Benchmarks make cautious start ahead of Q4GDP numbers

Indian equity benchmarks have made a cautious start on Wednesday, as traders remained on sidelines ahead of the fourth quarter gross domestic product (GDP) numbers to be released post market hours. Meanwhile, India’s former chief statistician Pronab Sen has said that the country’s GDP for 2016-17 will get 50 basis points (bps) push to 7.6 percent from the government’s estimate of 7.1 percent, due to the recent revision of the base year of the Wholesale Price Index (WPI) and the Index of Industrial Production (IIP). Some support came with report that Southwest monsoon arriving in Kerala on the expected date this year and also advancing into some parts of the Northeast India.

On the global front, Asian markets turned lower as traders opted to book initial profits at higher levels. However, Chinese markets edged higher after country’s manufacturing data exceeded estimates. The US markets snapped their long winning streak in the last session, after data showed US consumer confidence unexpectedly fell in May.

 Back home, Prime Minister Narendra Modi while speaking at the Indo-German Business Summit in Berlin has said that India has one of the most liberal FDI policy regimes in the world and more than 90 percent of foreign investment flows are under automatic route. Aviation stocks remained buzzing with Civil Aviation Ashok Gajapathi Raju stating that average airfares dropped 18 percent in 2016 and additional capacities can further bring down the fares. Meanwhile, the market breadth indicating the overall health of the market was strong, with 1,274 shares gaining and 721 shares declining, while a total of 79 shares were unchanged.

The BSE Sensex is currently trading at 31166.74, up by 7.34 points or 0.02% after trading in a range of 31107.48 and 31233.68. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.82%, while Small cap index was up by 0.83%.

The top gaining sectoral indices on the BSE were Realty up by 1.52%, Consumer Durables up by 1.02%, Auto up by 0.99%, Utilities up by 0.98% and Consumer Disc up by 0.96%, while IT down by 0.70%, TECK down by 0.51%, Metal down by 0.39% and FMCG down by 0.13% were the few losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.08%, Power Grid up by 2.48%, Lupin up by 1.90%, GAIL India up by 1.60% and Maruti Suzuki up by 1.15%. On the flip side, ONGC down by 1.18%, Infosys down by 1.03%, TCS down by 0.86%, Adani Ports down by 0.65% and ITC down by 0.45% were the top losers.

Meanwhile, ahead of the release of the fourth quarter GDP numbers, India’s former chief statistician Pronab Sen has said that with the recent revision of the base year of the Wholesale Price Index (WPI) and the Index of Industrial Production (IIP) to 2011-12 from 2004-05, the country’s gross domestic product (GDP) for fiscal year 2016-17 will get a 40-50 basis points (bps) push to 7.6 percent against the Central Statistics Office (CSO) prediction of 7.1 percent.

Sen, who is currently the country director at the International Growth Centre, said that since WPI is used for converting the current price series of GDP to constant price, the growth rate is going to step up further. There is a chance that GDP may get revised upwards on the basis of IIP also, as it is used to calculate the non-corporate sector GDP. So, there will be some effect there as well. He also said that the problem lies in the fact that the maximum brunt of demonetisation was felt by the unorganised sector and there is no assessment available on it.

He noted that the government should come out with the revised GDP figures for all the years post 2011-12 as the change in base year of the key macroeconomic indicators will push up all the growth figures of the country. He also pointed out that the revision in the base year of the key macroeconomic indicators was ‘unusually delayed this time’ and should have been done by the end of 2015-16. Despite the push on account of revision of base year, he said that it was unlikely that India will see an eight percent growth in the current fiscal as it lacked a sustainable export growth and the global economy was still not performing well.

The CNX Nifty is currently trading at 9627.90, up by 3.35 points or 0.03% after trading in a range of 9610.80 and 9638.70. There were 26 stocks advancing against 24 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Mahindra & Mahindra up by 4.10%, Ultratech Cement up by 3.01%, Power Grid up by 2.40%, Indian Oil Corporation up by 2.31% and Lupin up by 1.89%. On the flip side, ONGC down by 1.51%, Vedanta down by 1.35%, Bharti Infratel down by 1.13%, ITC down by 1.08% and Aurobindo Pharma down by 1.02% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 59.24 points or 0.59% to 10,042.71, Nikkei 225 shed 58.56 points or 0.3% to 19,619.29, Hang Seng slipped 21.04 points or 0.08% to 25,680.59 and FTSE Bursa Malaysia KLCI was down by 0.54 points or 0.03% to 1,764.80.

On the flip side, KOSPI Index increased 0.85 points or 0.04% to 2,344.53, Shanghai Composite gained 2.05 points or 0.07% to 3,112.11 and Jakarta Composite was down by 13.5 points or 0.24% to 5,706.90.