Lackluster trade continues on Dalal Street

Key Indian benchmarks continued their lackluster trade in late afternoon session, with both Sensex and Nifty trading below their neutral lines, tracking weak Asian markets.  Heavy selling pressure at Metal, Realty and Basic Materials counters along with sluggish industry leaders such as Sun Pharma, Tata Steel and ICICI Bank, weighed on the sentiments. The domestic sentiments also remained downbeat, as the growth of eight core infrastructure industries slowed to three-month low of 4.1% in March 2018, as compared to 5.3% in February 2018, on account of weak performance in as many as six sectors including coal, crude oil and natural gas. Traders got cautious with Moody’s Investors Service latest report stating that the Reserve Bank of India's (RBI) push banks to recognize problem assets more accurately will reduce profitability of banks in the near term. It said that increased provisioning will hurt the banks' profitability, and weaker public sector banks (PSBs) in particular will continue to report losses in the next fiscal year (FY19), adding pressure on their capital ratios. Besides, in line with sluggish larger peers, the broader markets too declined with the losses of over a percent. However, further down move were restricted with a report that the Indian manufacturing activity expanded further in April, on the back of faster expansions in output and new orders, signaling a faster improvement in business conditions across the country’s goods-producing sector compared to the previous March month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 51.6 in April from 51.0 in March.

On the global front, European markets were trading in green, as investors kept their focus on earnings and monitored an upcoming Federal Reserve meeting. However, Asian markets were trading in red. Back home, in scrip specific development, Shivam Autotech gained after the company achieved around 18% increase in sales in the month of April 2018 compared to corresponding month in the previous financial year.

The BSE Sensex is currently trading at 35138.72, down by 21.64 points or 0.06% after trading in a range of 35113.53 and 35357.15. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.13%, while Small cap index was down by 1.03%.

The only gaining sectoral indices on the BSE were Energy up by 0.36% and FMCG up by 0.28%, while Metal down by 3.02%, Realty down by 1.90%, Basic Materials down by 1.78%, PSU down by 1.28% and Consumer Durables down by 1.28% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 3.64%, ITC up by 2.10%, HDFC Bank up by 1.47%, HDFC up by 1.32% and Asian Paints up by 1.30%. On the flip side, Sun Pharma down by 3.06%, Tata Steel down by 2.93%, ICICI Bank down by 2.64%, SBI down by 2.40% and Yes Bank down by 2.36% were the top losers.

Meanwhile, signaling a faster improvement in business conditions across the country’s goods-producing sector compared to the previous March month, the Indian manufacturing activity expanded further in April, on the back of faster expansions in output and new orders. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 51.6 in April from 51.0 in March. Besides, the reading remained above the watershed 50 mark indicating expansion for the ninth consecutive month.

As per the survey report, the output picked-up from March’s five-month low with solid expansion on account of favourable demand conditions but it was slightly below the average for the current nine-month period of expansion. The report further showed that the new business grew for the sixth consecutive month at a modest rate , while the new export orders also rose for the sixth successive month in April, albeit only marginally. It also found that outstanding work rose during April and delayed payments from clients partly led to the latest increase in backlogs.

On the price front, the inflationary pressures continued to ease in the reported month, as input costs and output charges rose at the softer pace and were weakest since September 2017 and July 2017, respectively. Further, payroll numbers also got improved during April on greater production requirements coupled with improved demand conditions, however the growth was marginal.

The CNX Nifty is currently trading at 10723.05, down by 16.30 points or 0.15% after trading in a range of 10715.50 and 10784.65. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 3.71%, Zee Entertainment up by 2.22%, ITC up by 2.01%, Asian Paints up by 1.75% and HDFC Bank up by 1.35%. On the flip side, Vedanta down by 4.57%, HCL Tech. down by 4.42%, Sun Pharma down by 3.15%, Hindalco down by 3.12% and Tata Steel down by 2.92% were the top losers.

All Asian markets were trading in red; Hang Seng fell 84.57 points or 0.27% to 30,723.88, Taiwan Weighted was down by 39.07 points or 0.37% to 10,618.81, Nikkei 225 lost 35.25 points or 0.16% to 22,472.78, FTSE Bursa Malaysia KLCI decreased 17.41 points or 0.93% to 1,852.96, KOSPI Index plunged by 9.77 points or 0.39% to 2,505.61, Jakarta Composite declined by 4.3 points or 0.07% to 5,990.30 and Shanghai Composite was down by 1.05 points or 0.03% to 3,081.18.

All European Markets were trading in green, France’s CAC was up by 13.4 points or 0.24% to 5,533.90, UK’s FTSE 100 increased 41.83 points or 0.56% to 7,562.19 and Germany’s DAX surged 137.8 points or 1.09% to 12,749.91.