall to touch intraday lows. The indices even went on to test important psychological 28,750 (Sensex) and 8,750 (Nifty) levels, but the key gauges got solid support around those intraday low levels and staged a smart recovery in last leg of trade to end the session mixed, pairing almost all of their early losses.

Some support came in from report that Fitch retained India’s credit outlook at ‘stable’ saying although “dynamism” is back in the economy, translation of reforms into higher growth would depend upon actual implementation. It has also raised its forecasts for real GDP growth to 8 percent for current financial year and further to 8.3 percent in 2016-17. Meanwhile, with rating agencies Fitch and Moody’s affirming India’s credit outlook as “stable” and “positive” respectively, industry body Ficci has said that the move will uplift investor sentiment and help attract foreign investments. In other positive development, Paris-based think tank Organisation for Economic Cooperation and Development (OECD) has said that India’s economic expansion continues to firm up even as growth is easing in the neighbouring China.

Global cues too supported the sentiments with European counters were trading in the green in early deals following another positive session for Asian bourses as investors continue to snap up equities in a low bond-yield world. Asian markets ended mostly in the green on Friday after Greece repaid a 450 million euro loan it owed the International Monetary Fund on Thursday. A set of strong economic reports from the euro-currency bloc and continued hopes that China's central bank could ease its monetary policy further also underpinned investor sentiment heading into the weekend.

Back home, sentiments also got some support from report that foreign portfolio investors (FPIs) bought shares worth a net Rs 193.81 crore and Domestic institutional investors (DIIs) bought shares worth a net Rs 492.79 crore on April 9, as per provisional data. Rally in auto stocks too aided the sentiments after Society of Indian Automobile Manufacturers (SIAM) said domestic passenger car sales grew 2.64% to 1,76,011 units in March, from 1,71,491 units in the same month of last year. Telecom stocks too edged higher despite TRAI slashing ceiling tariffs for national roaming. Through this amendment order, the Authority has removed the existing mandate to the TSPs for providing Roaming Tariff Plan (RTP) and Roaming Tariff Plan Free (RTP FR) and has mandated the TSPs to offer a Special Roaming Tariff Plan to its pre-paid and post-paid subscribers. Additionally, hospitality and tourism stocks gained after Minister of Tourism said that Foreign Tourist Arrivals rose 5.3% to 7.30 lakh in March 2015 over March 2014.

The NSE’s 50-share broadly followed index Nifty rose marginally to hold its psychological 8,750 support level, while Bombay Stock Exchange’s Sensitive Index -- Sensex dipped by just five points to finish above around the psychological 28,850 mark. Broader markets, however, outperformed benchmarks and ended the session with a gain of around half a percent. The market breadth remained in favour of advances, as there were 1,644 shares on the gaining side against 1,171 shares on the losing side while 123 shares remain unchanged.

Finally, the BSE Sensex lost 5.83 points or 0.02% to 28879.38, while the CNX Nifty added 2.05 points or 0.02% to 8,780.35.

The BSE Sensex touched a high and a low of 28907.81 and 28756.75, respectively. The BSE Mid cap index was up by 0.39%, while Small cap index was up by 1.10%.

The top gainers on the Sensex were Sesa Sterlite up by 3.65%, SBI up by 1.85%, Dr. Reddys Lab up by 1.62%, Bharti Airtel up by 1.12% and Infosys up by 0.99%. On the flip side, Cipla down by 2.66%, HDFC Bank down by 1.53%, Hindalco down by 1.46%, HDFC down by 1.12% and Hero MotoCorp down by 0.99% were the top losers.

The gaining sectoral indices on the BSE were Infrastructure up by 1.15%, Realty up by 0.74%, Metal up by 0.72%, PSU up by 0.67% and Power up by 0.57% while, Bankex down by 0.35%, Capital Goods down by 0.31% and Healthcare down by 0.19% were the only losing indices on BSE.

Meanwhile, Paris-based think tank Organization for Economic Cooperation and Development (OECD) underscored that India's economic growth continues to expand even as growth has started easing in the neighboring China. The think tank's assessment is based on its Composite Leading Indicators (CLIs) that are designed to anticipate turning points in economic activity relative to trend. Notably, the development comes a day after Moody's Investors Service, expressing optimism in the efforts of the new government and the Reserve Bank of India, raised the rating outlook of the country to 'positive'.

CLIs signaled that growth was easing in China and Canada, albeit from relatively high levels, while it pointed to loss in growth momentum in Brazil and Russia. However, for India the indicator pointed to firming growth. Notably, India's CLI has been on the rise since October 2014 and touched 99.5 in February this year.

On the basis of new GDP series, the Indian economy is estimated to grow at 7.4% this fiscal, which would also make India the fastest growing large economy in the world. Further, the growth is expected to accelerate as Gross Domestic Product (GDP) is pegged at 8-8.5% in 2015-16. In a sign of encouragement, the Union Budget for 2015-16, Finance Minister Arun Jaitley, in February, had said 'aiming for a double-digit rate seems feasible very soon.

The CNX Nifty touched a high and low of 8,787.40 and 8,733.60 respectively.

The top gainers on Nifty were Idea Cellular up by 4.34%, Sesa Sterlite up by 3.54%, NMDC up by 2.12%, IDFC up by 2.06% and State Bank of India up by 1.78%. On the flip side, Cipla down by 2.70%, Zee Entertainment Enterprises down by 2.49%, Lupin down by 2.07%, Hindalco Industries down by 1.57% and Tech Mahindra down by 1.48% were the top losers.

European Markets were trading in the green; Germany's DAX was up by 1.12%, France's CAC was up by 0.42% and UK's FTSE 100 was up by 0.44%.

The Asian markets closed mostly in green on Friday, with Chinese indices closing up, as gains in the Life Insurance, Technology Hardware & Equipment and Media sectors led shares higher. China’s auto sales rose 3.3% year-on-year to 2.24 million vehicles in March rebounding from a holiday slowdown. Vehicle sales had slipped 0.2% from 2014 in February, which included a week-long holiday for the Chinese New Year. For the first three months, auto sales gained 3.9% on the same period last year to 6.15 million vehicles, according to the China Association of Automobile Manufacturers (CAAM). China’s inflation data for March produced small positive surprises, but remained tepid, with little sign that Beijing’s easing measures till date have significantly cut worrisome deflationary pressure. That has led many to predict more easing measures in the pipeline, including more cuts to reserve requirement ratios for banks, although there is debate over how effective those might be at juicing inflation. In March, China’s annual consumer inflation rate (CPI) stayed flat at 1.4%. Producer prices (PPI) fell slightly less than projected, contracting 4.6% rather than the forecasted repeat of February’s 4.8% pace. Malaysian Industrial Production fell to a seasonally adjusted annual rate of 5.2%, from 7.0% in the preceding month.