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 front line blue chip counters. The sentiments were on pessimistic note from morning trade tracking muted trends seen in other Asian markets as commodity slump dragged the markets lower. The government data released yesterday showed annual industrial output grew at a slower-than-expected pace of 3.6 percent in September, dampened mainly by a slower of in the mining sector, too added some selling pressure on the street. Investors paid no heed towards the International Monetary Fund (IMF) which said that India’s growth will benefit from recent policy reforms, a consequent pickup in investment, and lower commodity prices. Traders were seen piling position in Metal and Consumer Durables stocks, while selling was witnessed in Capital Goods, IT and TECK sector stocks. In the scrip specific development, Eros International Media was locked at lower circuit limit on news reports that its US parent company Eros plc came under analysts’ scanner on reportedly overstating the economic reality of the company’s business model. National Fertilizers was trading in red on reporting a 12 percent fall in net profit at Rs 54.19 crore for the second quarter ended September 30.

On the global front, the Asian markets were trading mostly in red, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,800 and 25,700 levels respectively. The market breadth on BSE was negative in the ratio of 802:1641 while 148 scrips remained unchanged.

The BSE Sensex is currently trading at 25616.96, down by 249.99 points or 0.97% after trading in a range of 25540.73 and 25724.09. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.43%, while Small cap index down by 0.79%.

The gaining sectoral indices on the BSE were Metal up by 1.01% and Consumer Durables up by 0.34%, while Capital Goods down by 1.79%, IT down by 1.57%, TECK down by 1.57%, FMCG down by 1.53% and Auto down by 1.21% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.31%, Axis Bank up by 0.87%, Tata Steel up by 0.70%, Reliance Industries up by 0.32% and Bharti Airtel up by 0.27%.

On the flip side, Vedanta down by 4.23%, ONGC down by 3.32%, Hindalco down by 3.24%, TCS down by 3.04% and Bajaj Auto down by 2.99% were the top losers.

Meanwhile, showing signs of disappointment, India’s annual industrial output growth, measured by index of industrial production (IIP), slowed to four month low of 3.6% in September after posting growth of 6.2% in August, due to subdued performance by manufacturing and non-durable consumer goods segments. The factory output had grown by 2.6 percent in September last year. As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, Index of Industrial Production (IIP) with base 2004-05 for the month of September 2015 stood at 178.0, which is 3.6% higher as compared to the level in the month of September 2014. The cumulative growth for the period April-September 2015-16 over the corresponding period of the previous year stands at 4%.

On the sectoral basis, growth of manufacturing index which occupies 75.52% weightage in the overall index grew by 2.6 percent in September, 2015 against 2.7 percent in the same month last year. During April-September period, manufacturing sector grew at 4.2 percent as compared to 2.2 percent growth in same period a year ago. On the flip side, the mining sector growth was at 3 percent in September against 0.1 percent in the same month last fiscal, meanwhile, the  growth of electricity index, which occupies 10.32% weightage in the overall index, grew by 11.4% in September 2015 against 3.9% same month last year.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of September 2015 stand at 118.8, 186.7 and 195.7 respectively, with the corresponding growth rates of 3.0%, 2.6% and 11.4% as compared to September 2014. The cumulative growth in the three sectors during April-September 2015-16 over the corresponding period of 2014-15 has been 1.5%, 4.2% and 4.5% respectively. In terms of industries, eleven out of the twenty two industry groups in the manufacturing sector have shown positive growth during the month of September 2015 as compared to the corresponding month of the previous year.

As per Use-based classification, the growth rates in September 2015 over September 2014 are 4.0% in Basic goods, 10.5% in Capital goods and 2.1% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 8.4% and (-) 4.6% respectively, with the overall growth in Consumer goods being 0.6%. Electricity generation witnessed a growth of 11.4 per cent in September, compared to 3.9 per cent in September 2014 and 5.6 per cent in August. Mining activity also picked up, as evident by a 3 per cent growth compared to 0.1 per cent growth during the same period last year. However, it was at a slower pace compared to 3.8 per cent achieved in August. Capital goods production though remained healthy, it grew at a slower pace at 10.5 per cent during the month compared to 12.3 per cent in September 2014 and 21.8 per cent in August. Power generation grew at 11.4 percent in September against 3.9 percent in the same month a year ago.  Despite the moderation, India Inc has said that, the industrial growth is likely to pick up in the third quarter, largely due to the festive season demand.

The CNX Nifty is currently trading at 7757.75, down by 67.25 points or 0.86% after trading in a range of 7730.90 and 7774.80. There were 11 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Coal India up by 3.58%, Kotak Mahindra Bank up by 2.51%, BPCL up by 1.28%, Axis Bank up by 0.86% and Tata Steel up by 0.73%.

On the flip side, Vedanta down by 4.18%, Cairn India down by 4.12%, Zee Entertainment down by 3.66%, ONGC down by 3.57% and Hindalco down by 3.49% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 492.78 points or 2.15% to 22,396.14, Nikkei 225 decreased 100.86 points or 0.51% to 19,596.91, Taiwan Weighted decreased 98.59 points or 1.17% to 8,329.50, Shanghai Composite decreased 52.06 points or 1.43% to 3,580.84 and KOSPI Index decreased 20.07 points or 1.01% to 1,973.29.

On the other hand, FTSE Bursa Malaysia KLCI increased 0.16 points or 0.01% to 1,663.36 and Jakarta Composite increased 12.51 points or 0.28% to 4,474.73.

The European markets were trading in red; UK’s FTSE 100 decreased 31.49 points or 0.51% to 6,147.19, Germany’s DAX decreased 37.36 points or 0.35% to 10,745.27 and France’s CAC decreased 24.03 points or 0.49% to 4,832.62.