Benchmarks make soft start post weak economic data

Indian equity benchmarks have made a soft start and are trading slightly in red in early deals on Thursday with frontline gauges breaching their crucial 29,600 (Sensex) and 9,200 (Nifty) levels, as traders reacted negatively to the economic data announced after the market hours yesterday. In a double whammy, India’s industrial production contracted by 1.2 percent in February due to poor performance manufacturing sector, while retail inflation jumped to a five-month high of 3.81 percent in March on costlier protein items, edible oils and non-food products like fuel and light. Meanwhile, IT major Infosys declared its March quarter result which was in line with the street expectations but the revision of FY18 guidance for the fourth time to 6.5-8.5% in constant currency terms and muted outlook kept the momentum tepid.

On the global front, Asian markets were trading mixed at this point of time after the dollar slumped and Treasury bond yields dropped to the lowest level this year in reaction to President Donald Trump’s comments that the greenback was getting too strong and that he won’t brand China a currency manipulator. The US markets made another soft closing in the last session. Stocks remained mostly negative throughout the trading day amid lingering geopolitical concerns.

Back home, foreign portfolio investors (FPIs) bought shares worth a net Rs 580.70 crore, while Domestic institutional investors (DIIs) also bought shares worth a net Rs 701.12 crore, on April 12, 2017. The market breadth indicating the overall health of the market was strong, with 1,276 shares gaining and 811 shares declining, while a total of 69 shares were unchanged.

The BSE Sensex is currently trading at 29593.96, down by 49.52 points or 0.17% after trading in a range of 29549.88 and 29660.48. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.14%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Realty up by 1.10%, PSU up by 0.50%, Bankex up by 0.46%, Energy up by 0.43% and Oil & Gas was up by 0.42%, while Metal down by 1.73%, IT down by 1.65%, TECK down by 1.35%, Basic Materials down by 0.72% and Capital Goods was down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 0.97%, GAIL India up by 0.95%, ICICI Bank up by 0.93%, Axis Bank up by 0.85% and SBI was up by 0.81%. On the flip side, Infosys down by 2.12%, TCS down by 1.97%, Tata Steel down by 1.66%, Wipro down by 1.18% and Adani Ports was down by 1.02% were the top losers.

Meanwhile, coming as a bit of disappointment, the India’s industrial production growth contracted by 1.2% to a four-month low in February 2017, as compared to 1.99% in February 2016 and 2.74% in January 2017, mainly on account of sharp 2% decline in the manufacturing sector and lower off-take of capital as well as consumer goods. The previous low was recorded in October when the IIP contracted by 1.87%. Thereafter, it shot up to 5.59% in November. The index of industrial production (IIP) for the month of February 2017 stood at 182.3. For the eleven-month period to February of the last financial year, IIP growth was nearly flat at 0.4% as against 2.6% a year ago. Meanwhile, for January, the Central Statistics Office has revised the IIP growth rate to 3.27% from 2.74% in the provisional data released last month.

According to the data released by the Ministry of Statistics and Programme Implementation, Central Statistics Office (CSO) IIP, with base 2004-05 for the month of February 2017, the Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of February 2017 stood at 140.6, 190.1 and 182.5 respectively, with the corresponding growth rates of 3.3%, (-) 2.0% and 0.3% as compared to February 2016. The cumulative growth in these three sectors during April-February 2016-17 over the corresponding period of 2015-16 were 1.6%, (-) 0.3% and 4.6% respectively.

The capital goods output declined by 3.4% in February over a contraction of 9.3% last year. Similarly, the overall consumer goods production declined by 5.6% in the month compared to a growth of 0.6%. The non-durable consumer goods output shrank by 8.6% in the month over a contraction of 4.9% year ago. In the consumer durables segment, the output dipped by 0.9% in February against a growth of 10.4% in same month last year.

In terms of industries, 15 out of the 22 industry groups in the manufacturing sector showed negative growth during the month of February 2017, as compared to the corresponding month of the previous year. The industry group ‘Tobacco products’ has shown the highest negative growth of (-) 42.8% followed by (-) 21.7% in ‘Food products and beverages’ and (-) 20.6% in ‘Office, accounting and computing machinery’. On the other hand, the industry group ‘Electrical machinery & apparatus n.e.c.’ has shown the highest positive growth of 17.4% followed by 10.7% in ‘Wearing apparel; dressing and dyeing of fur’ and 9.9% in ‘Basic metals’.

The CNX Nifty is currently trading at 9186.50, down by 16.95 points or 0.18% after trading in a range of 9169.80 and 9202.65. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 1.97%, Indiabulls Housing up by 1.30%, GAIL India up by 0.98%, ICICI Bank up by 0.89% and Indian Oil Corporation was up by 0.86%. On the flip side, Hindalco down by 3.29%, Infosys down by 2.17%, TCS down by 1.98%, Tata Steel down by 1.45% and Adani Ports was down by 1.30% were the top losers.

Asian markets were trading mixed; Jakarta Composite rose 3.22 points or 0.06% to 5,647.37, Shanghai Composite increased 4.05 points or 0.12% to 3,277.88, KOSPI Index gained 9.19 points or 0.43% to 2,138.10 and Taiwan Weighted was up by 26.92 points or 0.27% to 9,844.60.

On the flip side, Nikkei 225 declined 187.34 points or 1.01% to 18,365.27, Hang Seng slipped 16.65 points or 0.07% to 24,296.85 and FTSE Bursa Malaysia KLCI was down by 5.76 points or 0.33% to 1,738.32.