Indian benchmarks trade in tight range with negative bias

Indian bourses continued to trade in red in noon session as investors 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 1.2% in February against a 3.3% rise in January, while Consumer inflation accelerated to 3.81% in March largely due to increased fuel prices. The decline in Industrial production was broad-based with manufacturing contracting 2%, mining reporting a 3.3% rise in February and electricity generation stagnant at 0.3%. Besides, a weak trend in other regional markets coupled with sell-off in the US on continued geopolitical tensions and comments by President Donald Trump expressing concern about a strong greenback, also weighed on the sentiments. Adding the woes, the country’s second-largest software services company Infosys has posted lower-than-expected January-March earnings. Infosys has reported marginal rise of 0.17 percent in its consolidated net profit at Rs 3603 crore for the quarter ended March 31, 2017 as compared to Rs 3597 crore for the corresponding quarter in the FY16.. Total consolidated income of the company rose 3.14 percent at Rs 17866 crore for quarter under review as compared to Rs 17322 crore for the same quarter ended previous year.

On the global front, Asian markets were trading mixed on Thursday, following the weak cues overnight from Wall Street amid lingering geopolitical concerns. Japanese markets declined for a third day, though they pared the day’s worst losses as the yen erased an earlier gain, while Hong Kong stocks gained after China’s overseas shipments last month jumped the most in two years as global demand held up. Meanwhile, 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. Global equity markets are entering a key period, with earnings season ramping up against a backdrop of mounting geopolitical tensions around Syria and North Korea as well as elections in Europe.

Back home, stocks from Oil & Gas, Energy and PSU counters were supporting the markets’ uptrend, while those from Metal, IT and Basic Materials counters were adding to the underlying cautious undertone. In scrip specific development, IOL Chemicals & Pharmaceuticals shined after the company received EUGMP Certification from National Institute of Pharmacy and Nutrition, Hungary, for its product Ibuprofen, Lamotrigine, Metformin Hydrochloride confirming compliance with principals of Good Manufacturing Practices as provided by European Union Legislation. Furthermore, Richa Industries jumped after the company secured an order of Rs 35 crore from Delhi Metro Rail Corporation (DMRC) for constructing the Six Elevated Metro stations on Mukundpur-Shiv Vihar Corridor and Depot cum Workshop of Jahangirpuri-Badli Corridor Phase III of Delhi MRTS.

The market breadth remained optimistic, as there were 1517 shares on the gaining side against 1027 shares on the losing side, while 108 shares remained unchanged.

The BSE Sensex is currently trading at 29603.18, down by 40.30 points or 0.14% after trading in a range of 29549.88 and 29660.48. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index up by 0.65%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.85%, Energy up by 0.80%, PSU up by 0.65%, Realty up by 0.61% and Healthcare up by 0.48%, while Metal down by 1.70%, IT down by 1.50%, TECK down by 1.27%, Basic Materials down by 0.69% and Capital Goods down by 0.59%, were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.39%, Reliance Industries up by 1.13%, Power Grid up by 1.04%, Bajaj Auto up by 0.92% and HDFC up by 0.85%. On the flip side, Adani Ports & SEZ down by 2.14%, TCS down by 1.99%, Infosys down by 1.84%, Tata Steel down by 1.51% and Larsen & Toubro down by 1.15% 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 9189.05, down by 14.40 points or 0.16% after trading in a range of 9169.80 and 9202.65. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 2.93%, IOC up by 2.05%, Indiabulls Housing up by 1.85%, BPCL up by 1.48% and ICICI Bank up by 1.32%. On the flip side, Hindalco down by 3.11%, Adani Ports & SEZ down by 2.24%, Infosys down by 2.14%, TCS down by 2.07% and Bharti Infratel down by 1.92% were the top losers.

Asian markets were trading mixed; Hang Seng rose 0.23%, Shanghai Composite increased 0.04%, KOSPI Index gained 0.82% and Taiwan Weighted was up by 0.19%. On the flip side, Nikkei 225 declined 0.68%, Jakarta Composite slipped 0.06% and FTSE Bursa Malaysia KLCI was down by 0.32%.