Indian equity benchmarks kickoff the week on a sanguine note

Indian stock markets witnessed a fairly stable day of trade on Monday as sanguinity got reinforced after consumer inflation in April eased to its lowest in at least five years, reviving a debate on whether the central bank should cut interest rates. Hopes for further easing of inflation got a boost with the India Meteorological Department (IMD) stating that monsoon rains had reached the country's Andaman and Nicobar islands ahead of the schedule. Meanwhile, 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 market participants, 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 that 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 ended mostly higher on Monday as oil prices jumped and weak US data raised a question mark over the extent of Fed tightening. Yet another missile launch by North Korea too appeared to have little impact, while upbeat talk on trade and infrastructure investment at a top-level conference in China brightened sentiment. 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. However, Japanese shares closed marginally lower, pressured by a stronger yen, a widespread cyber attack and North Korea's missile test over the weekend. Meanwhile, European markets were trading mixed in early trade as a ransomware attack that locked up more than 200,000 computers in over 150 countries, kept investors on edge.

Back home, after getting a firm start, the local benchmarks protected their gains throughout the session and ended the first trading day of the week on optimistic note.   The NSE's 50-share broadly followed index Nifty, got buttressed by close to half a percent to settle above the crucial 9,400 support level, while Bombay Stock Exchange's Sensitive Index-Sensex accumulated over hundred points and closed above the psychological 30,300 mark. broader markets managed a touch better than the larger peers today as the BSE’s midcap and smallcap indices settled with gains of 1.25% and 0.78% respectively.  The market breadth remained optimistic, as there were 1483 shares on the gaining side against 1297 shares on the losing side, while 209 shares remained unchanged.

Finally, the BSE Sensex gained 133 points or 0.44% to 30322.12, while the CNX Nifty was up by 44.50 points or 0.47% to 9,445.40. 

The BSE Sensex touched a high and a low of 30357.96 and 30273.62, respectively and there were 32 stocks on gainers side as against 19 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 1.25%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Metal up by 2.40%, Basic Materials up by 1.62%, Healthcare up by 1.06%, Realty up by 0.94% and Utilities up by 0.85%, while Telecom down by 0.93%, TECK down by 0.46%, IT down by 0.41% and Consumer Durables down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.35%, Dr. Reddys Lab up by 3.54%, Lupin up by 2.40%, ICICI Bank up by 1.82% and Asian Paints up by 1.32%. On the flip side, Infosys down by 1.24%, Hero MotoCorp down by 0.90%, Reliance Industries down by 0.53%, Axis Bank down by 0.52% and Bharti Airtel 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 traded in a range of 9,449.25 and 9,423.10. There were 32 stocks in green as against 19 stocks in red on the index.

The top gainers on Nifty were Tata Steel up by 4.52%, Hindalco up by 4%, Dr. Reddys Lab up by 3.36%, Bosch up by 2.76% and Lupin up by 2.48%. On the flip side, Aurobindo Pharma down by 1.62%, Infosys down by 1.14%, Eicher Motors down by 0.90%, Bharti Infratel down by 0.72% and Hero MotoCorp down by 0.66% were the top losers.

The European markets were trading mostly in red; Germany’s DAX decreased 23.44 points or 0.18% to 12,746.97, France’s CAC decreased 14.01 points or 0.26% to 5,391.41, while UK’s FTSE 100 increased 9.52 points or 0.13% to 7,444.91.

Asian equity markets ended mostly in green on Monday as oil prices jumped and weak US data raised a question mark over the extent of Fed tightening. Meanwhile, investors took weak Chinese data, geopolitical worries and the WannaCry ransomware cyberattack in their stride. Chinese shares ended higher as concerns over regulatory tightening ebbed and upbeat talk on trade and infrastructure investment at a top-level conference in China helped investors shrug off disappointing macro data.  China's industrial production growth eased at a faster-than-expected pace in April, official data from the National Bureau of Statistics showed. Output climbed an annual 6.5 percent, slower than the 7.6 percent rise in March, while retail sales surged 10.7 percent in the month, just below the 10.9 percent spike in the prior month.  The country's fixed asset investment also grew at a slightly slower pace of 8.9 percent in April, but property investment growth accelerated to 9.3 percent in the first four months of 2017 from 9.1 percent in the first quarter. However, Japanese shares closed marginally lower, pressured by a stronger yen, a widespread cyber attack and North Korea's missile test over the weekend.