Benchmarks continue weak trade in late afternoon session

Indian equity benchmarks continued its weak trade in the late afternoon session on account of selling in frontline blue chip counters. The sentiments continued to remain under pressure on reports that growth in India’s manufacturing sector slowed sharply in April as new business inflows were broadly unchanged during the month, adding worries to the government and policy makers. Traders were seen selling in Consumer Durables, Metal and Oil & Gas stocks while selling was witnessed in Bankex, IT and TECK sector stocks. In scrip specific development, InterGlobe Aviation were trading in red on reporting flat growth in net profit at Rs 579.31 crore for the quarter ended March 2016. The largest domestic airline by market share had posted a net profit of Rs 577.33 crore in the same period a year ago. Oberoi Realty was trading in red as the company’s consolidated net profit fell 37.34% to Rs 64.55 crore on 32.06% fall in total income to Rs 237.35 crore in Q4 March 2016 over Q4 March 2015.

On the global front, the Asian markets were trading in red while the European markets traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,850 and 25,500 levels respectively. The market breadth on BSE was negative in the ratio of 1179:1239 while 133 scrips remained unchanged.

The BSE Sensex is currently trading at 25468.20, down by 138.42 points or 0.54% after trading in a range of 25341.14 and 25565.44. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.08%, while Small cap index up by 0.35%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.23%, Metal up by 1.14%, Oil & Gas up by 0.45%, Realty up by 0.28%, Power up by 0.24% while, Bankex down by 0.99%, IT down by 0.65%, TECK down by 0.65%, FMCG down by 0.23%, Capital Goods down by 0.21% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.31%, GAIL India up by 1.86%, Cipla up by 0.93%, Lupin up by 0.92% and ONGC up by 0.55%.

On the flip side, ICICI Bank down by 4.21%, Dr. Reddy’s Lab down by 2.17%, Bharti Airtel down by 1.91%, Adani Ports & Special Economic Zone down by 1.80% and ITC down by 1.26% were the top losers.

Meanwhile, adding worries to the government and policy makers, the growth in India's manufacturing sector slowed sharply in April as new business inflows were broadly unchanged during the month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) falling to a four-month low stood at 50.5 in April from March’s 52.4, nearing the 50 mark that separates growth from contraction and the lowest reading of the year. A figure above 50 represents expansion while a reading below this level means contraction.

The survey highlighted that the upturn in new export orders was sustained, although growth was at a six-month low. There were divergences with regards to stock levels, with holdings of finished goods continuing to fall while pre-production inventories rose again. In contrast to the picture for total new business, new work from abroad continued to increase. The pace of growth in both domestic and foreign orders dwindled, pushing firms to reduce output. The output sub-index fell to a two-month low of 51.0 from 54.2.

According to the survey, in spite of the stagnation in new work, goods production increased in April. The rate of expansion was only slight and softened since March. Meanwhile, buying levels rose for the fourth successive month, which in turn resulted in a further accumulation in stocks of raw materials and semi-finished products. April saw manufacturing employment in India remain broadly unchanged, a trend that has been evident for almost two years. On the price front, input costs increased at the fastest rate in 11 months while charge inflation eased since March 2015. 

Talking about Indian Manufacturing PMI survey data, Pollyanna De Lima, Economist at Markit has said “PMI data for India show a marked slowdown in output expansion during April, as growth of new work ground to a halt following a robust increase in the prior month.”

The CNX Nifty is currently trading at 7815.20, down by 34.60 points or 0.44% after trading in a range of 7777.30 and 7829.80. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.27% and BHEL up by 2.43% and GAIL India up by 1.96% and Aurobindo Pharma up by 1.41% and Ambuja Cement up by 1.22%.

On the flip side, ICICI Bank down by 4.28%, Dr. Reddy’s Lab down by 2.00%, Adani Ports & Special Economic Zone down by 1.87%, Tech Mahindra down by 1.84% and Bharti Airtel down by 1.80% were the top losers.

The Asian markets were trading in red; Nikkei 225 decreased 518.67 points or 3.11% to 16,147.38, Jakarta Composite decreased 33.15 points or 0.69% to 4,805.43 and KOSPI Index decreased 16 points or 0.8% to 1,978.15.

Shanghai Stock Exchange, Hong Kong Stock Exchange, Malaysian Stock Exchange, Singapore Stock Exchange and Taiwan Stock Exchange were closed on account of National Holiday.

The European markets were trading in green; France’s CAC increased 14.69 points or 0.33% to 4,443.65 and Germany’s DAX increased 88.84 points or 0.88% to 10,127.81.