Post Session: Quick Review

The Indian markets finally came into consolidation mood on Wednesday and made a flat closing after a choppy trade. Though, the start was good and the benchmarks seemed extending their gaining streak on good global cues but the momentum waned in the very first hour and the markets slipped into red. The S&P BSE Sensex pared gains after rallying over 100 points, while the Nifty 50 slipped below its crucial level of 8500. Traders turned cautious with mixed set of macro data announced after the trading hours of last session. While, industrial production recovered, growing by 1.2 percent in May compared to (-) 0.8 percent in April, the retail inflation based on Consumer Price Index (CPI) rose marginally to 5.77 percent in June as against 5.76 percent in May. This was the third consecutive month of higher CPI numbers, mainly due to higher prices of vegetables and pulses. Traders grew concerned with main opposition Congress ahead of the Monsoon session of Parliament, stating that there is no change in its stand on the three principal demands on the Goods and Services Tax (GST) bill and it is still awaiting the government's offer on the issue. Though, Ghulam Nabi Azad, Leader of Opposition in the Rajya Sabha, where the Constitution Amendment Bill is pending, said a proposal from the government has come to resolve the pending issues, but Congress is yet to decide on it.

On the global front, after the extended rally of the US markets, the Asian markets followed the trend and most of them moved higher led by the Japanese market which gained around a percent. The Chinese market too inched higher despite both exports and imports of the country falling more than expected in June against a gloomy global economic outlook and the international court's stinging rejection of its territorial claims in the South China Sea. The European markets however made a positive start and moved further high on emerging signs that fallout from Britain’s vote to leave the European Union is under control.

Back home, the trade remained choppy through the day as investors lacked confidence to put further bets after two days continuous rally. Traders took a breather and remained cautious ahead of the government's announcement on the next central bank governor. Investors also booked some profits ahead of quarterly results; in major companies TCS will release its numbers on Thursday, while Infosys and Reliance Industries will disclose their earnings on Friday. However, it was gain in metal, oil & gas, and IT that supported the markets to some extent. The sentiments also remained positive with rupee strength. The Indian rupee on Wednesday was marginally higher against the US dollar, tracking the gains in its Asian peers. While the benchmarks faltered and Sensex ended flat, the Nifty 50 just managed to hold its crucial psychological level of 8500. The midcap rally too got a halt, while most of the sectoral indices made a negative close. The PSU oil companies though moved higher after the government paved the way to prune fuel subsidy. Oil companies have received the green signal to increase kerosene price by 25 paise every month till April 2017, a move that has not been publicly announced. Kerosene and LPG are sold well below their cost of production. Currently, under-recoveries on kerosene and LPG are Rs13.1 a litre and Rs 116 per cylinder, respectively. The government gives a subsidy of Rs 12 per litre on kerosene, while the balance is borne by upstream petroleum companies such as Oil India and ONGC.

The BSE Sensex ended at 27782.66, down by 25.48 points or 0.09% after trading in a range of 27752.14 and 27928.76. There were 14 stocks on gainers side against 16 stocks on decliners side on the index. (Provisional)

The broader indices too ended in red; the BSE Mid cap index was down by 0.62%, while Small cap index ended lower by 0.90%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.73%, IT up by 0.90%, TECK up by 0.67%, Oil & Gas up by 0.35%, PSU up by 0.25%, while Realty down by 2.40%, Power down by 1.00%, Consumer Durables down by 0.91%, Auto down by 0.85%, Capital Goods down by 0.79% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.12%, GAIL India up by 3.50%, ONGC up by 2.90%, Coal India up by 2.13% and Infosys up by 1.53%. On the flip side, Power Grid Corpn down by 3.30%, Lupin down by 1.47%, Maruti Suzuki down by 1.32%, Larsen & Toubro down by 1.27% and Asian Paints down by 1.14% were the top losers. (Provisional)

