Benchmarks continue weak trade in late afternoon session

Indian equity markets continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters. Investors were cautious on Assocham study which highlighted that inflation may have dropped significantly from last year, but most Indians still find prices of goods and services consumed on a daily basis growing beyond their comfort level. Traders were seen piling position in Capital goods, Power and Auto stocks, while selling was witnessed in Oil & Gas, Consumer Durables and PSU sector stocks. In the scrip specific development, Eros International Media was trading under pressure following a crash in shares of its New York Stock Exchange-listed holding company Eros International Plc, which distributes Indian-made films. Asian Paints was trading in red after India’s largest paint company reported of missed volume growth and margins estimates. Gujarat State Fertilizers & Chemicals (GSFC) was trading firm after the company reported a 14.74 percent jump in net profit to Rs 142.64 crore do for the September quarter.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was negative in the ratio of 973:1604 while 136 scrips remained unchanged.

The BSE Sensex is currently trading at 27422.63, down by 48.18 points or 0.18% after trading in a range of 27393.58 and 27618.14. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.38%, while Small cap index down by 0.41%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.81%, Power up by 0.50%, Auto up by 0.21% and IT up by 0.05%, while Oil & Gas down by 0.73%, Consumer Durables down by 0.64%, PSU down by 0.61%, Metal down by 0.38% and Bankex down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.36%, Vedanta up by 2.79%, Bajaj Auto up by 1.81%, Tata Steel up by 1.30% and Hero MotoCorp up by 0.82%.

On the flip side, Coal India down by 1.93%, Bharti Airtel down by 1.69%, Lupin down by 1.51%, Reliance Industries down by 1.19% and HDFC Bank down by 0.62% were the top losers.

Meanwhile, Consumer Price Index (CPI) inflation will be at least 25 bps lower that the actual CPI numbers, considering the need to include prices offered by e-retail market players while calculating retail inflation as rising online shopping, normally driven by heavy discounts, according to SBI Research report. The report said that only by considering the discount prices that too for a select group of products, CPI inflation can be brought down.

According to the report, CPI inflation numbers may be understating due to a variety of inflation estimation biases, of which e-commerce is one of the reasons. The report highlighted that a potential source of bias can arise when shifts to lower price discount outlets are inadequately reflected and hence there is a need to include the prices charged by the e-retailers like Flipkart, Snapdeal, Amazon etc, while calculating the CPI index, and if done so there may be a downward bias.

The report further said that books, apparel and accessories and electronics are the largest selling products on the online retailing platforms, constituting around 80 per cent of the volume. Apart from the evergreen product categories like electronics (including mobiles) and apparel, there is an emergence of new categories like home and kitchen and furniture, which have seen huge traction in the current year. As per the SBI Research report, the e-retailing, which comprises online retail and online marketplaces, has become the fastest-growing segment in the larger market having grown at a CAGR of around 56 per cent during 2009-14. The e-retail market was around $6 billion in 2015.

The CNX Nifty is currently trading at 8276.15, down by 19.30 points or 0.23% after trading in a range of 8263.55 and 8336.30. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.36%, Vedanta up by 2.99%, Bajaj Auto up by 2.00%, Tata Steel up by 1.48% and HCL Tech up by 1.41%.

On the flip side, Asian Paints down by 5.03%, Coal India down by 2.25%, Yes Bank down by 2.22%, Bharti Airtel down by 1.64% and Lupin down by 1.52% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 7.68 points or 0.38% to 2,048.08, Shanghai Composite increased 17.15 points or 0.5% to 3,429.58, Jakarta Composite increased 24.35 points or 0.52% to 4,677.50, Taiwan Weighted increased 71.55 points or 0.82% to 8,745.36 and Nikkei 225 increased 121.82 points or 0.65% to 18,947.12.

On the other hand, Hang Seng decreased 35.69 points or 0.15% to 23,116.25 and FTSE Bursa Malaysia KLCI decreased 6.45 points or 0.38% to 1,704.48.

The European markets were trading in red; UK’s FTSE 100 decreased 36.38 points or 0.56% to 6,407.70, France’s CAC decreased 38.23 points or 0.78% to 4,885.41 and Germany’s DAX decreased 30.88 points or 0.29% to 10,763.66.