Benchmarks make sluggish start on weak Q4 GDP data

Indian equity benchmarks have made a sluggish start and are trading slightly in red in early deals on Thursday, as traders reacted negatively on weak economic data. Sentiments remained downbeat with India losing the tag of the world’s fastest growing major economy to China with a gross domestic product growth of 6.1 per cent in the three months through March from a year earlier, also slowing from a provisional 7 per cent in the previous quarter. Growth for the year ending in March came in at 7.1 percent, in line with the official estimate. Sentiments also remained dampened after the growth of eight core sectors declined to 2.5 per cent in April, dragged down by lower coal, crude oil and cement production. Core sector growth was 8.7 per cent in April last year. However, some solace came with the government achieving the fiscal deficit target of 3.5 percent of GDP in 2016-17. As per Controller General of Accounts (CGA) data fiscal deficit was 3.51 percent of GDP or Rs 5.35 lakh crore in 2016-17.

On the global front, Asian markets were exhibiting mixed trend at this point of time, as investors weighed economic data. The Japanese market was though surging close to a percent as the country’s capital spending topped estimates. The US markets ended weak once again in last session, on reports that President Donald Trump has decided to withdraw from the Paris climate accord.

Back home, Oil marketing companies edged lower despite hiking petrol and diesel prices on Wednesday. While Petrol price was increased by Rs. 1.23, the diesel price was hiked by Rs. 0.89. However, traders opted to buy auto stocks ahead of announcing their monthly sales numbers. The market breadth indicating the overall health of the market was strong, with 1,169 shares gaining and 734 shares declining, while a total of 99 shares were unchanged.

The BSE Sensex is currently trading at 31137.31, down by 8.49 points or 0.03% after trading in a range of 31070.47 and 31186.13. 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 0.31%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.24%, FMCG up by 0.95%, Realty up by 0.63%, Consumer Disc up by 0.57% and Auto up by 0.54%, while Metal down by 0.97%, Oil & Gas down by 0.90%, Energy down by 0.58%, Bankex down by 0.44% and IT down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.31%, Hindustan Unilever up by 2.22%, Cipla up by 1.92%, Lupin up by 1.92% and Dr. Reddy’s Lab up by 1.42%. On the flip side, Infosys down by 1.66%, GAIL India down by 1.54%, Asian Paints down by 1.47%, Tata Steel down by 1.32% and ICICI Bank down by 1.30% were the top losers.

Meanwhile, losing the tag of the world’s fastest growing major economy to China and showing signs of deceleration, India’s economy grew by 7.1% in the fiscal year 2016-17, in line with the official estimate, slowing from 8% in 2015-16, while for the fourth quarter of FY17, gross domestic product (GDP) slowed sharply to 6.1%, down from 7% in the previous quarter.

As per Central Statistics Office (CSO) data, real GDP at constant (2011-12) prices for the year 2016-17 is estimated at Rs 121.90 lakh crore, showing a growth rate of 7.1% over the year 2015-16 of Rs 113.81 lakh crore. In terms of gross value added (GVA), which excludes indirect taxes, the growth came in even lower at 6.6% over the GVA for 2015-16.

Almost all sectors, with the exception of agriculture, showed deceleration in the aftermath of demonetisation. Thanks to good monsoon, the agricultural sector posted a huge jump in growth as it expanded by 4.9% during 2016-17 compared to dismal growth of 0.7% in the previous year. Manufacturing sector growth for FY17 slowed down to 7.9% from 10.8% in FY16 and mining & quarrying sector fell sharply to 1.8% from 10.5% in previous year. The data further said the per capita income during 2016- 17 is estimated to have attained a level of Rs 1,03,219 as compared to the estimates for the year 2015-16 of Rs 94,130 showing a rise of 9.7 per cent.

In the fourth quarter itself, the agriculture sector GVA rose by 5.2% as compared to 1.5% in the same period of 2015-16. The manufacturing sector output in the fourth quarter slowed to 5.3% versus 12.7% in the same period of last year, the construction sector slipped into the negative territory. Mining & quarrying sector output dropped to 6.4% in the Q4FY17 as against 10.5% in the Q4FY16.

GDP at current prices in the year 2016-17 is estimated at 84 lakh crore, showing a growth rate of 11.0 percent over the estimates of GDP for the year 2015-16 of 136.82 lakh crore. Besides, Private Final Consumption Expenditure (PFCE) at current prices is estimated at 89.27 lakh crore in 2016-17 as against 79.32 lakh crore in 2015-16. Government Final Consumption Expenditure (GFCE) at current prices is estimated at 69 lakh crore in 2016-17 as against 14.11 lakh crore in 2015-16. Gross Fixed Capital Formation (GFCF) at current prices is estimated at 41.18 lakh crore in 2016-17 as against 40.03 lakh crore in 2015-16.

The CNX Nifty is currently trading at 9615.15, down by 6.10 points or 0.06% after trading in a range of 9598.45 and 9630.75. There were 26 stocks advancing against 24 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Aurobindo Pharma up by 4.67%, Sun Pharma up by 3.02%, Bharti Infratel up by 2.26%, Hindustan Unilever up by 2.07% and Lupin up by 1.77%. On the flip side, Hindalco down by 1.87%, Infosys down by 1.68%, Indiabulls Housing down by 1.56%, ONGC down by 1.41% and ICICI Bank down by 1.36% were the top losers.

Asian markets were trading mixed; Taiwan Weighted increased 31.79 points or 0.32% to 10,072.51, Hang Seng added 88.69 points or 0.35% to 25,749.34 and Nikkei 225 was up by 200.29 points or 1.02% to 19,850.86.

On the flip side, Shanghai Composite decreased 15.81 points or 0.51% to 3,101.37, KOSPI Index slipped 3.21 points or 0.14% to 2,344.17 and FTSE Bursa Malaysia KLCI was down by 2 points or 0.11% to 1,763.87.