Weak trade persists; Telecom stocks tumble

Adding some losses, the local benchmarks continued to show sluggish trend in late afternoon session, on the back of weak opening in European markets. Some caution prevailed ahead of corporate results due later this month coupled with falling oil marketing companies stocks, as crude oil prices strengthened. Investors were also concerned with the reports that retail inflation for industrial workers rose to 3.97% in November 2017 as compared to 3.24% for the previous month, mainly due to surge in prices of food items, kerosene and cooking gas. Besides, all the sectors were trading in red except metal on the BSE and broader indices also continued their weak trade in late noon deals with the losses of more than half a percent. However, positive core sector data and Manufacturing PMI, restricting further losses. The growth of eight core infrastructure industries expanded at a faster pace to a thirteen-month high of 6.8% in November 2017, from 4.7% in October, while 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. On the sectoral front, telecom stocks were hitting most after Telecom Regulatory Authority of India (TRAI) on Tuesday instructed all telecom operators in India to follow the new interconnection agreement set by them.

On the global front, European markets were trading in red, as investors continued to monitor geopolitical unrest in Iran. Iranian protesters attacked police stations late into the night on Monday. Asian markets were trading mostly in green. Back home, in scrip specific development, NACL Industries traded jubilantly after the company received nod to raise funds up to Rs 300 crore.

The BSE Sensex is currently trading at 33732.70, down by 80.05 points or 0.24% after trading in a range of 33723.26 and 33964.14. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.82%, while Small cap index was down by 0.71%.

The lone gaining sectoral index on the BSE was Metal up by 0.09%, while Telecom down by 1.35%, Realty down by 1.25%, Utilities down by 0.73%, Oil & Gas down by 0.70% and Capital Goods down by 0.69% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 3.03%, Tata Motors up by 2.24%, ONGC up by 1.98%, Coal India up by 1.07% and Mahindra & Mahindra up by 0.94%. On the flip side, Bharti Airtel down by 1.92%, Larsen & Toubro down by 1.32%, SBI down by 1.22%, Maruti Suzuki down by 1.20% and Hindustan Unilever down by 1.05% were the top losers.

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 is currently trading at 10420.65, down by 14.90 points or 0.14% after trading in a range of 10409.65 and 10495.20. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.49%, Bharti Infratel up by 2.22%, ONGC up by 2.13%, Tech Mahindra up by 2.07% and UPL up by 2.00%. On the flip side, Eicher Motors down by 3.44%, Indiabulls Housing Finance down by 2.40%, HPCL down by 2.38%, BPCL down by 1.97% and Bharti Airtel down by 1.96% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 12.16 points or 0.49% to 2,479.65, Shanghai Composite increased 41.15 points or 1.24% to 3,348.33, Taiwan Weighted increased 67.87 points or 0.64% to 10,710.73 and Hang Seng increased 596.16 points or 1.99% to 30,515.31. On the flip side, Jakarta Composite decreased 22.55 points or 0.35% to 6,333.11 and FTSE Bursa Malaysia KLCI decreased 15.8 points or 0.88% to 1,781.01.

All European markets were trading in red; Germany’s DAX decreased 119.54 points or 0.93% to 12,798.10, France’s CAC decreased 25.7 points or 0.48% to 5,286.86 and UK’s FTSE 100 decreased 19.07 points or 0.25% to 7,668.70.