Post Session: Quick Review

Indian equity benchmarks traded on choppy note oscillating between positive and negative terrain. The final hour of buying however helped benchmarks end the session in green with modest gains. The benchmarks started the trade in red as investors indulged in cutting down their bets on disappointing macroeconomic data and weak trend in Asian markets. India’s factory output again dipped to a negative growth of (-) 2.4 percent in July from an expansion of 1.95 per cent in the month before, dragged down by a negative growth of (-) 3.4 percent in the manufacturing sub-index, which enjoys the maximum weight in the main index, however India’s annual retail inflation eased by 100 basis points to 5.05 percent in August.  The cooling of retail inflation and 2.4% contraction of factory output in July has revived hopes for a rate cut by RBI in its next policy meet on October 4 to boost growth. Some selling crept in after Indian rupee opened weak against the US dollar at the Forex market as demand for American currency rose among banks and importers. Investors took cautious approach on report that India is likely to post its first current account surplus in nine years in the latest quarter, which should bolster the rupee though it is not a good sign for the economy as it reflects weak investment demand at home and subdued exports, too added some selling pressure. For the full year ending in March 2017, India is likely to post a deficit even lower than last year’s 1.1% of GDP, as foreign investment inflows remain steady. For a developing economy like India slow import growth is a negative sign, as it reflects weak investment demand because Indian firms need to buy capital goods and machinery from abroad.

On the global front, Asian markets ended lower; Malaysia’s ringgit sank to its lowest since June as the prospect of global central banks turning less accommodative unnerves investors. Traders are looking for secure positions with investors counting down to meetings of the Bank of Japan and the Federal Reserve next week. European shares rose, breaking a four-day losing streak after markets sold off globally on the back of concerns about the effectiveness of central bank policy.

Back home, mixed performance was displayed in Oil & Gas sector stocks, as the global rating agency Fitch ratings has said that after growing at a robust 7.8 percent in first quarter, India’s fuel consumption growth is likely to moderate at around 5-6 per cent in the current fiscal.

The BSE Sensex ended at 28387.71, up by 34.17 points or 0.12% after trading in a range of 28259.38 and 28416.41. There were 17 stocks advancing against 13 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.35%, while Small cap index was up by 1.22%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.89%, Bankex up by 0.87%, Auto up by 0.66%, Power up by 0.57% and PSU up by 0.53%, while IT down by 0.68% and TECK down by 0.40% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 2.93%, Tata Motors up by 1.89%, Axis Bank up by 1.87%, SBI up by 1.84% and NTPC up by 1.70%. (Provisional)

On the flip side, Coal India down by 1.72%, ONGC down by 1.63%, TCS down by 1.06%, Sun Pharma down by 0.87% and Infosys down by 0.76% were the top losers. (Provisional)

Meanwhile, India’s Wholesale price index (WPI) inflation rose to 3.74% month-on-month in August, as prices of manufactured items increased, while food inflation softened. For the month of June, 2016, the final Wholesale Price Index stood at 182.9 as compared to 182.0 (provisional) and annual rate of inflation based on final index stood at 2.12 percent as compared to 1.62 percent (provisional).

As per the data of Ministry of Commerce & Industry, the annual rate of inflation, based on monthly WPI, stood at 3.74% (provisional) for the month of August, 2016, as compared to 3.55% (provisional) for the previous month and -5.06% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 4.45% compared to a build up rate of 0.23% in the corresponding period of the previous year.

Component wise, primary articles index, having weight of 20.12%, witnessed a decline of 0.2% to 268.9 (provisional) from 269.5 (provisional) for the previous month. Among the primary articles, the index for ‘Food Articles’ group declined by 0.6% to 284.2 (provisional) from 285.8  (provisional) for the previous month and the index for ‘Non-Food Articles’ group dropped by 0.1% to 236.3 (provisional) from 236.6 (provisional) for the previous month. On other hand, the index for ‘Minerals’ group rose by 3.5% to 216.3 (provisional) from 208.9 (provisional) for the previous month.

Fuel & Power index having weight of 14.91% decreased by 3.0% to 182.2 (provisional) from 187.9 (provisional) for the previous month due to lower price of  high speed diesel.

Manufactured Products index having weight of 64.97% increased by 0.2% to 156.7 (provisional) from 156.4 (provisional) for the previous month. Among the items in the group, the index for ‘Food Products’ rose by 1.1% to 191.3 (provisional) from 189.2 (provisional) for the previous month, the index for ‘Beverages, Tobacco & Tobacco Products’ group rose by 0.5% to 221.9 (provisional) from 220.7 (provisional) for the previous month, the index for ‘Textiles’ group rose by 0.4% to 142.1 (provisional) from 141.5 (provisional) for the previous month, the index for ‘Wood & Wood Products’ group rose by 0.8% to 197.6 (provisional) from 196.1 (provisional) for the previous month, the index for ‘Paper & Paper Products’ group rose by 0.2% to 157.0 (provisional) from 156.7 (provisional) for the previous month, the index for ‘Rubber & Plastic Products’ group rose by 0.8% to 147.6 (provisional) from 146.5 (provisional) for the previous month, the index for ‘Chemicals & Chemical Products’ group rose by 0.1% to 151.2 (provisional) from 151.1 (provisional) for the previous month, the index for ‘Non-Metallic Mineral Products’ group rose by 0.5% to 179.5 (provisional) from 178.6 (provisional) for the previous month, while the index for ‘Leather & Leather Products’ group declined by 0.1% to 146.1 (provisional) from 146.3 (provisional) for the previous month and the index for ‘Basic Metals, Alloys & Metal Products’ group declined by 0.7% to 151.9 (provisional) from 153.0 (provisional) for the previous month.

The CNX Nifty ended at 8739.20, up by 23.60 points or 0.27% after trading in a range of 8688.90 and 8739.85. There were 31 stocks advancing against 20 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 4.05%, Bank of Baroda up by 4.02%, Tata Motors - DVR up by 2.88%, Adani Ports & Special Economic Zone up by 2.77% and Ultratech Cement up by 2.56%. (Provisional)

On the flip side, Bosch down by 2.02%, Coal India down by 1.65%, ONGC down by 1.16%, TCS down by 1.15% and Sun Pharma down by 0.93% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 38.07 points or 0.57% to 6,703.70, Germany’s DAX increased 39.39 points or 0.38% to 10,425.99 and France’s CAC increased 1.1 points or 0.03% to 4,388.28.

Asian markets made a negative close on Wednesday, with some of the indices in the region extending the longest selloff since June, following the overnight decline in US markets on doubts over central banks' willingness or ability to boost growth through ultra-easy monetary policies. Slight gain in crude too was unable to give any support to the markets. Crude oil rose 0.5 percent to $45.11 a barrel in New York following a 3 percent plunge in the last session. Japanese market was dragged down by banks on a report that the Bank of Japan plans to make its controversial negative interest rate policy the centerpiece of future monetary easing. However, Australian shares rose modestly as gains among financials outweighed declines in the mining and energy sectors. South Korean markets were closed for a national holiday.