Benchmarks trade in fine fettle in early deals

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals as reports on industrial output and retail inflation painted a positive picture of the economy. India’s industrial output grew 7.1 percent year-on-year in February, bigger than the expected 6.8 percent expansion. The cumulative growth for the period April-February 2017-18 over the corresponding period of the previous year stood at 4.3%. India’s Consumer Price Index (CPI) for the month of March came to 4.28% as compared to 4.44% in February. CPI food inflation for March also eased substantially to 2.81% versus 3.26% in last month. Traders also took some encouragement with report that the Confederation of Indian Industry (CII) is expecting India’s gross domestic product (GDP) to grow at 7.3-7.7 per cent during the 2018-19 financial year. This is based on strengthening demand in the rural economy, including agriculture and non-farm activities, as well as better global growth climate.

On the global front, Asian markets are exhibiting mixed trend at this point of time, while the U.S. stocks edged higher on Thursday as President Donald Trump sought to downplay concerns about an attack on Syria. Some support also came with report that initial jobless claims fell to 233,000, a decrease of 9,000 from the previous week's unrevised level of 242,000.

Back home, software related stocks remained buzzing as Infosys will unveil its Q4 earnings later in the day, with street expecting the IT firm to post good numbers compared to the previous year and signal better growth ahead. In scrip specific development, NBCC edged higher on inking MoU with SDI to construct training institute and Texmaco Rail advanced on incorporating subsidiary company ‘TSPL’.

The BSE Sensex is currently trading at 34217.84, up by 116.71 points or 0.34% after trading in a range of 34154.94 and 34238.44. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.57%, while Small cap index up by 0.65%.

The top gaining sectoral indices on the BSE were Telecom up by 1.23%, Realty up by 0.78%, Bankex up by 0.75%, Basic Materials up by 0.64% and Consumer Discretionary Goods & Services up by 0.60%, while IT down by 0.17% and Capital Goods was down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Adani Ports up by 2.59%, Bharti Airtel up by 1.45%, Kotak Mahindra Bank up by 1.35%, ICICI Bank up by 1.27% and Dr. Reddys Lab up by 1.18%. On the flip side, Hindustan Unilever down by 0.60%, Tata Motors - DVR down by 0.37%, Larsen & Toubro down by 0.36%, Tata Motors down by 0.29% and Infosys down by 0.15% were the top losers.

Meanwhile, India’s industrial production measured by Index of Industrial Production (IIP) grew at a faster rate of 7.1% in the month of February 2018 as against a growth rate of 1.2% in the same month of 2017. The factory output maintained its high growth for the fourth month in a row, mainly on the back of robust performance of the manufacturing sector coupled with higher offtake of capital goods and consumer durables. Though, the pace of growth has slowed down as compared to 7.4% in January 2018, due to contraction in mining 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 February 2018, stood at 127.7, which is 7.1% higher as compared to the level in the month of February 2017. The cumulative growth for the period April-February 2017-18 over the corresponding period of the previous year stood at 4.3%.

On the sectoral basis, the manufacturing sector, which constitutes over 77% of the index, grew at 8.7% in February as compared to the almost flat growth of 0.7% in the same month a year ago. Electricity generation also grew by 4.5% compared to 1.2% a year ago. However, mining output contracted by 0.3% against a growth of 4.6% in the same month previous year. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of February 2018 stand at 110.2, 130.1 and 136.1, respectively. The cumulative growth in these three sectors during April-February 2017-18 over the corresponding period of 2016-17 has been 2.3%, 4.6% and 5.2%, respectively.

Capital goods output, a proxy to measure private sector investment activity, surged by 20% in the month under review as compared to a contraction of 2.4% in the same month a year ago. Consumer durables output increased at 7.9% in February 2018 as compared to de-growth of 4.6% in February 2017, while consumer non-durables grew 7.4% in February from 10.4% growth in a year ago period. As per Use-based classification, the growth rates in February 2018 over February 2017 are 3.7% in primary goods, 3.3% in intermediate goods and 12.6% in infrastructure/construction goods.

In terms of industries, 15 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of February 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 32.0% followed by 26.9% in ‘Manufacture of machinery and equipment n.e.c.’ and 19.9% in ‘Manufacture of motor vehicles, trailers and semi-trailers’. On the other hand, the industry group ‘Other manufacturing’ has shown the highest negative growth of (-) 27.3% followed by (-) 9.4% in ‘Printing and reproduction of recorded media’ and (-) 8.2% in ‘Manufacture of rubber and plastics products’.

The CNX Nifty is currently trading at 10490.75, up by 32.10 points or 0.31% after trading in a range of 10475.80 and 10497.85. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Adani Ports up by 2.54%, Indiabulls Housing up by 1.95%, Bharti Infratel up by 1.89%, Eicher Motors up by 1.45% and Bharti Airtel up by 1.43%. On the flip side, HCL Tech down by 1.54%, BPCL down by 0.66%, Bajaj Finserv down by 0.61%, Hindustan Unilever down by 0.55% and Tech Mahindra down by 0.52% were the top losers.

Asian markets are trading mixed; Taiwan Weighted rose 10.94 points or 0.1% to 10,966.23, KOSPI Index gained 12.77 points or 0.52% to 2,455.48 and Nikkei 225 up by 111.99 points or 0.52% to 21,772.27.

On the flip side, Hang Seng slipped 24.1 points or 0.08% to 30,807.18, Shanghai Composite decreased 12.27 points or 0.39% to 3,167.89, Jakarta Composite dropped 6.41 points or 0.1% to 6,304.39 and FTSE Bursa Malaysia KLCI down by 3.11 points or 0.17% to 1,870.51.