Sensex, Nifty remain strong; Basic Materials, Bankex gain most

The local benchmarks remained strong in late afternoon session, with gains of more than half a percent, despite weak opening in European markets. Investors maintained their positions in Basic Materials, Banking and Metal stocks, while HDFC gained the most on the BSE. Sentiments remained upbeat as India's inflation on wholesale level eased in the month of December, supported by lower food articles and minerals prices and Industrial production growth accelerated 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. Traders were taking note of the reports that the commerce ministry is working on new schemes for the next foreign trade policy (FTP), to be released in 2019-20, with a view to boost exports. Some support also came with the report that the Income Tax Department of Bihar & Jharkhand region is likely to achieve a growth of 19% in tax collection during the current fiscal as it has already successfully brought 3.25 lakh new assessees under its net. The markets participant paid no heed towards the accelerated December CPI inflation data. Breaching the Reserve Bank of India’s medium-term target for the second straight month, 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.

On the global front, European markets were trading in red, as investors digested new earnings releases. Banking stocks were among the worst-performers with UK large cap banks under focus. However, Asian markets were trading mostly in green. Back home, in scrip specific development, KEC International shined after the company secured new orders worth Rs 1,095 crore from domestic and international customers. Under Transmission & Distribution segment the company has won orders worth Rs 800 crore across India, SAARC, Middle East and The Americas.

The BSE Sensex is currently trading at 34879.41, up by 287.02 points or 0.83% after trading in a range of 34687.21 and 34963.69. 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 0.05%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Basic Materials up by 1.12%, Bankex up by 1.08%, Metal up by 0.53%, Consumer Durables up by 0.49% and Realty up by 0.30%, while Auto down by 0.74%, Telecom down by 0.62%, Oil & Gas down by 0.53%, IT down by 0.24% and TECK down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 6.65%, ICICI Bank up by 3.04%, HDFC Bank up by 1.75%, Tata Steel up by 1.67% and Kotak Mahindra Bank up by 1.20%. On the flip side, Tata Motors - DVR down by 2.22%, ONGC down by 1.67%, Hero MotoCorp down by 1.50%, Indusind Bank down by 1.38% and Yes Bank down by 1.37% were the top losers.

Meanwhile, breaching the Reserve Bank of India’s medium-term target for the second straight month, 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. Retail inflation on a Y-o-Y basis edged higher mainly on account of a rise in the prices of food items like vegetables, milk-based products, eggs, meat and fish. The previous high was recorded at 6.07% in July 2016. The annual retail food inflation also rose 4.96% in December from 1.37% in the same month previous year and 4.35% in November 2017.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the Consumer Price Index (CPI) (Rural, Urban, Combined) on Base 2012=100 for December 2017, stood at 5.27%, 5.09% and 5.21% respectively, compared to at 3.83%, 2.90% and 3.41% respectively in December 2016. The index value of CPI for combined stood at 137.20. The data also showed that Consumer Food Price Index (CFPI) for all India Rural and Urban for December 2017 were at 5.08% and 4.71%, respectively, compared to 2.06% and 0.15%, respectively in December 2016. The index value of CFPI for combined stood at 139.70 for the month of December.

Food inflation remained volatile with prices falling in September and firming up from October, as eggs, vegetables, sugar and fruits became relatively more expensive. Vegetables prices grew 29.13% in December as compared with 22.48% a month ago, while prices of pulses and products continued to fall (-) 23.47%, as compared with (-) 23.53% in November. Besides, prices of milk-based products rose by 4.37% and Fruits prices increased by 6.63%. Among non-food categories, the fuel and light segment's inflation rate accelerated to 7.9% in October. Housing inflation grew 8.25% in December from 7.36% a month ago.

The CNX Nifty is currently trading at 10748.65, up by 67.40 points or 0.63% after trading in a range of 10713.80 and 10782.65. There were 19 stocks advancing against 30 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were HDFC up by 6.73%, ICICI Bank up by 3.05%, Ultratech Cement up by 2.57%, Zee Entertainment up by 2.11% and HDFC Bank up by 1.83%. On the flip side, Eicher Motors down by 2.61%, ONGC down by 1.97%, GAIL India down by 1.75%, HCL Tech. down by 1.74% and Hero MotoCorp down by 1.53% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 4.1 points or 0.22% to 1,826.77, KOSPI Index increased 7.31 points or 0.29% to 2,503.73, Nikkei 225 increased 61.06 points or 0.26% to 23,714.88 and Taiwan Weighted increased 72.35 points or 0.66% to 10,956.31. On the flip side, Hang Seng decreased 73.67 points or 0.23% to 31,338.87, Shanghai Composite decreased 18.45 points or 0.54% to 3,410.49 and Jakarta Composite decreased 4.02 points or 0.06% to 6,366.05.

All European markets were trading in red; Germany’s DAX decreased 29.69 points or 0.22% to 13,215.34, France’s CAC decreased 11.36 points or 0.21% to 5,505.70 and UK’s FTSE 100 decreased 3.75 points or 0.05% to 7,774.89.