Bourses continue to trade higher on easing WPI inflation

Key benchmark indices continued to trade higher in early afternoon session, on the back of easing wholesale price index (WPI) inflation data. India’s wholesale price index (WPI) inflation for the month of December 2017 slipped to 3.58% as compared to 3.93% in November 2017. Additional support also came with report that India’s Industrial production growth, gave a positive surprise, accelerating to 25-month high of 8.4% in November 2017, as compared to 5.1% in November 2016, on the back of robust performance of manufacturing and capital goods sectors. The previous high was recorded at 9.8% in October, 2015. Besides, recovery in corporate earnings along with high optimism over global peers, too added some thrust on the street. However, the markets trimmed some of their gains with data showing that India’s retail inflation or Consumer Price Index (CPI) shot up to a 17-month high of 5.2% in the month of December 2017, as against 3.41% growth in December 2016 and a 15-month high of 4.88% November 2017. Meanwhile, the rupee was in a sweet spot, strengthening by another 20 paise to 64.42 against the dollar in early trade. In scrip specific development, Mohota Industries was up by over four percent after foraying into B2C segment through its existing dealer network and e-commerce platforms.

On the global front, Asian markets were trading mostly in green, after Wall Street closed out last week at records and the dollar continued to struggle. Back home, the BSE Sensex is currently trading at 34904.64, up by 312.25 points or 0.90% after trading in a range of 34687.21 and 34963.69. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Bankex up by 1.09%, Basic Materials up by 0.88%, Metal up by 0.86%, Realty up by 0.59% and Capital Goods up by 0.33%, while Auto down by 0.54%, Telecom down by 0.51%, Oil & Gas down by 0.13% and Healthcare down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 5.83%, ICICI Bank up by 2.96%, Tata Steel up by 1.93%, HDFC Bank up by 1.65% and NTPC up by 1.16%. On the flip side, Tata Motors - DVR down by 1.47%, ONGC down by 1.17%, Hero MotoCorp down by 1.15%, Indusind Bank down by 1.14% and Sun Pharma down by 0.72% were the top losers.

Meanwhile, after witnessing an increase in the month of October, the share of foreign portfolio investments (FPI) through participatory notes (P-notes) has decreased to Rs 1.28 lakh crore at the end of November, due to tough rules put in place by Securities and Exchange Board of India (SEBI). According to Securities and Exchange Board of India (SEBI) data, total value of P-Notes investments in Indian markets including equity, debt and derivatives, at November end declined to Rs 128,639 crore, from Rs 131,006 crore at the end of October. Prior to that, the total investment value through P-notes stood at Rs 122,684 crore in September-end and Rs 125,037 crore in August-end. 

Investments through P-Notes were showing declining trend since June and hit an over eight-year low in September, however, it climbed up in October. Of the total, P-note holdings in equities at November-end were at Rs 92,846 crore, while in debts and derivatives were at Rs 30,720  crore and Rs 5,072 crore respectively. The quantum of FPI investments via P-Notes decreased to 4.0 percent in November, from 4.1 percent in the preceding month. P-notes are issued by registered Foreign Portfolio Investors to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. However, they need to go through a proper due diligence process.

Over the past few months, the markets regulator SEBI has taken several measures to stop the misuse of the controversy-ridden participatory notes. In July, the SEBI notified stricter P-notes norms stipulating a fee of $1,000 that would be levied on each instrument to check any misuse for channelising black money. Also, the regulator prohibited FPIs from issuing such notes where the underlying asset is a derivative, except those which are used for hedging purposes. The move was a follow-through of SEBI's board approval of a relevant proposal in June. These measures were an outcome of a slew of other steps taken by the regulator in the recent past.

The CNX Nifty is currently trading at 10754.55, up by 73.30 points or 0.69% after trading in a range of 10713.80 and 10782.65. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were HDFC up by 5.68%, ICICI Bank up by 2.90%, Tata Steel up by 2.15%, Zee Entertainment up by 2.10% and HDFC Bank up by 1.76%. On the flip side, Eicher Motors down by 2.25%, Hero MotoCorp down by 1.42%, ONGC down by 1.42%, HCL Tech. down by 1.31% and GAIL India down by 1.22% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 4.4 points or 0.24% to 1,827.07, KOSPI Index rose 7.31 points or 0.29% to 2,503.73, Nikkei 225 added 61.06 points or 0.26% to 23,714.88, Taiwan Weighted was up by 72.35 points or 0.66% to 10,956.31 and Hang Seng surged 190.71 points or 0.61% to 31,603.25.

On the flip side, Shanghai Composite decreased 9.64 points or 0.28% to 3,419.30 and Jakarta Composite was down by 0.23 points or 0% to 6,369.84.