Weak trade prevails in late morning session

Indian equity benchmarks continued their weak trade in late morning session on account of selling in frontline blue chip counters. A weak trend in other Asian markets in line with sell-off in the US on continued geopolitical tensions and comments by President Donald Trump expressing concern about a strong greenback also dented the domestic sentiments. Investors also indulged in cutting down their bets on disappointing macroeconomic data. Industrial growth contracted unexpectedly in February while consumer inflation quickened to a five-month high in March, a double setback for the Indian economy as it enters the new financial year. Industrial production shrank by 1.2% in February against a 3.3% rise in January. However, consumer inflation accelerated to 3.81% in March largely due to increased fuel prices. The Reserve Bank of India last week kept interest rates unchanged citing inflation risks. Some selling also crept in after a private report highlighted that even as the Central finances have improved over the years, the average fiscal deficit for the states has widened to over 3% of the gross state domestic product in fiscal 2017 and is likely to stay wide in 2017-18 as well. The Centre’s deficit has narrowed from 6.5% of the GDP in 2009-10 to 3.5% in 2016-17. It is projected at 3.2% in 2017-18.

Meanwhile, according to a survey, more than two-thirds of global investment professionals expect the geopolitical climate to affect investment returns over the next three to five years. And a full 70% of respondents expect these changes to negatively affect market performance. In the past nine months or so, the world has seen its share of upheaval, starting last June with the Brexit vote and continuing in November with the election of Donald Trump as president. Traders were seen piling position in Oil & Gas, Realty and Energy stocks, while selling was witnessed in Metal, IT and TECK sector stocks. In scrip specific development, Infosys was trading in red after the company reported weaker than expected constant currency guidance. The company reported weaker than expected constant currency guidance to 6.5-8.5% from 7.2-9.4% estimates.

On the global front, Asian shares were trading mostly in red, with Tokyo down on a strong yen and Shanghai gaining after solid trade figures. China’s imports soared by 31.1% in yuan terms, with exports up 14.8% for the first quarter from a year ago. China reported a trade surplus of CNY 454.94 billion in the period. South Korea’s central bank raised its growth outlook for this year and kept interest rates unchanged at a record low for a 10th straight month, while its governor shifted policy to a more hawkish stance. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 9,200 and 29,600 levels respectively. The market breadth on BSE was positive in the ratio of 1436:895, while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 29597.66, down by 45.82 points or 0.15% after trading in a range of 29549.88 and 29660.48. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.13%, while Small cap index was up by 0.56%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.88%, Realty up by 0.81%, Energy up by 0.74%, PSU up by 0.69% and Bankex up by 0.42%, while Metal down by 1.87%, IT down by 1.75%, TECK down by 1.51%, Basic Materials down by 0.78% and Telecom down by 0.52% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.32%, GAIL India up by 1.24%, Reliance Industries up by 1.13%, HDFC up by 0.86% and Bajaj Auto up by 0.75%.

On the flip side, Infosys down by 2.34%, TCS down by 2.19%, Adani Ports & Special Economic Zone down by 2.01%, Tata Steel down by 1.58% and Wipro down by 1.41% were the top losers.

Meanwhile, surging to a five-month high, India’s retail inflation for the month of Mach climbed to 3.81% in March 2017 from 4.83% in march 2016 and 3.65% in February 2017, on the back of costlier protein items, edible oils and non-food products like fuel and light. Though, it remained below the Reserve Bank of India’s forecast for an average of 5% inflation for financial year 2016-17.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the Consumer Price Index (CPI) (Rural, Urban, Combined) on Base 2012=100 for March 2017, stood at 3.75%, 3.88% and 3.81% respectively compared to 5.70%, 3.95% and 4.83% respectively in March 2016. The Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for March 2017 stood at 1.85%, 2.27% and 1.93% respectively in March 2017.

The data also showed that the General indices for the month of March 2017 for Rural, Urban and Combined at 132.8, 128.6 and 130.8 respectively. The CFPI for Rural, Urban and Combined for the same month were 132.2, 130.9 and 131.7 respectively.

According to the data, retail fuel inflation accelerated to 5.56% in March from 3.9% in the previous month even as food prices rose 1.93%, slower than the 2.01% increase in the previous month. Protein rich items such as milk & products and eggs were costlier during the month with inflation prints of 4.69% and 3.21% respectively. Prepared meals, snacks and sweets prices were also high, as prices grew by 5.65%. Further, vegetables continued to remain in the negative zone with deflation of (-) 7.24% and pulses declined by 12.42% in March 2017.

The CNX Nifty is currently trading at 9187.80, down by 15.65 points or 0.17% 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 2.99%, Indian Oil Corporation up by 2.04%, ICICI Bank up by 1.28%, GAIL India up by 1.22% and BPCL up by 1.21%.

On the flip side, Hindalco down by 3.06%, Infosys down by 2.30%, TCS down by 2.25%, Adani Ports & Special Economic Zone down by 1.97% and Tata Steel down by 1.52% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 205.35 points or 1.11% to 18,347.26, Hang Seng decreased 23.93 points or 0.1% to 24,289.57, Jakarta Composite decreased 6.16 points or 0.11% to 5,638.00 and FTSE Bursa Malaysia KLCI decreased 5.55 points or 0.32% to 1,738.53.

On the other hand, Shanghai Composite increased 6.13 points or 0.19% to 3,279.96, KOSPI Index increased 13.35 points or 0.63% to 2,142.26 and Taiwan Weighted increased 24.54 points or 0.25% to 9,842.22.