Markets hover near intraday highs as WPI falls

Indian equity benchmarks wiped off their earlier losses, entered into positive territory in late afternoon session and hovering near the intraday highs after India’s Wholesale price index (WPI) inflation eased in May, as prices of fuel and food articles declined. According to the data released by the ministry of commerce and industry, the WPI with the revised base year of 2011-12 fell to 2.17% in May from 3.85% in April. Firm opening in European markets coupled with heavy buying in Energy, Realty and Capital Goods, also aided the sentiments. Investors took some support with the report that the government is working on a new industrial policy to promote and develop frontier technologies, innovation and enhance competitiveness of domestic products. It will be designed according to the current time of artificial intelligence and automation. Meanwhile, the Central Statistics Office (CSO) is once again planning to change the gross domestic product (GDP) base year to 2017-18 from 2011-12. Furthermore, the Union Cabinet cleared a proposal to introduce a Bill in Parliament for setting up the Resolution Corporation to deal with bankruptcy in banks, insurance companies and financial entities.

On the global front, European markets were trading in green as investors cautiously awaited the latest monetary decision by the U.S. Federal Reserve. Investors expect the Fed to raise rates but more importantly, they will be watching out for comments on the central bank's future path. However, Asian markets were trading in red. Beck home, in scrip specific development, Lupin edged higher after the company received final approval for its Oxycodone Hydrochloride Tablets USP, 5 mg, 10 mg, 15 mg, 20 mg and 30 mg from the United States Food and Drug Administration (USFDA) to market a generic version of Mallinckrodt's Roxicodone Tablets.

The BSE Sensex is currently trading at 31174.48, up by 70.99 points or 0.23% after trading in a range of 31054.94 and 31183.11. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.13%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Energy up by 1.29%, Realty up by 0.97%, Capital Goods up by 0.82%, Oil & Gas up by 0.56% and Industrials up by 0.39%, while FMCG down by 0.60%, Metal down by 0.28%, Consumer Durables down by 0.26%, Basic Materials down by 0.23% and Telecom down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.85%, ICICI Bank up by 2.13%, Dr. Reddy’s Lab up by 1.89%, Larsen & Toubro up by 1.34% and Hero MotoCorp up by 1.22%. On the flip side, Cipla down by 2.05%, Wipro down by 1.91%, ITC down by 1.35%, HDFC down by 1.11% and Asian Paints down by 0.90% were the top losers.

Meanwhile, in order to promote and develop frontier technologies, innovation and enhance competitiveness of domestic products, the government is working on a new industrial policy. The Department of Industrial Policy and Promotion (DIPP), under the commerce and industry ministry, is working on this proposal. To bring a new industrial policy, the government will make comprehensive changes in the 1991 policy. It will be designed according to the current time of artificial intelligence and automation.

According to the government, the new industrial policy is necessary for promotion of manufacturing scenario, new technology, research and development and artificial intelligence and automation. The new policy will focus on simplifying innovation and taxation system. Apart from this, the new challenges of the manufacturing sector will also be found in the new policy. The new policy will also be linked with government schemes like Make in India, Skill India, Startup India and Foreign Direct Investment Policy. Besides, the draft of the new policy should be ready by September 2017.

As per the DIPP website, industrial policy since 1991 has been more for facilitating the industrial development rather than anchoring it through permits and controls. Industrial licensing was abolished for most of the industries and there are only four industries, including defence and explosives, where licence is currently required. It said that a number of initiatives have been taken for ease of doing business for industrial licensing, increasing initial validity period of those licences and simplification of application forms.

The CNX Nifty is currently trading at 9611.95, up by 5.05 points or 0.05% after trading in a range of 9580.45 and 9627.40. There were 23 stocks advancing against 27 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Reliance Industries up by 2.74%, Bank of Baroda up by 2.12%, Dr. Reddy’s Lab up by 1.92%, ICICI Bank up by 1.56% and Hero MotoCorp up by 1.23%. On the flip side, Yes Bank down by 2.75%, Cipla down by 2.19%, Wipro down by 1.91%, ITC down by 1.47% and Tata Motors - DVR down by 1.38% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 55.69 points or 0.55% to 10,072.46, Shanghai Composite decreased 23.07 points or 0.73% to 3,130.67, Nikkei 225 decreased 15.23 points or 0.08% to 19,883.52 and KOSPI Index decreased 2.06 points or 0.09% to 2,372.64. On the flip side, FTSE Bursa Malaysia KLCI increased 6.96 points or 0.39% to 1,791.40, Hang Seng increased 23.8 points or 0.09% to 25,875.90 and Jakarta Composite increased 47.97 points or 0.84% to 5,755.61.

All European markets were trading in green; UK’s FTSE 100 increased 13.23 points or 0.18% to 7,513.67, France’s CAC increased 45.73 points or 0.87% to 5,307.47 and Germany’s DAX increased 60.75 points or 0.48% to 12,825.73.