Benchmarks trade flat in early deals ahead of CPI data

Indian equity benchmarks are trading flat in early deals on Monday as investors remained cautious ahead of CPI data for March which is slated to be announced after market hours, though all eyes this week will be on corporate performance of big companies like TCS and Reliance Industries. Though, some support came in with industrial output data for the month of February which came in at 5%, its fastest pace in nine months. Some support also came in with Prime Minister Narendra Modi wooing German investors said that opportunities in India are “seamless” and huge for a vibrant economic partnership. He also assured that ‘Invest India’ has been set up and country desks in it that will be networked to the states, he said that we will nurture innovation and protect intellectual property.

On the global front, the US markets extended their gains in last session, though there was not much supporting factor but traders took cues from report of GE restructuring GE Capital, also there was report of pullback in US import prices in the month of March. The Asian markets were trading mostly in the green at this point of time, led by over one and a half percent gains in Chinese markets.

Back home, on the sectoral front, capital goods, realty and consumer durables witnessed the maximum gain in trade, while auto, software and banking 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 1372 shares on the gaining side against 656 shares on the losing side while 91 shares remain unchanged.

The BSE Sensex is currently trading at 28888.92, up by 9.54 points or 0.03% after trading in a range of 28861.76 and 29005.03. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.67%, while Small cap index up by 0.98%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.94%, Realty up by 0.83%, Consumer Durables up by 0.80%, FMCG up by 0.61% and Infrastructure up by 0.42% while, Auto down by 0.34%, IT down by 0.33%, Bankex down by 0.17%, Metal down by 0.10% and TECK down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 1.77%, Sun Pharma Inds. up by 1.18%, Tata Steel up by 0.95%, Hindustan Unilever up by 0.88% and Larsen & Toubro up by 0.86%. On the flip side, GAIL India down by 2.54%, Dr. Reddys Lab down by 1.53%, Mahindra & Mahindra down by 1.35%, Tata Motors down by 1.00% and Hindalco down by 0.91% were the top losers.

Meanwhile, clocking its fastest pace in nine months, the index for industrial output (IIP) for the month of February came in at 5%, way higher than street expectation of a number of around 3.50% and also higher compared to 2.6% in January mainly on account of splendid growth of capital goods and consumer goods sector. The IIP staged a contraction of -2% in February, 2014. The cumulative growth for the period April-February 2014-15 over the corresponding period of the previous year stands at 2.8%. Encouragingly, January IIP growth too was revised upwards to 2.8% v/s 2.6%.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of February 2015 stand at 130.7, 192.9 and 166.0 respectively, with the corresponding growth rates of 2.5%, 5.2% and 5.9% as compared to February 2014. The indices for Mining, Manufacturing and Electricity sectors for the month of January 2015 at (-) 2.8%, 3.3% and 2.7% respectively. The cumulative growth in the three sectors during April-February 2014-15 over the corresponding period of 2013-14 has been 1.5%, 2.2% and 9.1% respectively.

As per Use-based classification, the growth rates in February 2015 over February 2014 are 5.0% in Basic goods, 8.8% in Capital goods and 1.1% in Intermediate goods.  The Consumer durables and Consumer non-durables have recorded growth of (-) 3.4% and 10.7% respectively, with the overall growth in Consumer goods being 5.2%.

Notably, the IIP data which has been positive since November is indicative of green-shoots for the economy. However, the big-bump in the macro data is mainly on account of lower base of February 2014 and the data for the month of March now holds the key since this would confirm if the economy is out of woods.

The government plans to release industrial output data based on a new methodology and use a different base year for calculating the index in the next few months. The industrial output data with “2004/05” as base year has become less relevant now after the government changed the methodology as well as the base year for GDP calculations in February. The revised base year for GDP is “2011/12”.

The CNX Nifty is currently trading at 8775.50, down by 4.85 points or 0.06% after trading in a range of 8767.80 and 8803.70. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were BHEL up by 1.96%, NMDC up by 1.92%, PNB up by 1.44%, Idea Cellular up by 1.35% and Sun Pharma up by 1.15%. On the flip side, GAIL India down by 2.49%, Mahindra & Mahindra down by 1.53%, Dr. Reddys Lab down by 1.33%, Tata Motors down by 1.11% and Sesa Sterlite down by 1.01% were the top losers.

Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI rose 1.34 points or 0.07% to 1,845.65, KOSPI Index increased 8.86 points or 0.42% to 2,096.62, Straits Times gained 10.43 points or 0.3% to 3,482.81, Nikkei 225 advanced 14.16 points or 0.07% to 19,921.79, Taiwan Weighted added 37.41 points or 0.39% to 9,655.11, Shanghai Composite surged 60.41 points or 1.5% to 4,094.72 and Hang Seng was up by 235.51 points or 0.86% to 27,507.90. On the flip side, Jakarta Composite was down by 30.25 points or 0.55% to 5,461.09.