In a pleasant surprise, India's industrial production growth recovered and bounced back into the positive zone in May, after shrinking in the previous month. The growth was led by a pickup in manufacturing; however the growth showed just a tepid recovery, as the Index of Industrial Production (IIP) rose 1.2 percent in May from a year ago, after a 0.8-per cent contraction in the previous month and showing a growth of 2.5 percent in May last year. Meanwhile, the April IIP number was revised to a -1.3 per cent from the previously reported 0.8 per cent fall

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 May 2016 stood at 181.8, which is 1.2 percent higher as compared to the level in the month of May 2015. The cumulative growth for the period April- May 2015-16 over the corresponding period of the previous year stands at - 0.1percent.

On the sectoral basis, the growth of manufacturing index which occupies 75.52 percent weightage in the overall index grew a marginal 0.7 per cent in May this year compared to a growth of 2.1 per cent in same month last year. Electricity generation rose at a much slower rate of 4.7 per cent in May. On the other hand, mining output growth recovered modestly, rising 1.3 per cent compared to 1.2 per cent in the previous month.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of May 2016 stood at 129.5, 188.6 and 204.2 respectively. The cumulative growth in these three sectors during April-May 16 over the corresponding period of 2015 has been 1.2 percent, -1.5 percent and 9.4 percent respectively. In terms of industries, fourteen out of the twenty two industry groups in the manufacturing sector showed positive growth during the month of May 2016, as compared to the corresponding month of the previous year.

Growth rates among product categories mellowed in May with office, accounting and computing machinery growing at the highest rate of 18.8 per cent, followed by machinery and equipment, which rose 14.8 per cent. Furniture, which had registered the highest growth of 28 per cent in April, fell eight per cent in May. Electrical machinery & apparatus, on the other hand, continued to fall by the largest margin at 41 per cent.

As per Use-based classification, the growth rates in May 2016 over May 2015 were 3.9 percent in Basic goods, (-) 12.4 percent in Capital goods and 3.6 percent in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of 6.0 percent and (-) 2.2 percent respectively, with the overall growth in Consumer goods being 1.1 percent.

The CNX Nifty ended at 8515.35, down by 5.70 points or 0.07% after trading in a range of 8493.55 and 8550.25. 19 stocks advanced against 32 declining stocks on the index.(Provisional)

The top gainers on Nifty were Tata Steel up by 4.38%, GAIL India up by 3.62%, Coal India up by 2.55%, ONGC up by 2.46% and Idea Cellular up by 2.01%. On the flip side, Power Grid Corpn down by 3.36%, BPCL down by 2.88%, Indusind Bank down by 2.14%, Lupin down by 1.79% and Ultratech Cement down by 1.67% were the top losers. (Provisional)

European markets were trading in green, Germany’s DAX was up by 3.51 points or 0.04% to 9,967.58, France’s CAC was higher by 16.48 points or 0.38% to 4,347.86 and UK’s FTSE 100 gained 17.04 points or 0.26% to 6,697.73.

Asian markets ended higher on Wednesday, even as gains remained capped somewhat ahead of Chinese trade data released later in the day after regular hours on the major exchanges. Data from China's Customs Bureau offered few surprises as both exports and imports fell more than expected in June against a gloomy global economic outlook. Investors also await Chinese industrial output and GDP figures this week for further clues about the underlying direction of the world's second-largest economy. Japanese stocks got a boost from a weaker yen amid expectations that a double-bazooka of fiscal and monetary easing was on the cards after Prime Minister Shinzo Abe's coalition won a landslide victory in upper house elections over the weekend. Chinese stocks ended a tad higher as investors bet on further fiscal and monetary stimulus in the second half of 2016, following GDP data on Friday. The international court's stinging rejection of China's territorial claims in the South China Sea too had little impact on market sentiment. Hong Kong's shares ended higher after China's Premier Li Keqiang said its economy is ‘basically stable’ and on course to achieve the annual target of at least 6.5 percent.