Markets continue to trade sluggish in early noon session

Indian equity benchmarks continued to trade under pressure in early noon session on account of sustained selling by funds and retail investors in the blue chip counters amid negative cues from the Asian markets, tracking overnight losses in the US and European markets. A weak micro economic data also weighed on the investors’ sentiment. IIP growth plunged to 0.1% in March due to poor performance of manufacturing and mining sectors coupled with a sharp decline in the output of capital goods, while retail inflation soared to 5.39% in April on higher food prices, reversing a downward trend seen in recent months. Meanwhile, according to proposals published by the Reserve Bank of India (RBI), Indian banks will have to make higher provisions for lending to large corporate borrowers above a certain level from next financial year.

On the global front, Asian markets were trading lower after a rocky performance on Wall Street, while the yen hovered near two-week lows as traders wagered the Bank of Japan will add to its massive stimulus before too long. Back home, in scrip specific development, share of Eicher Motors was trading down after the promoters sold more than 4% stake in the company through open market transaction. On the flip side, Manappuram Finance has surged over 16% on the BSE, after the company reported robust 87% year-on-year (YoY) growth in consolidated net profit at Rs 131 crore for the fourth quarter ended March 31, 2016 (Q4FY16). The company had registered a profit of Rs 70 crore in a year ago quarter.

The BSE Sensex is currently trading at 25560.89, down by 229.33 points or 0.89% after trading in a range of 25513.54 and 25743.69. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.06%, while Small cap index up by 0.07%.

The top gaining sectoral index on the BSE was FMCG up by 0.25%, while Metal down by 1.44%, Realty down by 1.11%, Capital Goods down by 1.00%, Bankex down by 0.99% and Auto down by 0.80% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 1.95%, Asian Paints up by 1.15%, Tata Motors up by 0.80% and ITC up by 0.63%. On the flip side, Hindustan Unilever down by 2.54%, ICICI Bank down by 2.31%, BHEL down by 2.03%, Bharti Airtel down by 2.01% and GAIL India down by 2.00% were the top losers.

Meanwhile, in a double setback for the Indian economy, retail inflation spiked in April, while industrial growth also stagnated in the month of March, which dented the chances of a rate cut by the Reserve Bank of India in the June review. India’s annual industrial output growth, measured by index of industrial production (IIP), plunged to 0.1 per cent in March due to poor performance of manufacturing and mining sectors coupled with a sharp decline in output of capital goods. Factory output measured in terms of Index of Industrial Production (IIP) was 2.5% in March last year. The index had registered a growth of about 2% in February this year.

As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, IIP with base 2004-05 for the month of March 2016 stood at 198.2, which is 0.1 percent higher as compared to the level in the month of March 2015. The cumulative growth for the period April-March 2015-16 over the corresponding period of the previous year stood at 2.4 percent.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of March 2016 stand at 148.8, 207.7 and 196.3 respectively, with the corresponding growth rates of (-) 0.1 percent, (-) 1.2 percent and 11.3 percent as compared to March 2015. The cumulative growth in these three sectors during April-March 2015-16 over the corresponding period of 2014-15 has been 2.2 percent, 2.0 percent and 5.6 percent respectively. In terms of industries, twelve out of the twenty two industry groups in the manufacturing sector have shown positive growth during the month of March 2016 as compared to the corresponding month of the previous year.

Among product categories, radio, TV and communication equipment and apparatus registered the highest growth at 36.5%, followed by tobacco products at 19.8 percent. Electrical machinery & apparatus on the other hand, continued to fall by the largest margin at 36.2 per cent. Cables, insulated rubber continued its long streak in contributing the most to the contraction in the index. On the other hand, electricity, commercial vehicles and telephone instruments were the highest positive contributors to growth.

As per Use-based classification, the growth rates in March 2016 over March 2015 are 4.0 percent in Basic goods, (-) 15.4 percent in Capital goods and 3.7 percent in Intermediate goods.  The Consumer durables and Consumer non-durables have recorded growth of 8.7 percent and (-) 4.4 percent respectively, with the overall growth in Consumer goods being 0.4 percent.

The CNX Nifty is currently trading at 7835.05, down by 65.35 points or 0.83% after trading in a range of 7819.10 and 7881.00. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 2.08%, Idea Cellular up by 1.56%, HCL up by 1.06%, Asian Paints up by 0.99% and Tata Motors up by 0.87%. On the flip side, Eicher Motors down by 3.81%, Hindustan Unilever down by 2.58%, Hindalco down by 2.57%, ICICI Bank down by 2.24% and GAIL India down by 2.08% were the top losers.

Asian markets were trading lower; Hang Seng decreased 263.25 points or 1.32% to 19,652.21, Nikkei 225 decreased 234.13 points or 1.41% to 16,412.21, Taiwan Weighted decreased 54.36 points or 0.67% to 8,053.69, Jakarta Composite decreased 30.84 points or 0.64% to 4,772.48, FTSE Bursa Malaysia KLCI decreased 22.45 points or 1.36% to 1,626.53, KOSPI Index decreased 10.5 points or 0.53% to 1,966.99 and Shanghai Composite decreased 3.07 points or 0.11% to 2,832.79.