Benchmarks add strength to trade in green

Indian equity benchmarks erased losses, started trading in green in late morning session, on account of buying in front line blue chip counters. The rupee opened higher against dollar on Thursday on account of fresh selling of American currency by banks and exporters. Foreign portfolio investors sold shares worth Rs 171.77 crore on Wednesday with gross purchases and gross sales of Rs 3421.99 and Rs 3593.76 crore, respectively. Traders took support from the report that the Narendra Modi government’s decision to unveil the budget early seems to have paid off with spending having picked pace in the first month of the financial year itself. The government spent 11.3% of the budgeted expenditure in April, with capital expenditure topping the overall spending. Fiscal deficit in fiscal 2017 was 3.5% of GDP, in line with the budget projection, reflecting the government’s commitment to the process of fiscal consolidation. In fiscal 2016, the deficit was 3.9% of GDP. India’s per capita income grew by 9.7% to Rs 1,03,219 in 2016-17 from Rs 94,130 a year ago. In 2015-16, the rate of growth of the country’s per capita net income stood at 7.4%. In real terms (at 2011-12 prices), per capita income in 2016-17 rose 5.7% to Rs 82,269, against Rs 77,803 a year ago. Separately, Chief Economic Adviser Arvind Subramanian said that GDP growth is expected to further pick up by 0.75 per cent this fiscal on the back of policy support including macroeconomic measures. He said that demonetization had made a temporary impact on the economy but it should get better as remonetisation progresses.

The upsides was however capped on reports that 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. Separately, the growth of eight core sectors, which contribute 38% to the total industrial production, slowed down to a three month low of 2.5% in April 2017 as against 8.7% in April 2016, mainly due to lower coal, crude oil and cement productions. According to the data released by the ministry of Commerce and Industry, the combined Index of eight core industries coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity stood at 118.6 in April, 2017, which was 2.5% higher compared to the index of April, 2016. The Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, dropped to a three-month low of 51.6 in May from 52.5 in April. The upturn in the Indian manufacturing sector took a step back in May, with softer demand causing slower expansions in output and the amount of new work received by firms.

Traders were seen piling up position in Healthcare, FMCG and Consumer Discretionary stocks, while selling was witnessed in Oil & Gas, Energy and Metal stocks. In scrip specific development, Ramco Systems was trading in green after its consolidated net profit stood at Rs 8 crore during the March quarter against Rs 7 crore in the year-ago period. The Chennai-based firm also saw its total income growing marginally to Rs 121.6 crore in the quarter under review from Rs 121.3 crore during the year-ago period. There will be some activity in automobile stocks like Tata Motors, Ashok Leyland, Maruti Suzuki, Mahindra & Mahindra, Force Motors and SML Isuzu as they will announce their sales figures for May.

On the global front, Asian shares were trading mixed, after manufacturing surveys showed a gain in Japan, but weaker views in China. Japanese companies picked up the pace of their investment in plant and equipment in January-March, highlighting a nascent return to the level of business spending needed to drive economic recovery and put a decisive end to deflation. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,600 and 31,100 levels respectively. The market breadth on BSE was positive in the ratio of 1327:843, while 113 scrips remained unchanged.

The BSE Sensex is currently trading at 31185.32, up by 39.52 points or 0.13% after trading in a range of 31070.47 and 31213.12. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.43%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.00%, FMCG up by 1.15%, Consumer Disc up by 0.74%, Auto up by 0.66% and Realty up by 0.47%, while Oil & Gas down by 1.21%, Energy down by 0.97%, Metal down by 0.94%, Bankex down by 0.43% and PSU down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.87%, Hindustan Unilever up by 2.43%, Hero MotoCorp up by 1.57%, ITC up by 1.28% and Lupin up by 1.13%.

On the flip side, ONGC down by 1.33%, ICICI Bank down by 1.32%, Asian Paints down by 1.09%, Tata Steel down by 1.07% and Reliance Industries down by 0.90% were the top losers.

Meanwhile, the growth of eight core sectors, which contribute 38% to the total industrial production, slowed down to a three month low of 2.5% in April 2017 as against 8.7% in April 2016, mainly due to lower coal, crude oil and cement productions. According to the data released by the ministry of Commerce and Industry, the combined Index of eight core industries coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity stood at 118.6 in April, 2017, which was 2.5% higher compared to the index of April, 2016. Its cumulative growth during April to March, 2016-17 was 4.8%.

Among eight core sectors, Steel production having 17.92% weight jumped 9.3% in April, 2017 over April, 2016. Its cumulative index during April to March, 2016-17 surged by 10.7% over the corresponding period of previous year. Electricity generation having 19.85% weight advanced 4.7% in April, 2017 over April, 2016. Its cumulative index during April to March, 2016-17 increased by 5.9% over the corresponding period of previous year. Coal production having 10.33% weight declined by 3.8% in April, 2017 over April, 2016, while its cumulative index during April to March, 2016-17 increased by 3.2% over corresponding period of previous year.  

The Natural Gas production having 6.88% weight surged 2.0% in April, 2017 over April, 2016, while its cumulative index during April to March, 2016-17 declined by 1.0% over the corresponding period of previous year. Crude Oil production having 8.98% weight dipped by 0.6% in April, 2017 over April, 2016. Its cumulative index during April to March, 2016-17 declined by 2.5% over the corresponding period of previous year.  

On the other hand, Cement production having 5.37% weight declined 3.7% in April, 2017 over April, 2016. Its cumulative index during April to March, 2016-17 was down by 1.2% over the corresponding period of previous year. Fertilizer production having 2.63% weight advanced 6.2% in April, 2017 over April, 2016. Its cumulative index during April to March, 2016-17 increased by 0.2% over the corresponding period of previous year.  Petroleum Refinery production having 28.04% weight increased 0.2% in April, 2017 over April, 2016. Its cumulative index during April to March, 2016-17 advanced by 4.9% over the corresponding period of previous year.  

The CNX Nifty is currently trading at 9626.65, up by 5.40 points or 0.06% after trading in a range of 9598.45 and 9634.65. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 3.72%, Hindustan Unilever up by 2.54%, Sun Pharma up by 2.42%, Bharti Infratel up by 2.25% and Tech Mahindra up by 1.60%.

On the flip side, Hindalco down by 2.27%, Indian Oil down by 1.79%, Vedanta down by 1.78%, Indiabulls Housing Finance down by 1.73% and BPCL down by 1.43% were the top losers.

The Asian markets were trading on a mixed note; Taiwan Weighted increased 36.9 points or 0.37% to 10,077.62, Hang Seng increased 110.25 points or 0.43% to 25,770.90 and Nikkei 225 increased 228.69 points or 1.16% to 19,879.26.

On the other hand, Shanghai Composite decreased 15.43 points or 0.49% to 3,101.75, KOSPI Index decreased 2.93 points or 0.12% to 2,344.45 and FTSE Bursa Malaysia KLCI decreased 2.33 points or 0.13% to 1,763.54.

Jakarta Stock Exchange was closed on account of ‘Pancasila Day’ holiday.