Benchmarks turn flat after positive start

Paring all their initial gains, Indian equity benchmarks have turned flat in early deals on Wednesday, as traders remained concerned with wholesale inflation rising to 1.88 percent in July as prices of some commodities increased in the first month of Goods and Services Tax (GST) rollout. However, traders took some solace with report that India’s trade deficit narrowed to $11.45 billion in July from a month ago, following a slowdown in merchandise imports. Also, recording a growth of over 3.9 percent on the back of a healthy rise in shipments of engineering goods, petroleum products and chemicals, Indian exports in July grew at $22.5 billion. Traders also took some encouragement with statements by the Prime Minister Narendra Modi who on 70th Independence Day promising to lead the country on a new track of economic progress, said his government would intensify the fight against black money and corruption.

On the global front, Asian markets were trading mostly in green at this point of time, as investors digested earnings releases from regional corporates and a resurgent dollar. The US markets made a mixed closing in last session and while the Dow extended its gains amid better-than-expected retail sales data and an abatement of tensions between the U.S. and North Korea, S&P 500 and Nasdaq ended marginally in red.

Back home, select steel stocks edged higher on report that domestic crude steel production witnessed a 4.6 per cent increase at 8.45 million tonnes (MT) in July. PSU stocks remained buzzing, on report that the government is in advanced stage of appointing advisers for proposed strategic sales in state-run firms such as Scooters India, BEML, Pawan Hans and Hindustan Prefab. Meanwhile, the market breadth indicating the overall health of the market was strong, with 1,110 shares gaining and 715 shares declining, while a total of 67 shares were unchanged.

The BSE Sensex is currently trading at 31453.47, up by 4.44 points or 0.01% after trading in a range of 31399.35 and 31602.64. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.41%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were FMCG up by 1.28%, Consumer Durables up by 0.78%, Auto up by 0.43%, Basic Materials up by 0.29% and Power was up by 0.28%, while Capital Goods down by 0.83%, Bankex down by 0.59%, Energy down by 0.46%, PSU down by 0.39% and Oil & Gas was down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.81%, ITC up by 1.48%, HDFC up by 1.44%, Hindustan Unilever up by 1.36% and Adani Ports & SEZ up by 1.29%. On the flip side, Larsen & Toubro down by 1.62%, Coal India down by 1.45%, ICICI Bank down by 1.22%, Asian Paints down by 1.10% and Reliance Industries down by 0.95% were the top losers.

Meanwhile, after hitting a record low in June, India’s retail inflation jumped to 2.36% in the month of July 2017, on the back of hardening of prices in sugar and confectionery items, pan, tobacco and intoxicants. But, on a year-on-year basis, it was lower than the 6.07% CPI rate reported for the corresponding month of last year. Also, the retail inflation remained within the lower end of the central bank’s forecast range of 2-3.5% for the first half of the current fiscal. Besides, the consumer price index (CPI) for the month of June was revised downwards to 1.46%.

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 July 2017, stood at 2.41%, 2.17% and 2.36% respectively, compared to at 6.66%, 5.39% and 6.07% respectively in July 2016. The data also showed that Consumer Food Price Index (CFPI) for all India Rural, Urban and Combined for July 2017 stood at 0.07%, (-) 0.99% and (-) 0.29%, respectively, compared to 8.18%, 8.80% and 8.35% respectively in July 2016. The index value of CFPI for combined stood at 138.4 for the month of July 2017.

According to the data, the price of sugar and confectionery items went up by 8.27% in July, while pan, tobacco and intoxicants turned dearer by 6.39%. Housing expenses saw a price increase of 4.98%, while that of the fuel and light segment was up by 4.86%. Retail price of clothing and footware items also increased 4.22%. On the other hand, the major contraction in price was witnessed in pulses and products at (-) 24.75%, followed by vegetables (-) 3.57%, eggs (-) 2.04% and spices (-) 1.67%.

The CNX Nifty is currently trading at 9790.85, down by 3.30 points or 0.03% after trading in a range of 9773.85 and 9830.75. There were 21 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 4.40%, Tech Mahindra up by 1.83%, Sun Pharma up by 1.70%, HDFC up by 1.57% and ITC up by 1.42%. On the flip side, Bank of Baroda down by 2.07%, Larsen & Toubro down by 1.72%, Coal India down by 1.32%, ICICI Bank down by 1.25% and Asian Paints down by 1.20% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 0.28 points or 0.02% to 1,772.67, Taiwan Weighted gained 4.97 points or 0.05% to 10,316.13, Nikkei 225 advanced 5.28 points or 0.03% to 19,758.59, KOSPI Index increased 11.82 points or 0.51% to 2,346.04, Jakarta Composite added 14.14 points or 0.24% to 5,849.18 and Hang Seng was up by 179.28 points or 0.66% to 27,354.24.

On the flip side, Shanghai Composite was down by 5.95 points or 0.18% to 3,245.31.