Benchmarks trade marginally in green on decent IIP, CPI data

Indian equity benchmarks are trading marginally in green in early deals on Tuesday with traders reacting positively to the IIP numbers, as strong manufacturing growth and a rebound in the consumer durables sector lifted India's total factory production to 7.5 percent in January from 7.1 percent in December. As per the street expectation it was likely to come at 6.6%. The cumulative growth for the period April-January 2017-18 over the corresponding period of the previous year stood at 4.1%. Some support also came with report that Inflation as measured by the CPI slowed to 4.44% in February from 5.07% in January, mostly due to easing food and fuel prices. Inflation in the food and beverages segment slowed to 3.38% in February from 4.58% in the previous month.

On the global front, Asian markets are trading mostly in red on Tuesday at this point of time, as Washington’s policies hit regional steel producers. The US markets closed mostly lower on Monday, weighed down by the industrials sector, while the Nasdaq closed at a record, in part due to optimism over Friday’s jobs data, which showed solid economic growth without triggering wage pressure.

Back home, some support came with report that foreign direct investment (FDI) has increased steadily in the country with total capital inflows reaching $208.99 billion during April 2014 to December 2017 period. The main sectors that received maximum foreign inflows include services, computer software and hardware, telecommunications, construction, trading and automobile. Defence related stocks remained buzzing after Defence Minister Nirmala Sitharaman said that defence public sector undertakings (PSUs) and ordnance factories in the country have a lot of potential but they need to be revitalised and made more dynamic.

The BSE Sensex is currently trading at 33962.25, up by 44.31 points or 0.13% after trading in a range of 33790.09 and 33987.48. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.77%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were PSU up by 1.06%, Bankex up by 0.99%, Oil & Gas up by 0.89%, Telecom up by 0.88% and Capital Goods was up by 0.64%, while Metal down by 0.94%, IT down by 0.90%, TECK down by 0.65% and Basic Materials was down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.04%, Wipro up by 1.70%, Axis Bank up by 1.47%, ICICI Bank up by 1.30% and Hero MotoCorp up by 1.02%. On the flip side, TCS down by 4.71%, Coal India down by 1.91%, NTPC down by 1.55%, ONGC down by 0.74% and Tata Steel down by 0.66% were the top losers.

Meanwhile, sustaining growth momentum, India’s industrial output surged to 7.5% in the month of January 2018, as compared to 3.5% in the same month of the previous year and 7.1% in December 2017. The growth was supported by robust manufacturing sector output. As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, IIP with base 2011-12 for the month of January 2018, stood at 132.3, which is 7.5% higher as compared to the level in the month of January 2017. The cumulative growth for the period April-January 2017-18 over the corresponding period of the previous year stood at 4.1%.

On the sectoral basis, manufacturing sector, which accounts for more than three-fourths of the entire index, soared 8.7% in January as compared to 2.5% in the same month of last year and 8.5% in December 2017. Electricity production showed an improvement, rising 7.6% in January, as compared to 5.1% a year ago and 4.4% in December. However, the mining sector recorded a sharp slowdown with 0.1% growth in January compared to 8.6% a year ago and 1.2% in December. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of January 2018 stood at 114.5, 133.8 and 149.5 respectively. The cumulative growth in these three sectors during April-January 2017-18 over the corresponding period of 2016-17 has been 2.5%, 4.3% and 5.3% respectively.

Capital goods, an indicator of investment activity, showed a sharp increase in output by 14.6% in January 2018 as against a decline of 0.6% a year ago. Consumer non-durable goods, which are mainly fast moving consumer goods, also recorded an increase of 10.5% as against a growth of 9.6% last year. Consumer durable goods recorded a growth rate of 8% in January against a contraction of 2% a year ago, while infrastructure/construction goods output grew 6.8% from 2.6% last year. The output of primary goods and intermediate goods also rose at higher pace of 5.8% and 4.9% respectively in the month under review over a year ago.

In terms of industries, 16 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of January 2018 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of other transport equipment’ has shown the highest positive growth of 33.1% followed by 27.8% in ‘Manufacture of furniture’ and 26.6% in ‘Manufacture of  motor vehicles, trailers and semi-trailers’. On the other hand, the industry group ‘Manufacture of tobacco products’ has shown the highest negative growth of (-) 46.5% followed by (-) 32.4% in ‘Othermanufacturing’ and (-) 13.2% in ‘Printing and reproduction of recorded media’.

The CNX Nifty is currently trading at 10441.05, up by 19.65 points or 0.19% after trading in a range of 10381.95 and 10442.30. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were HPCL up by 2.71%, BPCL up by 2.33%, SBI up by 2.25%, Wipro up by 1.86% and Bharti Infratel up by 1.66%. On the flip side, TCS down by 5.00%, Coal India down by 2.10%, NTPC down by 1.67%, Hindalco down by 1.14% and Vedanta down by 0.91% were the top losers.

Asian markets are trading mostly in red; Hang Seng slipped 86.57 points or 0.27% to 31,507.76, Jakarta Composite decreased 43.38 points or 0.67% to 6,457.31, Shanghai Composite shed 7.58 points or 0.23% to 3,319.12 and FTSE Bursa Malaysia KLCI was down by 3.16 points or 0.17% to 1,858.06.

On the flip side, KOSPI Index rose 4.33 points or 0.17% to 2,488.45, Nikkei 225 added 8.29 points or 0.04% to 21,832.32 and Taiwan Weighted was up by 77.79 points or 0.71% to 11,079.89.