Indian benchmarks end a lackadaisical session with modest cut

It turned out to be a lackadaisical performance from the Indian equity indices on Friday as they failed to snap the session in the positive territory and settled marginally below the neutral line. Marketmen looked to consolidate their position in the session after rocketing around two percent in the week gone by and they largely indulged in stock specific activities amid a weak global trend. Sentiments remained dismal with the private report indicating that India’s GDP growth numbers are expected to see a decline of 2% in the third and fourth quarters of the current fiscal, as effective currency in circulation has contracted significantly. The report stated that the government’s decision to abolish old stock of high denomination currency (demonetization) and issue new notes (remonetisation) could have a mixed impact on the macro economy over a year. Besides, depreciation in rupee value also weighed on the sentiment. However, losses remained capped with report that the Index of Industrial Production (IIP) rose to a 13-month high of 5.7% in November, belying expectations of an adverse impact from demonetization and against a contraction of 1.8% in October. Also, the Inflation measured by the Consumer Price Index (CPI) eased to 3.41% in December versus 3.63% seen in November 2016, mainly due to softening of food prices. Some support also came with the report saying that India grew fastest among major economies worldwide at over 7.5 per cent in 2016 and will continue to drive global growth in 2017 with its share in the world GDP expected to rise to 17 per cent.

On the global front, Asian markets ended mostly lower on Friday as investors weighed whether President-elect Donald Trump would stress growth-boosting steps when he takes office. The US markets closed modestly in red but were well off the days’ low. Sentiments took a hit on the report that Chinese exports sank 6.1 percent in December from a year earlier. However, oil extended overnight gains and the dollar edged up from a five-week low versus the yen, helping limit overall losses in the region. Meanwhile, European stocks edged higher, with health care stocks recovering from remarks made earlier this week by US President-elect Donald Trump that pharmaceuticals were getting away with murder.

Back home, after getting a positive start, the local benchmarks dropped into the red terrain sooner than later, tracking weak trade in other regional markets. Thereafter, the indices moved only sideways but touched intraday lows in the late afternoon session as sudden bouts of profit booking emerged in the local markets. However, the frontline gauges managed to pare the losses and settled in close proximity with previous closing levels. Eventually the NSE’s 50-share broadly followed index Nifty, settled with single digit loss and ended near the crucial 8,400 support level, while Bombay Stock Exchange’s Sensitive Index Sensex subtracted merely nine points and closed above the psychological 27,200 mark. On the BSE sectoral space, IT and Teck pockets remained among top laggards in the space as they got lacerated by around two percent, while sectors like Auto, Power and Consumer Durables too got pounded heavily in the session. On the flipside, FMCG, Banking and Oil & Gas pockets managed to go home with moderate gains. The market breadth remained pessimistic as there were 1237 shares on the gaining side against 1486 shares on the losing side, while 183 shares remained unchanged.

Finally, the BSE Sensex declined 9.10 points or 0.03% to 27238.06, while the CNX Nifty was down by 6.85 points or 0.08% to 8,400.35. 

The BSE Sensex touched a high and a low of 27459.75 and 27143.07, respectively and there were 14 stocks on gainers side against 16 stocks on the losers side on the index.

The broader indices made mixed closing; the BSE Mid cap index ended lower 0.03%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were FMCG up by 1.21%, Bankex up by 0.32% and Oil & Gas up by 0.15%, while IT down by 1.89%, TECK down by 1.72%, Auto down by 0.77%, Power down by 0.52% and Consumer Durables down by 0.51% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.90%, GAIL India up by 2.30%, ITC up by 2.13%, HDFC up by 1.97% and Sun Pharma up by 1.14%. On the flip side, TCS down by 3.90%, Infosys down by 2.49%, NTPC down by 1.55%, Maruti Suzuki down by 1.46% and Hero MotoCorp down by 1.14% were the top losers.

Meanwhile, in a positive surprise the industrial production growth accelerated to 13-month high of 5.7 percent in November 2016 against a contraction of 1.8% from provisional estimates last month. The major boost to the numbers came from better performance of manufacturing, mining and electricity sectors coupled with larger offtake of capital goods, considered a barometer of investment. Following demonetisation of Rs 1,000 and Rs 500 notes announced on November 8, 2016, it was feared that cash crunch will hit all sectors but lower base effect led the increase in industrial output growth for the month.

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 September 2016, stood at 175.8, which is 5.7 percent higher as compared to the level in the month of November 2015. The cumulative growth for the period April-November 2016 over the corresponding period of the previous year stands at 0.4 percent.

On the sectoral basis, growth of manufacturing index grew by 5.5 percent in November, 2016. During April-November period, manufacturing sector contracted by 0.3 percent. The electricity sector growth was at 8.9 percent in November, the cumulative growth for the sector during Apr-Nov 2016 was at 5 percent. Mining sector growth was at 3.9 percent in the November 2016 as compared to the same month last year and the cumulative growth for the sector during Apr-Nov 2016 growth was at 0.3 percent. The Indices of Industrial Production for the Manufacturing, Electricity and Mining sectors for the month of November 2016 stood at 186.0, 189.2 and 123.8 respectively.

In terms of industries, 16 out of the 22 industry groups in the manufacturing sector have shown positive growth during the month of November 2016 as compared to the corresponding month of the previous year. As per Use-based classification, the growth rates in November 2016 over November 2015 are 4.7 percent in Basic goods, 15.0 percent in Capital goods and 2.7 percent in Intermediate goods.  The Consumer durables and Consumer non-durables have recorded growth of 9.8 percent and 2.9 percent respectively, with the overall growth in Consumer goods being 5.6 percent.

Further, the industry group ‘Radio, TV and communication equipment & apparatus’ has shown the highest positive growth of 32.2 percent followed by 23.2 percent in ‘Electrical machinery & apparatus n.e.c.’ as well as in ‘Motor vehicles, trailers and semi-trailers’. On the other hand, ‘Furniture; manufacturing n.e.c.’ has shown the highest negative growth of (-) 16.5 percent followed by (-) 5.2 percent in ‘Office, accounting and computing machinery’ and (-) 3.2 percent in ‘Tobacco products’.

The CNX Nifty traded in a range of 8,461.05 and 8,373.15. There were 18 stocks in green against 33 stocks in red on the index.

The top gainers on Nifty were Axis Bank up by 3.69%, ITC up by 2.23%, HDFC up by 2.04%, GAIL India up by 2.01% and Tech Mahindra up by 1.45%. On the flip side, Idea Cellular down by 4.57%, TCS down by 4.02%, Hindalco down by 2.77%, Infosys down by 2.74% and NTPC down by 1.58% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 27.51 points or 0.38% to 7,319.88, Germany’s DAX increased 53.09 points or 0.46% to 11,574.13 and France’s CAC increased 24.83 points or 0.51% to 4,888.80.

Asian equity markets ended mostly in red on Friday, with Chinese shares ended lower following trade data out of China that disappointed on exports. Reports from the General Administration of Customs showed that China's exports fell an annual 6.1 percent in December, exceeding forecast for a decrease of 4.0 percent. Imports grew 3.1 percent annually in the month, just above the expectations of 3.0 percent climb. Sentiments dampened further tracking weak cues from Wall Street where stocks declined overnight after President-elect Donald Trump failed to provide details on fiscal policies that were expected to bolster the economy. However, oil extended overnight gains and the dollar edged up from a five-week low versus the yen, helping limit overall losses in the region.