Benchmarks trade with modest gains

Indian equity benchmarks continued their firm trade in late morning session on account of buying in front line blue chip counters. The rupee opened on a flat note against dollar ahead of the US Federal Reserve policy meeting kick starting Tuesday. Traders were taking support on signs of recovery in the global markets and on getting double dose of good macro data. India’s industrial production grew by 3.1 percent in April 2017, as compared to 2.7 percent in the month of March 2017 and against a drop of 1.2 percent in February 2017. The growth was due to good performance of electricity, mining and manufacturing sectors. The Index of Industrial Production (IIP) for the month of April 2017 stood at 117.9. The cumulative growth for the period April-March 2016-17 over the corresponding period of the previous year stood at 5.0 percent. Consumer inflation fell to its lowest in at least five years in May because of softer food prices, raising hopes the Reserve Bank of India (RBI) may cut rates to boost the struggling industrial sector. Retail inflation declined to 2.1% in May from 2.99% in April. Meanwhile, Union minister of State for Civil Aviation Jayant Sinha said that India's Gross Domestic Product (GDP) is currently growing at 7 to 8 per cent. If it is looked at in the context of purchasing power parity (PPP) India’s economy is worth 9.5 trillion dollars. In the next decade, it will contribute 11 trillion dollars to the world economy.

Traders were seen piling up position in Realty, Basic Materials and Capital Goods stocks, while selling was witnessed in IT, TECK and Metal stocks. In scrip specific development, Jeevan Scientific Technology was locked at upper circuit limit on successfully completing the audit conducted by USFDA at its corporate and clinical pharmacology centre facilities. No 483 observations were issued to the company. The US Food and Drug Administration (USFDA) had conducted an un-announced audit at the company’s corporate and clinical pharmacology centre facilities. The purpose of this audit was to review the BA/BE studies. The auditor started the review on Jun 05, 2017 and completed on Jun 08, 2017.

On the global front, Asian shares were trading mostly in green barring Tokyo stock exchange. A senior central bank official said that the Bank of Japan will continue to pursue necessary monetary policy steps to stabilize prices, while keeping an eye on how they affect its financial health. 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 1412:757, while 111 scrips remained unchanged.

The BSE Sensex is currently trading at 31181.45, up by 85.75 points or 0.28% after trading in a range of 31075.80 and 31200.31. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.45%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Realty up by 1.04%, Basic Materials up by 0.56%, Capital Goods up by 0.55%, Telecom up by 0.55% and Consumer Disc up by 0.49%, while IT down by 0.52%, TECK down by 0.35%, Metal down by 0.18% and Consumer Durables down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.46%, Sun Pharma up by 1.17%, Lupin up by 1.06%, Hindustan Unilever up by 0.65% and Bajaj Auto up by 0.62%.

On the flip side, Tata Motors down by 0.78%, TCS down by 0.64%, Infosys down by 0.51%, Wipro down by 0.48% and Coal India down by 0.31% were the top losers.

Meanwhile, with the sharp fall in prices of kitchen staples like vegetables and pulses, India’s retail inflation slumped to record low of 2.18 percent in May 2017, as compared to 2.99 percent in April 2017 and 5.76 percent in May 2016, even though there was a marginal spike in fruit rates. Besides, clothing, housing, fuel and light also saw lower inflation. The inflation was lowest level since the series began in 2012 and remained below the RBI's medium-term target of 4.0 percent for the seventh successive month.

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 May 2017, stood at 2.30 percent, 2.13 percent and 2.18 percent respectively, compared to 6.45 percent 4.89 percent 5.76 percent respectively in May 2016. The index value for CPI (General) for Rural was 133.3, for Urban was 129.3 and for combined stood at 131.4 for the month of May.

The data also showed that Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for May 2017 stood at (-) 0.60 percent (-) 1.85 percent and (-) 1.05 percent respectively compared to 7.67 percent 7.24 percent and 7.47 percent respectively in May 2016. The index value of CFPI for Rural was 132.5, for Urban was 132.3 and for combined stood at 132.4 for the month of May.

For the first time since January 2012, food prices saw deflation in May and the prospect of good monsoon rains is likely to keep food inflation in check. Vegetables prices fell further and witnessed a negative growth of 13.44 percent as compared with (-) 8.59 percent in April. Similarly, prices of pulses continued to fall at (-) 19.45 percent, as compared with (-) 15.94 in April. Housing inflation remained flat, growing 4.84 percent in May from 4.86 percent in April. Fuel inflation was 5.46 percent in May, as compared with 6.13 percent in April.

The CNX Nifty is currently trading at 9636.35, up by 19.95 points or 0.21% after trading in a range of 9614.10 and 9646.75. There were 33 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were ACC up by 1.85%, Bosch up by 1.78%, Bank of Baroda up by 1.61%, Ultratech Cement up by 1.31% and Sun Pharma up by 1.21%.

On the flip side, Tech Mahindra down by 1.35%, Vedanta down by 1.18%, Tata Motors - DVR down by 0.92%, HCL Tech down by 0.90% and Tata Motors down by 0.88% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.81 points or 0.05% to 1,789.70, Jakarta Composite increased 4.3 points or 0.08% to 5,695.74, Shanghai Composite increased 10.21 points or 0.33% to 3,150.08, KOSPI Index increased 12.21 points or 0.52% to 2,370.08, Taiwan Weighted increased 32.69 points or 0.32% to 10,142.65 and Hang Seng increased 119.94 points or 0.47% to 25,827.98.

On the other hand, Nikkei 225 decreased 15.32 points or 0.08% to 19,893.26.