Benchmarks extend losses in morning session

Indian equity benchmarks extended their losses and continued to trade in red in morning session on account of selling in front line blue chip counters, with Nifty trading below 10,300 mark.  The rupee opened lower against dollar on account of buying of American currency by corporates and importers. Foreign Portfolio Investors stood net sellers in domestic equity markets on Friday and sold shares worth Rs 667.24 crore (net) with gross purchases and gross sales of Rs 5,722.60 crore and Rs 6,389.84 crore, respectively. The sentiments were dampened as India’s Industrial production growth slowed down to 3.8% in the month of September 2017, as against 5.7% in September 2016, after hitting nine-month high of 4.3% in August 2017. The slowdown was mainly due to subdued performance of the manufacturing sector, coupled with contraction in output of consumer durables. Manufacturing sector, which accounts for more than three-fourths of the entire index, slowed to 3.4% in September, from 5.8% in the same month previous year. Separately, investments in the Indian capital market through participatory notes (P-notes) plunged to an over eight-year low of Rs 1.23 lakh crore at September-end in view of stringent norms put in place by regulator Securities and Exchange Board of India (SEBI). According to SEBI data, the total value of P-notes investments in Indian markets - equity, debt and derivatives - slumped to Rs 1,22,684 crore at September-end after hitting seven-and-a-half year low of Rs 1,25,037 crore at the end of August.

Traders were seen piling up position in IT, TECK and Bankex stocks, while selling was witnessed in Realty, Capital Goods and Oil & Gas sector stocks. Public sector banking stocks were buzzing in today’s trade as Finance Minister Arun Jaitley said that the government has decided to inject more capital into state-owned banks to strengthen the banking system and spur economic growth. In scrip specific development, The New India Assurance Company made a tepid listing at a discount on the exchanges. The new entrant’s Initial Public Offering (IPO), which sought to raise Rs 9,600 crore, was oversubscribed around 1.19 times. The price band was Rs 770-800 per share. Larsen and Toubro (L&T) was trading in red as investors negatively reacted to the company’s tepid order inflow guidance. The company has maintained its full year revenue growth guidance of 12% but won’t be meeting order inflow guidance 12-14%.

On the global front, Asian markets were trading mostly in green. Hong Kong’s trade-reliant economy posted slower growth in the third quarter, but strong consumption and rebounding exports led the government to nudge up its growth outlook for 2017. Supported by improving retail sales, a rebound in mainland tourist arrivals and strong global trade, the economy grew a seasonally-adjusted 0.5% in the third quarter. That compared with upwardly revised 1.1% growth previously. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 33,300 and 10,300 levels respectively. The market breadth on BSE was negative in the ratio of 1133:1157, while 101 scrips remained unchanged.

The BSE Sensex is currently trading at 33230.98, down by 83.58 points or 0.25% after trading in a range of 33210.13 and 33417.30. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.11%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were IT up by 0.85%, TECK up by 0.46%, Bankex up by 0.33%, Auto up by 0.30% and Consumer Disc up by 0.29%, while Realty down by 1.93%, Capital Goods down by 1.87%, Oil & Gas down by 1.30%, Energy down by 1.02% and Telecom down by 0.99% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.33%, Mahindra & Mahindra up by 2.19%, TCS up by 1.69%, Axis Bank up by 1.56% and Hindustan Unilever up by 0.86%.

On the flip side, Coal India down by 3.25%, Larsen & Toubro down by 2.93%, Cipla down by 2.10%, ONGC down by 1.81% and HDFC down by 1.67% were the top losers.

Meanwhile, after hitting nine-month high of 4.3% in August 2017, India’s Industrial production growth slowed down to 3.8% in the month of September 2017, as against 5.7% in September 2016. The slowdown was mainly due to subdued performance of the manufacturing sector, coupled with contraction in output of consumer durables. Manufacturing sector, which accounts for more than three-fourths of the entire index, slowed to 3.4% in September, from 5.8% in the same month previous year. Electricity generation growth slipped to 3.4% in September compared to 5.1% a year before. However, mining recorded a growth of 7.9% in the month under review as against a contraction of 1.2% a year ago.

As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, Index of Industrial Production (IIP) with base 2011-12 for the month of September 2017, stood at 122.7, 3.8% higher as compared to the level in the month of September 2016. The cumulative growth for the period April-September 2017 over the corresponding period of the previous year stood at 2.5%. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of September 2017 stood at 94.6, 125.1 and 150.5 respectively. The cumulative growth in these three sectors during April-September 2017 over the corresponding period of 2016 has been 3.9%, 1.9% and 5.7% respectively.

Capital goods production rose to a 7-month high of 7.4%, suggesting some traction in investment activity, while output of consumer non-durables increased 10%, indicating better rural demand. Production of consumer durable goods contracted to 4.8% as against growth of 10.3% last year and 1.6% in the previous month. Intermediate goods and Infrastructure/Construction Goods reported growth of 1.9% and 0.5%, respectively.

In terms of industries, 11 out of the 23 industry groups in the manufacturing sector showed positive growth during the month of September 2017 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of pharmaceuticals, medicinal chemical and botanical products’ has shown the highest positive growth of 26.4% followed by 13.2% in ‘Manufacture of computer, electronic and optical products’ and 13.1% in ‘Manufacture of motor vehicles, trailers and semi-trailers’. On the other hand, the industry group ‘Other manufacturing’ has shown the highest negative growth of (-) 27.1% followed by (-) 23.1% in ‘Manufacture of tobacco products’ and (-) 19.2% in ‘Manufacture of electrical equipment’.

The CNX Nifty is currently trading at 10283.00, down by 38.75 points or 0.38% after trading in a range of 10278.10 and 10334.15. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were SBI up by 2.31%, Mahindra & Mahindra up by 2.23%, Tech Mahindra up by 1.63%, TCS up by 1.50% and Axis Bank up by 1.30%.
On the flip side, Coal India down by 3.25%, Aurobindo Pharma down by 2.98%, Larsen & Toubro down by 2.85%, BPCL down by 2.75% and Bosch down by 2.41% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.56 points or 0.15% to 1,744.84, Shanghai Composite increased 12.39 points or 0.36% to 3,445.07, Jakarta Composite increased 17.81 points or 0.3% to 6,039.64 and Hang Seng increased 80.38 points or 0.28% to 29,201.30.

On the other hand, Nikkei 225 decreased 127.96 points or 0.56% to 22,553.46, Taiwan Weighted decreased 14.75 points or 0.14% to 10,717.92 and KOSPI Index decreased 7.51 points or 0.3% to 2,535.44.