Markets trim some losses; continue to trade in red

The local equity benchmarks trimmed some of their losses in late afternoon session but continue to trade below the neutral lines, on account of weak global cues. Slower growth in India’s manufacturing sector along with decline in GST collection, kept the markets under pressure. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - slowed down to 52.1 in February from 52.4 in January, while the total revenue mop-up under GST slipped by 0.44% to Rs 86,318 crore in January 2018 as compared to Rs 86,703 crore in December 2017. Besides, banking index declined the most among all the sectoral indices, followed by Capital Goods and Metal. However, the indices managed to pare losses, with taking support from Finance Minister Arun Jaitley’s statement that India has the potential to beat a growth rate of 7-8 percent and it will continue to remain one of the fastest growing economies in the world. Some relief also came with Moody's Investors Service’s report that India will grow 7.6 percent in calendar year 2018 and 7.5 percent in 2019, amid signs of economic recovery from impact of demonetisation and GST.

On the global front, European markets were trading in red, after new Fed Chairman Jerome Powell laid out a case for a faster pace of interest-rate increases, saying that further gradual increases in interest rates would be appropriate to attain objectives of maximum employment and stable consumer prices. Asian markets were also trading in red. Back home, in scrip specific development, Hero MotoCorp traded higher after the company accomplished a significant feat this month by crossing over ‘One Million Registrations’ for its unique after-sales service offering - Hero Joyride Program.

The BSE Sensex is currently trading at 34252.39, down by 94.00 points or 0.27% after trading in a range of 34076.45 and 34253.60. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.26%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were IT up by 1.35%, TECK up by 0.99%, Consumer Durables up by 0.19% and Auto up by 0.15%, while Bankex down by 0.96%, Capital Goods down by 0.89%, Metal down by 0.89%, FMCG down by 0.70% and Power down by 0.56% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.20%, Dr. Reddy’s Lab up by 1.10%, Asian Paints up by 0.92%, ONGC up by 0.74% and Hero MotoCorp up by 0.69%. On the flip side, Axis Bank down by 1.86%, ICICI Bank down by 1.81%, Larsen & Toubro down by 1.54%, Hindustan Unilever down by 1.43% and Yes Bank down by 1.12% were the top losers.

Meanwhile, falling to 4-month low, India’s manufacturing sector activity signaled a slightly slower growth in February month, as output and new orders increased at slower rates. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - slowed down to 52.1 in February from 52.4 in January. However, the reading signaled an expansion for the seventh consecutive month, remained above the no-change mark of 50.0.

As per the survey report, total new orders grew for the fourth successive month but at the slower rate. Besides, the employment growth also increased at modest rate but slightly faster rate than at the start of 2018, as firms raised their staffing levels in line with greater production requirements. The firms also raised their purchasing activity, on the back of improved demand conditions but the rate of expansion eased to the weakest since October’s fall and was marginal.

On the price front, rising input costs continued to spark cost pressures on manufacturers and in order to pass on their cost burdens to clients, firms raised output charges thereby extending the period of inflation to seven months. The survey found that the input costs increased for the twenty-ninth month during February, with higher prices seen in the products such as steel, chemicals and fuel, while output price inflation was the sharpest since last February, although it’s modest.

The CNX Nifty is currently trading at 10515.45, down by 38.85 points or 0.37% after trading in a range of 10461.55 and 10521.00. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.16%, UPL up by 1.49%, Eicher Motors up by 1.36%, Dr. Reddy’s Lab up by 1.06% and Asian Paints up by 0.87%. On the flip side, HPCL down by 3.41%, Vedanta down by 2.61%, ICICI Bank down by 2.45%, Axis Bank down by 1.91% and Hindustan Unilever down by 1.62% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 423.94 points or 1.36% to 30,844.72, Nikkei 225 decreased 321.62 points or 1.44% to 22,068.24, Shanghai Composite decreased 32.66 points or 0.99% to 3,259.41, KOSPI Index decreased 28.78 points or 1.17% to 2,427.36 and FTSE Bursa Malaysia KLCI decreased 9.26 points or 0.49% to 1,862.20. On the flip side, Jakarta Composite increased 5.43 points or 0.08% to 6,604.36.

All European markets were trading in red; Germany’s DAX decreased 40.69 points or 0.33% to 12,450.04, UK’s FTSE 100 decreased 25.92 points or 0.36% to 7,256.53 and France’s CAC decreased 19.17 points or 0.36% to 5,324.76.