Sensex, Nifty continue sluggish trade in green terrain

The local benchmarks continued their sluggish trade near neutral lines in late afternoon session, despite firm opening in European markets. Positive economic data along with higher Asian markets, helped the indices to keep their head above the water. India’s retail inflation cooled down to 5.07% in January 2018, due to easing prices of vegetables, fruits and fuel components, India’s industrial output registered a growth of 7.1% in the month of December 2017, as compared to 2.4% in December 2016, led by robust performance by manufacturing as well as higher offtake of capital goods and non-durable consumer goods. Traders were also taking support with the report that National Council of Applied Economic Research’s Business Confidence Index (BCI) registered a substantial increase of 9.1% in October-December of 2017, over July-September quarter, as overall sentiment regarding production, domestic sales, exports, imports of raw materials, and pre-tax profits remained buoyant. However, the trade was sluggish amid Care Ratings’ latest report indicating that India Inc witnessed much lower revenue growth in the third quarter of the current fiscal at 9.3% as against 17.7% in the previous year, on the back of factors like ongoing restocking process, adjustment to goods and services tax (GST) especially at the SME level, limited pick-up in demand and high base effect.

On the global front, European markets were trading in green, as investors monitored the release of corporate earnings and economic data. France’s Credit Agricole posted a 33% jump in profits for the final three months of 2017, as its investment banking unit outperformed in challenging market conditions. Asian markets were also trading in green. Back home, in scrip specific development, Bharat Heavy Electricals (BHEL) was trading in green after the company bagged a major order valued at Rs 560 crore for supply and installation of the Flue Gas Desulphurization (FGD) system from NTPC for 2x490 MW National Capital Power Station (NCPS) at Dadri in Uttar Pradesh.

The BSE Sensex is currently trading at 34319.08, up by 18.61 points or 0.05% after trading in a range of 34243.06 and 34473.43. There were 14 stocks advancing against 16 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.63%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Energy up by 1.23%, Industrials up by 1.07%, Capital Goods up by 0.97%, Realty up by 0.93% and Telecom up by 0.79%, while PSU down by 1.42%, Bankex down by 1.04%, Power down by 0.43%, Healthcare down by 0.32% and Utilities down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 2.69%, Wipro up by 2.64%, Coal India up by 2.50%, Reliance Industries up by 2.44% and Bharti Airtel up by 2.26%. On the flip side, Yes Bank down by 3.72%, SBI down by 3.64%, Axis Bank down by 2.85%, Sun Pharma down by 1.99% and Power Grid Corporation down by 1.49% were the top losers.

Meanwhile, credit rating agency, Care Ratings in its latest report ‘Corporate Performance: Q3-FY18’ has said that India Inc witnessed much lower revenue growth in the third quarter of the current fiscal at 9.3% as against 17.7% in the previous year, on the back of factors like ongoing restocking process, adjustment to goods and services tax (GST) especially at the SME level, limited pick-up in demand and high base effect.

As per the report, on year-on-year basis, net profit growth of the companies was also lower at 24.6% in Q3 FY18 as against 25.3% in Q3 FY17. However, the rating agency noted that overall net profit margin improved to 8.3% from 7.3% during reported period. Besides, other income also reported impressive growth in Q3, but it contributed less than 3% in total income.

Care Ratings further said that overall performance of India Inc in Q3 is on recovery path and consolidated picture is lower in terms of profit, which means that Q3 has been able to overwhelm the lower performance in the first two quarters. The rating agency estimated that if such performance continued to recover or improved in Q4, the corporates would join upward trajectory next year.

The report is based on the profitability numbers of a sample of 1,567 companies over the last two years and it excluded banks as they have extreme performance due to the non-performing asset (NPA) issue and also finance companies due to the high interest cost component.

The CNX Nifty is currently trading at 10550.40, up by 10.65 points or 0.10% after trading in a range of 10527.80 and 10590.55. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.19%, Indiabulls Housing Finance up by 2.98%, Adani Ports & SEZ up by 2.68%, Bajaj Finance up by 2.50% and Reliance Industries up by 2.36%. On the flip side, Yes Bank down by 3.89%, SBI down by 3.64%, Bharti Infratel down by 3.30%, Axis Bank down by 2.96% and HPCL down by 2.66% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.91 points or 0.1% to 1,834.93, Jakarta Composite increased 3.79 points or 0.06% to 6,581.97, Shanghai Composite increased 14.2 points or 0.45% to 3,199.16, KOSPI Index increased 26.64 points or 1.11% to 2,421.83 and Hang Seng increased 676.07 points or 2.27% to 30,515.60. On the flip side, Nikkei 225 decreased 90.51 points or 0.43% to 21,154.17.

All European markets were trading in green; France’s CAC increased 30.04 points or 0.59% to 5,139.28, UK’s FTSE 100 increased 42.35 points or 0.59% to 7,210.36 and Germany’s DAX increased 90.65 points or 0.74% to 12,287.15.