Benchmarks trade in fine fettle; Nifty reclaims 10,100 mark

Indian equity benchmarks are trading in fine fettle in early deals on Wednesday with frontline gauges recapturing their crucial 10,100 (Nifty) and 32,200 (Sensex) levels, as traders get some support with report that Index of Industrial Production (IIP) or factory output for the month of July 2017 stood at 1.2% compared to negative 0.1% in June 2017 and 5.2% in the similar month of the previous year. However, gains remained capped with report that the retail inflation or Consumer Price Index (CPI) grew 3.36% in August 2017 as against 2.36% in July 2017 and 5.05% in the corresponding month of the previous year. Meanwhile, an Assocham-EY study has said that the government needs to focus on ways to push the growth of manufacturing sector if it wants to maintain a sustained GDP growth of 9-10 per cent per year. The report said that although implementation of the Goods and Services Tax (GST) has addressed several regulatory issues, state governments need to resolve issues like bureaucratic obstacles, obstructive regulations and policies to boost manufacturing sector.

On the global front, Asian markets were trading mostly in red at this point of time after North Korea said it will accelerate its plans to acquire a nuclear weapon that can strike the U.S. homeland. The US markets extended their gains in the last session, led by financials on tax reform hopes and tech stocks after Apple's highly-anticipated product launches.

Back home, telecom stocks remained buzzing, as the Telecom Commission (TC) has asked the inter-ministerial panel looking into the health of the telecom sector to consider ways for giving greater and immediate relief to telcos, which are facing high debt levels and falling revenue. Meanwhile, the market breadth indicating the overall health of the market was strong, with 1,238 shares gaining and 724 shares declining, while a total of 84 shares were unchanged.

The BSE Sensex is currently trading at 32247.05, up by 88.39 points or 0.27% after trading in a range of 32137.71 and 32253.52. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.61%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Energy up by 1.43%, Healthcare up by 0.91%, Oil & Gas up by 0.76%, Utilities up by 0.76% and Power was up by 0.64%, while FMCG down by 0.36%, Capital Goods down by 0.28% and Telecom was down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.57%, Dr. Reddys Lab up by 1.53%, Tata Motors up by 1.30%, Hero MotoCorp up by 1.30% and Sun Pharma up by 1.15%. On the flip side, ITC down by 1.35%, Larsen & Toubro down by 0.82%, HDFC down by 0.64%, Bharti Airtel down by 0.22% and Tata Steel down by 0.13% were the top losers.

Meanwhile, India's industrial output expanded by 1.2% in the month of July 2017, as compared to the growth of 4.5% in the same period last year, while it had contracted by 0.1% in the month of June 2017. The mining and electricity showed good performance during the period, but capital goods output declined in the month of August. Manufacturing sector, which constitutes over 77% of the index, showed a growth of 0.1% in July as compared to a growth of 5.3% in the same month last year. The output of mining and electricity sectors during the month accelerated to 4.8% and 6.5% from 0.9% and 2.1% respectively in June last year.

As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, IIP with base 2011-12 for the month of July 2017, stood at 118.2, which is 1.2% higher as compared to the level in the month of July 2016. The cumulative growth for the period April-July 2017 over the corresponding period of the previous year stood at 1.7%. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of July 2017 were at 92.6, 119.5 and 151.8 respectively. The cumulative growth in these three sectors during April-July 2017 over the corresponding period of 2016 has been 2.1%, 1.3% and 5.6% respectively.

Capital goods output, which is the barometer of investment, declined 1% from a growth of 8.8% a year ago and (-) 6.8% fall last month. As per Use-based classification, the growth rates in July 2017 over July 2016 are 2.3% in Primary goods, (-) 1.8% in Intermediate goods and 3.7% in Infrastructure/ Construction Goods.  The Consumer durables and Consumer non-durables have recorded growth of (-) 1.3% and 3.4% respectively.

In terms of industries, 8 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of July 2017 as compared to the corresponding month of the previous year. The industry group ‘Other manufacturing’ has shown the highest positive growth of 20.9% followed by 18.9% in ‘Manufacture of pharmaceuticals, medicinal chemical and botanical products’ and 10.5% in ‘Manufacture of other transport equipment’. On the other hand, the industry group ‘Manufacture of tobacco products’ has shown the highest negative growth of (-) 43.4% followed by (-) 11.1% in ‘Manufacture of electrical equipment’ and (-) 8.8% in ‘Printing and reproduction of recorded media’.

The CNX Nifty is currently trading at 10116.60, up by 23.55 points or 0.23% after trading in a range of 10084.05 and 10119.55. There were 29 stocks advancing against 21 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Tata Power up by 6.42%, Reliance Industries up by 2.53%, Tech Mahindra up by 1.86%, Dr. Reddys Lab up by 1.58% and Aurobindo Pharma up by 1.39%. On the flip side, ITC down by 1.44%, Larsen & Toubro down by 0.93%, HDFC down by 0.75%, Indiabulls Housing down by 0.56% and Eicher Motors down by 0.50% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 82.29 points or 0.29% to 27,889.95, Taiwan Weighted declined 51.74 points or 0.49% to 10,558.61, Shanghai Composite slipped 3.1 points or 0.09% to 3,376.39 and FTSE Bursa Malaysia KLCI was down by 1.15 points or 0.06% to 1,788.71.

On the flip side, KOSPI Index gained 3.67 points or 0.16% to 2,369.14, Jakarta Composite increased 4.69 points or 0.08% to 5,877.07 and Nikkei 225 was up by 99 points or 0.5% to 19,875.62.