Benchmarks trade in positive territory

Key equity benchmarks continued to trade in positive territory in morning session, buoyed by robust industrial output data amid mixed Asian cues. The markets took support from a report which state that India’s industrial production grew 4.90 percent in April, as compared with 4.40 percent in March. Investors ignored a private report which state that rising oil prices and accelerating growth in vast swathes of the economy created a situation akin to a 'tug of war', prompting the Indian central bank to raise benchmark rates for the first time in more than four years. It expanded 6 percent a year ago.  The traders overlooked a report stating that India's annual retail inflation accelerated in May to 4.87%, mainly driven by faster increases in fuel prices and a fall in the local currency, which pushes up prices of imported goods.

On the global front, Asian markets were trading mostly in red, as investors shifted their focus from the recently concluded US North Korea summit to the conclusion of the Federal Reserve's June meeting later in the day. Back home, traders also took some encouragement from Communications Minister Manoj Sinha statement that the new telecom policy is expected to be cleared by the Union Cabinet by the end of next month, he is hopeful of getting Cabinet approval on NDCP by end of July. In scrip specific development, Page Industries gained on extending license agreement with Jockey. Besides, Seamec advanced on concluding charter hire of vessel ‘Seamec III’ with Supreme Hydro Engineering on June 11, 2018. 

The BSE Sensex is currently trading at 35797.63, up by 105.11 points or 0.29% after trading in a range of 35715.96 and 35877.41. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.36%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.85%, Consumer Durables up by 1.17%, IT up by 1.16%, TECK up by 0.83% and Auto was up by 0.55%, while Telecom down by 0.72%, Oil & Gas down by 0.61%, Metal down by 0.28%, Energy down by 0.24% and Capital Goods was down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Dr Reddys Lab up by 4.24%, Sun Pharma up by 2.83%, Axis Bank up by 2.06%, TCS up by 2.02% and SBI was up by 1.63%. On the flip side, ONGC down by 1.25%, Tata Steel down by 1.07%, Hindustan Unilever down by 0.96%, HDFC down by 0.71% and Bharti Airtel was down by 0.63% were the top losers.

Meanwhile, India’s industrial production measured by Index of Industrial Production (IIP) grew at a faster rate of 4.9% in the month of April 2018 as against a growth rate of 3.2% in the same month of 2017. The factory output once again came back to growth trajectory, mainly on the back of pick-up in manufacturing as it contributes more than three-fourths to the index. In March of this year, industrial production had grown at 4.4%.

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 April 2018, stood at 123.0, which is 4.9% higher as compared to the level in the month of April 2017. The cumulative growth for the period April-March 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 5.2% in April as compared to the almost flat growth of 2.9% in the same month a year ago. Mining output also grew by 5.1% compared to 3.0% a year ago. However, electricity generation grew by 2.1% against a growth of 5.4% in the same month previous year. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of April 2018 stood at 103.8, 123.4 and 153.7 respectively. The cumulative growth in these three sectors during April-March 2017-18 over the corresponding period of 2016-17 has been 2.3 percent, 4.5 percent and 5.4 percent respectively.

Capital goods output, a proxy to measure private sector investment activity, surged by 13% in the month under review. Consumer durables output increased at 4.3% in April 2018, while consumer non-durables grew 7.0% in April. As per Use-based classification, the growth rates in April 2018 over April 2017 are 3.1% in Primary goods, 1.6% in Intermediate goods and 7.5% in Infrastructure/ Construction Goods.

In terms of industries, 16 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of April 2018 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of computer, electronic and optical products’ has shown the highest positive growth of 27.5% followed by 21.9% in ‘Manufacture of motor vehicles, trailers and semi-trailers’ and 15.7% in ‘Manufacture of food products’. On the other hand, the industry group ‘Other manufacturing’ has shown the highest negative growth of (-) 30.7% followed by (-) 13.4% in ‘Manufacture of wearing apparel’ and (-) 10.3% in ‘Printing and reproduction of recorded media’.
The CNX Nifty is currently trading at 10869.80, up by 26.95 points or 0.25% after trading in a range of 10842.65 and 10888.90. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Dr Reddys Lab up by 4.20%, Cipla up by 3.69%, Lupin up by 2.94%, Sun Pharma up by 2.90% and Axis Bank was up by 2.09%. On the flip side, Indiabulls Housing down by 1.99%, Zee Entertainment down by 1.41%, ONGC down by 1.40%, Tata Steel down by 1.12% and Vedanta was down by 1.08% were the top losers.

Asian market were trading mostly in red, Hang Seng slipped 192.46 points or 0.62% to 30,910.60, Shanghai Composite declined 23.11 points or 0.75% to 3,056.69 and FTSE Bursa Malaysia KLCI was down by 4.45 points or 0.25% to 1,759.71.

On the other side, Taiwan Weighted gained 26.36 points or 0.24% to 11,171.15 and Nikkei 225 was up by 109.26 points or 0.48% to 22,987.61.