Benchmarks continue to trade in negative territory

Indian bourses continued to trade in negative territory in the noon session after separate reports showed India's economic growth lost some momentum in the June quarter and infrastructure output growth slowed in July. India's economic growth rate slipped to 6-quarter low of 7.1% in April-June, as compared to 7.9% in the previous quarter, mainly due to subdued performance of mining, construction and farm sectors. Similarly, the Core Sector growth slowed to 3.2% in July, compared to 5.2% recorded in June. However, India Inc expects economy to grow at a healthier pace in coming quarters on the back of a good monsoon even as a pick-up in investments remains elusive. FICCI President Harshvardhan Neotia stated that he expects growth to gain momentum in the second half of the current fiscal year. The good monsoon is a huge positive and an improvement has been noted in the kharif acreage. Some support also came with report that manufacturing output in India grew at its fastest pace in thirteen months in August. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers Index edged higher in August, at 52.6 compared with 51.8 in July. In scrip specific development, ACC, Ambuja Cements, UltraTech and Jaiprakash Associates dropped 1-4 percent after the Competition Commission of India imposed a fine of Rs 6,320 crore on 10 cement companies for alleged cartelization.

On the global front, Asian markets were trading mostly in red after lower crude oil prices dented Wall Street and a pair of Chinese manufacturing surveys did little to inspire investors as markets waited to see if US employment data could put the Federal Reserve on track to hike interest rates.

The BSE Sensex is currently trading at 28460.52, up by 8.35 points or 0.03% after trading in a range of 28414.40 and 28542.72.There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading marginally in green; the BSE Mid cap index and the Small cap index both were up by 0.01%.

The top  gaining sectoral indices on the BSE were Auto up by 0.73%, Bankex up by 0.30%, Consumer Durables up by 0.23%, FMCG up by 0.16% and Metal up by 0.10%, while Realty down by 0.96%, TECK down by 0.82%, Capital Goods down by 0.40%, IT down by 0.11% and Power down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.32%, ICICI Bank up by 2.00%, Tata Motors up by 1.50%, Mahindra & Mahindra up by 1.07% and Bajaj Auto up by 0.83%. On the flip side, Bharti Airtel down by 6.06%, Wipro down by 1.49%, Asian Paints down by 1.16%, Adani Ports &Special down by 1.12% and HDFC Bank down by 0.89% were the top losers.

Meanwhile, India's gross domestic product (GDP), slipped to 7.1 per cent in April-June quarter of 2016-17 as compared to 7.9 percent in the January-March period. It is lowest in 6 quarters, mainly due to slower growth in construction and agriculture sectors and contraction in the mining sector. The economy had expanded at 7.5 percent in the April-June quarter of last financial year, 2015-16. The previous low was 6.6 per cent GDP growth in the October-December quarter of the 2014-15. GDP is calculated by adding taxes to gross value added and subtracting subsidies.

As per data released by the Central Statistics Office (CSO), GDP growth (measured in terms of constant 2011-12 market prices) for the First Quarter (Q1) of 2016-17 was estimated to be 7.1 per cent as against 7.5 per cent for Q1 of 2015-16. Growth of GDP for the full year 2015-16 was estimated to be 7.6 per cent. Gross Value Added (GVA), which is estimated at the basic price, showed a growth of 7.3 per cent in April-June of 2016-17 which is higher than the GDP growth rate of 7.2 per cent in Q1 2015-16. GVA growth is higher than the GDP growth because the growth in net indirect taxes declined from 11.9 per cent in Q1 2015-16 to 3.6 per cent in Q1 2016-17. 

The growth in agriculture and allied sectors is estimated at 1.8 per cent in Q1 2016-17, as against 2.6 per cent in Q1 2015-16. Manufacturing growth increased from 7.3 per cent in Q1 2015-16 to 9.1 per cent in Q1 2016-17. The growth in services increased from 8.8 per cent in Q1 2015-16 to 9.6 per cent in Q1 2016-17.

Attributing the slowdown in first quarter GDP to higher subsidy outgo, Finance Ministry stated that the lower growth in Q1 of 2016-17, compared to Q1 of 2015-16 is attributable to increase in subsidies by 53 per cent which has resulted in lower growth of net indirect taxes. It is also due to the negative growth in gross fixed capital formation. GFCF growth at constant prices declined from 7.1 per cent in Q1 of 2015-16 to (-) 3.1 per cent in Q1 2016-17.

Though, it expressed confidence that good monsoon and impact of pay commission award will push the economic growth close to 8 percent in the current fiscal. The Finance Ministry states that the GDP growth has also been helped by the improvement in the growth of export of goods and services from (-) 5.7 per cent in Q1 2015-16 to 3.2 per cent in Q1 2016-17, as well as, a reduction in the growth of imports from (-) 2.4 per cent in Q1 2015-16 to (-) 5.8 per cent in Q1 2016-17.

The CNX Nifty is currently trading at 8784.85, down by 1.35 points or 0.02% after trading in a range of 8770.60 and 8811.75. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.46%, ICICI Bank up by 1.92%, Tata Motors up by 1.52% and Mahindra & Mahindra up by 1.27% and Coal India up by 0.90%. On the flip side, Idea Cellular down by 8.88%, Bharti Airtel down by 6.23%, BPCL down by 2.28%, Wipro down by 1.74% and Bharti Infratel down by 1.60% were the top losers.

Asian markets were trading mostly in red, Taiwan Weighted decreased 67.7 points or 0.75% to 9,001.15, Jakarta Composite declined 47.87 points or 0.89% to 5,338.21, Shanghai Composite was down by 17.45 points or 0.57% to 3,068.04, FTSE Bursa Malaysia KLCI decreased 7.25 points or 0.43% to 1,670.81 and KOSPI Index decreased 1.93 points or 0.09% to 2,032.72.

On the flip side, Nikkei 225 increased 39.44 points or 0.23% to 16,926.84 and Hang Seng was up by 168.09 points or 0.73% to 23,144.97.