Sensex, Nifty continue sluggish trade

Indian equity benchmarks continued their sluggish trade in late afternoon session, despite firm opening in European markets. In line with larger peers, the broader indices too performed lackluster with the Small cap index falling more than a percent, while power index declined the most among all sectoral indices with losses of over 2%, followed by Utilities and PSU. Sentiments got hit after GST collections in May declined to Rs 940.16 billion from over Rs 1.03 trillion in April. As many as 6.247 million businesses filed their summary sales return GSTR-3B in the month of May. Anxiety remained among traders, as India’s manufacturing activity eased in the month of May, amid weaker expansions in output, new orders and employment. As per the survey report, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - slowed down to 51.2 in May from 51.6 in April.

However, downside remained capped on positive GDP data coupled with gains led by Auto and Energy stocks. Continuing its status as the world’s fastest-growing major economy, Indian economy beating all the estimates registered a growth of 7.7% for the fourth quarter of fiscal year 2017-18, highest in seven quarters. The growth was aided by rapid construction activity, manufacturing and consumer spending along with corporate investment. Separately, Union Finance Minister Piyush Goyal has asserted that nation’s economy is on the right track and set for even higher growth in the future. Some support also came with Moody’s Investors Service’s latest report that tax reforms are likely to expand revenue base in fast growing economies like India.

On the global front, European markets were trading in green, after Italy’s anti-establishment Five Star Movement and the far-right League reached a deal to form a populist government, helping avert the prospect of a snap election. However, gains were limited as the Trump administration said it would impose tariffs on steel and aluminum imported from Europe, Canada and Mexico. Asian markets were also trading in green. Back home, in scrip specific development, Idea Cellular was trading in green on completing sale of its pan-India standalone tower business, by way of divesting its entire stake in Idea Cellular Infrastructure Services (ICISL) (100% subsidiary of Idea), to ATC Telecom Infrastructure.

The BSE Sensex is currently trading at 35292.17, down by 30.21 points or 0.09% after trading in a range of 35205.83 and 35438.22. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.96%, while Small cap index was down by 1.40%.

The few gaining sectoral indices on the BSE were Auto up by 0.87%, Energy up by 0.19% and Telecom up by 0.11%, while Power down by 2.09%, Utilities down by 1.66%, PSU down by 1.40%, Basic Materials down by 1.12% and Realty down by 1.04% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 4.86%, Maruti Suzuki up by 3.47%, Tata Motors - DVR up by 2.83%, Hero MotoCorp up by 2.17% and ICICI Bank up by 1.80%. On the flip side, Tata Steel down by 2.72%, ONGC down by 2.54%, Power Grid Corporation down by 1.77%, Mahindra & Mahindra down by 1.62% and SBI down by 1.54% were the top losers.

Meanwhile, amid weaker expansions in output, new orders and employment, India’s manufacturing activity eased in the month of May. As per the survey report, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - slowed down to 51.2 in May from 51.6 in April. However, the reading remained above the watershed 50 mark indicating expansion.

According to the report, thought the output grew to continue expansion rally for tenth successive month on favourable demand conditions, rate of expansion slowed to a modest pace in May. Higher production witnessed in consumption and intermediate groups. Besides, new orders at manufacturing companies also surged in the reported month with enhanced marketing initiatives but at the modest pace. Indian manufacturers also reported the strongest gain in new export orders since February, aided by greater demands from international markets.

Besides, manufacturing employment increased softly, on account of greater production requirements.  However, outstanding business rose in May, on greater volumes of new business along with delay in payments by clients.  On the inflation front, both input and output price inflation picked-up to the strongest since February, with rising prices of raw materials such as oil and steel.

The CNX Nifty is currently trading at 10715.10, down by 21.05 points or 0.20% after trading in a range of 10685.75 and 10764.75. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 4.79%, Maruti Suzuki up by 3.49%, Hero MotoCorp up by 2.40%, Tata Motors up by 1.91% and Bharti Airtel up by 1.83%. On the flip side, Eicher Motors down by 3.77%, Tata Steel down by 2.80%, ONGC down by 2.75%, GAIL India down by 2.54% and Bajaj Finserv down by 2.26% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 15.95 points or 0.66% to 2,438.96, Hang Seng increased 24.35 points or 0.08% to 30,492.91 and Taiwan Weighted increased 74.12 points or 0.68% to 10,949.08. On the flip side, Nikkei 225 decreased 30.47 points or 0.14% to 22,171.35 and Shanghai Composite decreased 20.34 points or 0.66% to 3,075.14.

All European markets were trading in green; UK’s FTSE 100 increased 54.56 points or 0.71% to 7,732.76, France’s CAC increased 65.07 points or 1.21% to 5,463.47 and Germany’s DAX increased 118.03 points or 0.94% to 12,722.92.