Benchmarks end flat ahead of CPI, IIP data

Indian equity benchmarks ended the volatile day of trade almost flat, as traders remained on sidelines ahead of Index of Industrial Production (IIP) and Consumer Price Index (CPI) data to be released on July 12, 2018. Markets traded between green and red terrain throughout the session and ended with negligible gains, keeping their head above water on Tuesday, as traders took some support with report that the Global Innovation Index (GII) has ranked India as the 57th most innovative nation in the world. The country has improved its ranking from 60th position last year. India has been improving steadily since it was ranked 81st in 2015. Investors’ sentiments got improved as updated World Bank figures for 2017 showed that India is now the world's sixth-biggest economy, having muscled past France, which was pushed to the seventh spot. India's gross domestic product (GDP) stood at $2.597 trillion at the end of 2017, compared to $2.582 trillion for France. Market participants also got some support with union minister for electronics and IT Ravi Shankar Prasad’s statement that India is the third largest investor in the United Kingdom and emerged as the second largest international job creator with Indian companies having created over 110,000 jobs in the UK in recent months. The domestic sentiments also remained upbeat with a report that India and South Korea have inked 11 MoUs, including an agreement to discuss upgrade of the Comprehensive Economic Partnership Agreement (CEPA), with an aim to increase bilateral trade to $50 billion by 2030.

However, gains remained capped as traders remain concerned with India’s G-20 Sherpa Shaktikanta Das, expressing concern over increasing protectionism and trade conflicts across the world, said that countries ought to work out arrangements that are beneficial to all in the larger interest of reviving global growth. Some cautiousness crept in with a private report stating that Indian inflation likely rose to a near two-year high in June, driven by surging oil and food prices, a development that would strengthen calls for more monetary policy tightening by the Reserve Bank of India.

On the global front, European markets were trading in red in early deals on Wednesday, after US authorities unveiled a new list of Chinese products that could see tariffs. Asian markets ended mostly in red, following the release of a list of an additional $200 billion in Chinese goods on which the US is considering imposing tariffs.

Back home, stocks related to software pack edged higher after Tata Consultancy Services (TCS), India’s biggest software services exporter, posted a better-than-expected 23% jump in first-quarter net profit to Rs 7,340 crore, buoyed by robust growth at the banking, financial services and insurance (BFSI) and digital verticals. Telecom stocks ended lower despite ICRA stating that Indian telecom industry, which is witnessing intense competition and pricing pressures, is likely to stabilize in a few quarters. It also said that as the competitive intensity is expected to moderate as the merged Vodafone and Idea stabilize, and the subscriber base of the existing operators diminishes. Furthermore, Textile sector was in limelight after the Gujarat government finally announced a new scheme for the employment-intensive textile sector, under which a part of the SGST (state goods & services tax) will be reimbursed, in lieu of VAT incentives promised in the Textile Policy 2012.

Finally, the BSE Sensex gained 26.31 points or 0.07% to 36,265.93, while the CNX Nifty was up by 1.05 points or 0.01% to 10,948.30.

The BSE Sensex touched a high and a low of 36,362.30 and 36,169.70, respectively and there were 10 stocks advancing against 21 stocks declining on the index.
The broader indices ended in red; the BSE Mid cap index lost 0.67%, while Small cap index was down by 0.33%.

The top gaining sectoral indices on the BSE were IT up by 2.38%, TECK up by 1.94%, Realty up by 0.55%, FMCG up by 0.43% and Energy was up by 0.12%, while Metal down by 3.10%, Basic Materials down by 1.69%, PSU down by 1.57%, Auto down by 0.99% and Industrials was down by 0.83% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 5.47%, Bajaj Auto up by 2.11%, Hindustan Unilever up by 1.59%, Infosys up by 1.37% and Reliance Industries up by 1.03%. On the flip side, Coal India down by 4.59%, Vedanta down by 3.52%, Tata Motors down by 2.74%, Tata Steel down by 2.24% and Tata Motors - DVR down by 2.18% were the top losers.

Meanwhile, highlighting promising future with India’s growing digital economy, large size of the market, demographic dividend and passion for technology, IT Minister Ravi Shankar Prasad has said that the country offers host of business opportunities for UK investors, especially in the digital arena.

The minister further noted that the country’s digital economy also spawn opportunities in emerging areas like Artificial Intelligence and Internet of Things, start-up movement and low-cost cyber security solutions. He also mentioned that ‘while we work out the details, no one doubts the potential to make India’s digital economy worth $1 trillion, employing 5-7 million people in the next 5-7 years.'

The Minister also listed opportunities existed in areas like 'green innovation' and digital networks that are secure. Besides, he said that India and the UK share a ‘modern partnership’ cemented by strong historical ties and education and science & technology are amongst the notable areas of bilateral relationship.

India is the third largest investor in the UK and emerged as the second largest international job creator with Indian companies having created over 110,000 jobs in the UK in recent months, while The United Kingdom is also the fourth largest investor in India.

The CNX Nifty traded in a range of 10,976.65 and 10,923.00. There were 20 stocks in green as against 30 stocks in red on the index.

The top gainers on Nifty were TCS up by 5.06%, Bharti Infratel up by 3.18%, Bajaj Auto up by 2.43%, Hindustan Unilever up by 1.83% and RIL up by 1.39%. On the flip side, UPL down by 5.40%, Coal India down by 4.67%, Hindalco down by 3.67%, Vedanta down by 3.47% and Tata Motors down by 2.78% were the top losers.

European markets were trading in red; Germany’s DAX decreased 166.63 points or 1.34% to 12,443.22, UK’s FTSE 100 declined 90.84 points or 1.20% to 7,601.20 and France’s CAC was down by 66.74 points or 1.24% to 5,367.62.

Asian equity markets ended mostly lower on Wednesday due to selling pressure after the US proposed tariffs on an extra $200 billion of Chinese goods and China vowed to take countermeasures, without elaborating further. Chinese shares ended lower and the yuan drifted lower on worries the ongoing trade row could hurt economic growth. Further, Japanese shares ended lower to snap a three-day winning streak as fears about the global economic outlook due to the escalating trade war weighed on shippers and machinery makers. Core machine orders in Japan fell 3.7 percent sequentially in May, the Cabinet Office said - coming in at 907.9 billion yen. The headline figure beat expectations for a decline of 4.9 percent following the 10.1 percent spike in April. On a yearly basis, machine orders surged 16.5 percent - again topping forecasts for 10.9 percent following the 9.6 percent jump in the previous month.