Benchmarks continue firm trade in noon session

Indian benchmark indices continued to trade firm in noon session as funds and retail investors made fresh buying on positive inflation data, with the hope that earnings momentum by blue-chips will keep up foreign capital inflows. Consumer Price Index (CPI)-based inflation eased to 2.99% in April, from 3.89% in March, due to lower cost of food items. Also, the inflation based on the wholesale price index (WPI) slipped to a four-month low of 3.85% in April as both food articles and manufactured items showed cooling in prices. The street shrugged off industrial output growth data which slipped to 2.7% in March compared to 5.5% in March 2016, mainly on account of poor performance of manufacturing sector.

Adding the optimism among investors, the private report indicated that trustees of retirement fund body EPFO are likely to raise the investment limit in exchange traded funds (ETFs) to 15% of the investible deposits, from 10% at present, in the current fiscal. The higher limit would help the Employees’ Provident Fund Organisation’s (EPFO) park around Rs 15,000 crore in stock markets in 2017-18 as its investible deposits are close to Rs 1 lakh crore annually. Some support also came with the report Private equity investments saw a significant upturn in April with deals worth $ 3.16 billion, up 69 per cent from a year ago, due to big ticket transactions. From a 32-month low recorded in February this year, the deal tally in April represents a significant bounce back both in terms of number of deals as well as value. According to the report, there were 86 PE deals worth $ 3.16 billion in last month, while 63 such transactions worth $ 1.87 billion were announced in April last year.

On the global front, Asian markets were trading mixed on Monday, as a ransomware attack that locked up more than 200,000 computers in over 150 countries and a missile test by North Korea on Sunday kept investors on edge. Safe-haven assets including the yen, gold and US Treasuries held their gains from Friday after weaker-than-expected economic data from the US dented risk appetite. Furthermore, Oil prices jumped after Saudi Arabia's energy minister and Russia's oil minister said at a joint briefing in Beijing that they agreed output cuts should be extended to March 2018.

Back home, stocks from Metal, Basic Materials and Banking counters were supporting the markets’ uptrend, while some cautiousness was seen in Telecom, Consumer Durables and IT counters. In scrip specific development, Karnataka Bank surged after the bank reported a 29.57% rise in its net profit at Rs 138.37 crore for the quarter ended March 31, 2017 as compared to Rs 106.79 crore for the same quarter in the previous year. Furthermore, GMR Infrastructure gained after the company entered into pacts for divesting stakes in its Indonesian coal mining entities. Two of its subsidiaries -- GMR Energy Netherlands BV and GMR Infrastructure Overseas -- have entered into conditional share purchase agreement with PT Golden Energy Mines Tbk, Indonesia.

The market breadth remained optimistic, as there were 1492 shares on the gaining side against 954 shares on the losing side, while 119 shares remained unchanged.

The BSE Sensex is currently trading at 30323.89, up by 135.74 points or 0.45% after trading in a range of 30273.62 and 30357.96. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.15%, while Small cap index gained 0.84%.

The top gaining sectoral indices on the BSE were Metal up by 1.94%, Basic Materials up by 1.63%, Bankex up by 1.04%, Healthcare up by 1.01% and PSU up by 0.90%, while Telecom down by 1.05%, Consumer Durables down by 0.97%, IT down by 0.66% and TECK down by 0.64% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.80%, Dr. Reddys Lab up by 2.45%, ICICI Bank up by 1.84%, ITC up by 1.53% and Lupin up by 1.52%. On the flip side, Infosys down by 1.29%, TCS down by 0.85%, Wipro down by 0.59%, Cipla down by 0.34% and Reliance Industries down by 0.29% were the top losers.

Meanwhile, after surging to nearly five-month high of 3.89 percent in March, India’s retail price inflation witnessed a sharp decline of 2.99 percent in the month of April to its lowest in at least five years, due to lower cost of food items, including pulses and vegetables that showed a deflationary trend. The consumer price index (CPI) inflation stood at 5.47 percent in April 2016. The CPI based retail inflation for March 2017 was revised slightly upwards to 3.89 percent, from 3.81 percent recorded previously.

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 April 2017, stood at 3.02 percent, 3.03 percent and 2.99 percent respectively compared to 6.17 percent 4.68 percent 5.47 percent respectively in April 2016. The index value for CPI (General) for Rural was 132.9, for Urban was 129.1 and for combined stood at 131.1 for the month of April.

The data also showed that Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for April 2017 dropped to 0.69 percent 0.46 percent and 0.61 percent respectively compared to 1.85 percent, 2.42 percent, 2.01 percent respectively in March 2017 and 6.66 percent 5.97 percent and 6.40 percent in April 2016.

As per the data, Pulses and products recorded a sharp fall in prices in April, with a deflation of 15.94 percent against (-) 12.42 percent in March, while vegetable prices fell by 8.59 percent against (-) 7.24 percent in March. In the fuel and light category, the inflation reading in April stood at 6.13 percent, higher than 5.56 percent in March. Further, Price of fruits grew at 3.78 percent in April, slower than 9.35 percent in March. For cereals and products, the rate of price rise in April, at 5.06 percent, was lower than 5.38 percent in the previous month. For meat and fish, the inflation print came in at 1.90 percent during the reported month, from 2.96 percent in March.

The CNX Nifty is currently trading at 9444.85, up by 43.95 points or 0.47% after trading in a range of 9423.10 and 9445.90. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.03%, Tata Steel up by 2.86%, Dr. Reddys Lab up by 2.64%, Kotak Mahindra Bank up by 2.24% and Grasim Industries up by 1.84%. On the flip side, Infosys down by 1.37%, Bharti Infratel down by 1.25%, Aurobindo Pharma down by 0.95%, Adani Ports &Special down by 0.88% and TCS down by 0.77% were the top losers.

Asian markets were trading mixed; KOSPI Index rose 0.17%, Shanghai Composite gained 0.32%, Taiwan Weighted increased 0.5% and Hang Seng was up by 0.56%. On the flip side, Nikkei 225 decreased 0.11%, Jakarta Composite dropped 0.28% and FTSE Bursa Malaysia KLCI was down by 0.12%.