Post Session: Quick Review

Indian equity markets traded on a lackluster note oscillating between positive and negative terrain and ended on flat note. The market breadth was in favour of decline with one stock advancing against every two declining ones. The equity benchmarks pared their initial gains to enter into red terrain in early deals with frontline gauges slipping below their crucial levels. The sentiments were dampened on report that retail inflation for industrial workers rose to 3.97% in November, 2017 mainly due to surge in prices of food items, kerosene and cooking gas. The year-on-year inflation measured by monthly CPI-IW (Consumer Price Index-Industrial Workers) stood at 3.97% for November, 2017 as compared to 3.24% for the previous month (October, 2017) and 2.59% during the corresponding month (November 2016) of the previous year. Investors took note that diesel prices have flared up to a new record level in Delhi while petrol, kerosene and jet fuel prices continue to rise in the country in line with the surge in global crude oil prices. Prices of oil products have been rising for several months, fuelled by a relentless rise in crude oil prices which have soared 40% in six months to $67 a barrel amid healthy demand and an extended agreement to cut output by oil cartel OPEC, Russia and other producers.

However, street witnessed some buying as a report highlighted that the Nikkei India Manufacturing Purchasing Managers’ Index, or PMI, rose to a 5 year high of 54.7 in December from 52.6 in November. The survey highlighted that strong business performance was underpinned by the fastest expansions in output and new orders since December 2012 and October 2016 respectively. Separately, a steep rise in output of cement and steel pushed up the growth of the core sector to a 13-month high of 6.8% in November from 5% in October. The official data released by commerce and industry ministry showed a 17.3% rise in cement output and 16.6% increase in steel production in November compared with a 1.3% fall and 8.4% growth, respectively in October. Additionally, the traders took some solace with government’s decision to ease norms for rectification of GST returns. The Finance Ministry has permitted businesses to rectify mistakes in their monthly returns - GSTR-3B - and adjust tax liability, a move that will help them file correct returns without fear of penalty.

On the global front, Asian markets closed mostly in green, after a survey of Chinese manufacturing proved surprisingly upbeat, while the euro lurked within striking distance of its 2017 top against an ailing US dollar. The China Caixin December manufacturing PMI rose to 51.5, beating an expected 50.6 level. Sentiments was also helped by news that North Korea had offered an olive branch to South Korea, with Kim Jong Un saying he was open to dialogue with Seoul. The European markets were trading in red at the start of the trading year. Activity in the UK manufacturing sector slowed slightly in the last month of the year, but continued to expand at a solid pace.

Back home, oil marketing companies - Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) closed in red following further increase in Brent crude oil prices on ongoing supply cuts. Generally higher crude oil price is negative for oil marketing companies as it impacts their refining (difference between crude oil price and price of petroleum products coming out from oil refineries) and marketing margins. Select auto stocks were buzzing in today’s trade as car sales picked up in December. The improved consumer sentiment on the back of a broader economic revival, a surging stock market and year-end stock clearance offers pushed up sales of passenger vehicles in December.

The BSE Sensex ended at 33805.32, down by 7.43 points or 0.02% after trading in a range of 33703.37 and 33964.14. There were 14 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.55%, while Small cap index was down by 0.65%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 0.58%, Power up by 0.29%, Basic Materials up by 0.16%, Industrials up by 0.10% and Auto up by 0.04%, while Telecom down by 1.28%, Realty down by 1.03%, Healthcare down by 0.72%, Consumer Disc down by 0.69% and FMCG down by 0.51% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors - DVR up by 4.35%, Tata Motors up by 2.90%, ONGC up by 2.05%, NTPC up by 1.47% and Coal India up by 1.28%. (Provisional)

On the flip side, Bharti Airtel down by 2.30%, SBI down by 1.48%, Maruti Suzuki down by 1.26%, Axis Bank down by 1.21% and Larsen & Toubro down by 1.05% were the top losers. (Provisional)

Meanwhile, extending the trend of growth, manufacturing activity in India accelerated at a swift pace in the month of December to hit 5 year high, on the back of improved operating conditions and strong production. The substantial inflow of new orders too underpinned the expansion in manufacturing sector. However, Goods and Services Tax (GST) continued to exert upward pressure on manufacturers’ cost burdens in December.

As per the survey report, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance- rose to 54.7 in December from 52.6 in November, indicating a healthy growth in manufacturing sector since December 2012. The reading signaled an expansion for the fifth consecutive month, remaining above the no-change mark of 50.0.

In line with improved manufacturing activity, the employment growth also accelerated to the strongest since August 2012, on the back of favorable demand conditions in domestic and international markets. In the month of December, the new orders grew at sharpest rate since October 2016, while the new export orders rose at the quickest pace since June. 

On the price front, rising input costs continued to spark cost pressures on manufacturers and to pass on their cost burdens, firms raised output charges for the fifth month in succession. Further, the inflation rate rose to a 10-month high, but was modest and weaker than its long-run series average.

The CNX Nifty ended at 10441.05, up by 5.50 points or 0.05% after trading in a range of 10404.65 and 10495.20. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Motors up by 3.23%, UPL up by 2.41%, Bharti Infratel up by 2.35%, ONGC up by 2.16% and Tech Mahindra up by 2.09%. (Provisional)

On the flip side, Eicher Motors down by 3.91%, Indiabulls Housing down by 2.56%, Bharti Airtel down by 2.12%, BPCL down by 1.77% and HPCL down by 1.75% were the top losers. (Provisional)

The European markets were trading in red; UK’s FTSE 100 decreased 26.23 points or 0.34% to 7,661.54, Germany’s DAX decreased 118.63 points or 0.92% to 12,799.01 and France’s CAC decreased 43.15 points or 0.81% to 5,269.41.

Asian equity markets ended mostly in green on Tuesday, the first trading day of 2018, as a survey of Chinese manufacturing beat forecasts and North Korean leader Kim Jong Un said he is open to talks with South Korea, and may consider sending a delegation to next month's Winter Olympics in PyeongChang. Chinese shares ended higher after the China Caixin manufacturing PMI showed a reading of 51.5 in December, beating expectations and also touching a four-month high. Separately, official data showed Sunday that China's manufacturing activity edged down slightly in December, but largely maintained momentum. Meanwhile, Japanese markets were closed for a bank holiday.