Markets continue to trade marginally in red

The Indian markets continued to trade marginally in red with sustained selling pressure on some front line stocks in the late afternoon session, as investors indulged in cutting down their bets on disappointing macroeconomic data. The index of industrial production (IIP) contracted by 2.4% in July, registering the worst performance in eight months mainly on account of declining output in manufacturing and capital goods sectors. Meanwhile, Retail inflation eased to a five-month low to 5.05% in August. Investor also took note of India's wholesale prices rose at a slower-than-expected pace in August to gaining 3.74% compared with 3.55% in July on smaller rises in food prices. However losses remained capped, India Ratings and Research stating that the sharp fall in retail inflation in August has increased the chances of monetary easing by the central bank.

On global front, European stocks open slightly higher on Wednesday after four consecutive sessions of losses amid the oil price downturn and rising bond yields on doubts over the ability of central banks to boost economic growth.

Back home, in scrip specific developments, CESC rises after the company posted its net profit rose 0.6% in June quarter to Rs.174 crore against Rs.173 crore a year ago. Total income rose 11.3% to Rs.1,938 crore. Reliance Capital surged as much as 5 per cent to hit intraday high of Rs 560 after the company announced its plans to list its housing finance business on the stock markets.

The BSE Sensex is currently trading at 28344.45, down by 9.09 points or 0.03% after trading in a range of 28259.38 and 28416.41. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.90%, while Small cap index was up by 1.03%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.64%, Bankex up by 0.53%, PSU up by 0.51%, Power up by 0.50% and Oil & Gas up by 0.37%, while IT down by 0.33%, TECK down by 0.14% and Metal down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.96%, Hero MotoCorp up by 1.88%, NTPC up by 1.73%, SBI up by 1.54% and Asian Paints up by 1.31%. On the flip side, Coal India down by 2.01%, TCS down by 1.63%, Tata Motors down by 1.14%, Sun Pharma down by 0.98% and Hindustan Unilever down by 0.91% were the top losers.

Meanwhile, the retail inflation eased to a five-month low of 5.05% in August, raising the expectations of a cut in interest rates. The India Ratings and Research (Ind-Ra) echoing the view has said that sharp fall in retail inflation in August has revived hopes for a rate cut when the Reserve Bank of India (RBI) meets early next month to review monetary policy.

Rating agency has said that the sharp fall in retail inflation in August 2016 has increased the rate cut proposition in the next quarter itself, making the central bank’s target of bringing retail price inflation down to 5 per cent by March 2017 achievable. Though it believes scope for RBI action on rate front appears skewed towards December policy review than October 2016

Pointing to the contraction of 2.4 per cent in July 2016 as against a growth of 2.0 per cent in June Index of Industrial Production (IIP), Ind-Ra has said that that industrial growth will not return to a sustained and high growth path as long as excess capacity in the manufacturing sector remains and private sector investment cycle does not revive.

It further stated that the RBI would have better clarity on the retail inflation trajectory for the last quarter of the fiscal, US electoral outcomes and Federal Reserve rate trajectory by December 2016. It also noted that the maturity of large FCNR-B (foreign currency non-resident) deposits worth $26 billion, which are coming due in the next two months, is likely to be the litmus test for the rupee as well as the RBI. 

The CNX Nifty is currently trading at 8723.70, up by 8.10 points or 0.09% after trading in a range of 8688.90 and 8737.60. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 3.74%, Yes Bank up by 2.90%, ACC up by 2.26%, NTPC up by 2.09% and Ultratech Cement up by 2.04%. On the flip side, Coal India down by 1.95%, TCS down by 1.67%, Bosch down by 1.22%, Sun Pharma down by 1.05% and Eicher Motors down by 1.04% were the top losers.

Asian market were trading in red; Nikkei 225 decreased 114.8 points or 0.69% to 16,614.24, Jakarta Composite declined 72.75 points or 1.39% to 5,142.81, Taiwan Weighted dropped 38.53 points or 0.43% to 8,902.30, Hang Seng was down by 25.12 points or 0.11% to 23,190.64, Shanghai Composite slumped 20.66 points or 0.68% to 3,002.85 and FTSE Bursa Malaysia KLCI decreased 17.24 points or 1.03% to 1,659.94. On flip side, KOSPI Index increased 7.88 points or 0.4% to 1,999.36.

European markets were trading in green; France’s CAC increased 3.3 points or 0.08% to 4,390.48, UK’s FTSE 100 was up by 17.87 points or 0.27% to 6,683.50 and Germany’s DAX increased 19.88 points or 0.19% to 10,406.48.