Bulls continue to roar on Dalal Street in early deals

Bulls tightened their grip on Dalal Street and are trading in fine fettle in early deals on Friday, with Sensex trading at its all-time high and Nifty surpassing 11,050 mark following global markets ahead of information technology (IT) heavyweight Infosys June quarter earnings later in the day. Sentiments remained up-beat with traders getting some encouragement from Finance Minister Arun Jaitley’s statement that India could soon emerge as the world’s fifth largest economy if it continues to maintain its current pace of growth. Traders shrugged off the Central Statistics Office’s (CSO) data highlighting that Retail inflation soared to five-month high of 5% in June compared to 4.87% in May, on the back of a depreciating rupee and skyrocketing fuel prices, while India’s Industrial Production (IIP) declined to a seven-month low of 3.2% in May as compared to 4.8% in April, mainly due to slow manufacturing activity and sluggish performance of power and FMCG sector.

Global cues too remained supportive with most of the Asian counters trading in green at this point of time as some relief coming from the lack of escalation in trade tensions between the US and China. The US markets ended higher on Thursday, as Wall Street’s appetite for risk improved on signs China is willing to make concessions to avert a trade war.

Back home, traders shrugged off report that the Organisation for Economic Cooperation and Development’s (OECD) statement that big emerging economies like China and India will suffer more than developed countries if trade tariffs return to 1990 levels. In scrip specific developments, Shriram Transport Finance surged on getting approval to raise funds via NCDs and Varroc Engineering gained with arm getting nod for setting up new facilities in India, Poland.

The BSE Sensex is currently trading at 36699.86, up by 151.45 points or 0.41% after trading in a range of 36584.28 and 36738.80. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.07%, while Small cap index was down by 0.18%.

The top gaining sectoral indices on the BSE were Energy up by 1.10%, IT up by 0.90%, TECK up by 0.61%, Capital Goods up by 0.48% and Oil & Gas was up by 0.36%, while Telecom down by 1.16%, PSU down by 0.42%, Healthcare down by 0.29%, Power down by 0.29% and Realty was down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.06%, Coal India up by 1.75%, Adani Ports up by 1.58%, Reliance Industries up by 1.55% and Infosys up by 1.22%. On the flip side, SBI down by 1.43%, ICICI Bank down by 1.32%, Bajaj Auto down by 0.86%, Hero MotoCorp down by 0.63% and ONGC down by 0.53% were the top losers.

Meanwhile, with sluggish performance of manufacturing and power sectors coupled with poor offtake of fast moving consumer goods (FMCG), India’s industrial production measured by Index of Industrial Production (IIP) declined to a seven-month low of 3.2% in the month of May 2018, as compared to a revised 4.8% growth in April, though it is higher than 2.9% in May last year. The previous low of industrial production growth was 1.8% in October 2017. Besides, the factory output growth was revised down to 4.8% in April from previous estimates of 4.9%.

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 May 2018, stood at 128.8, which is 3.2% higher as compared to the level in the month of May 2017. The cumulative growth for the period April-May 2018 over the corresponding period of the previous year stood at 4.0%.

On the sectoral basis, the manufacturing sector, which constitutes 77.63% of the index, grew by just 2.8% in May 2018, marginally up from 2.6% in the corresponding period last year. The mining sector output recorded an impressive growth of 5.7% in May as against 0.3% in May last year. However, electricity sector growth decelerated sharply to 4.2% during the month as compared to a high of 8.3% year ago. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of May 2018 stand at 107.5, 129.1 and 164.7 respectively. The cumulative growth in these three sectors during April-May 2018 over the corresponding period of 2017 has been 4.9%, 4.0% and 3.1% respectively.

The data also showed that the consumer non-durables sector was the worst performer among the user based goods segment, as its output declined by 2.6% as against a growth of 9.7% year ago. As per Use-based classification, the growth rates in May 2018 over May 2017 are 5.7% in primary goods, 7.6% in capital goods, 0.9% in intermediate goods and 4.9% in infrastructure/construction goods. The consumer durables has recorded growth of 4.3% in the month under review.

In terms of industries, 13 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of May 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 27.0% followed by 21.1% in ‘Manufacture of motor vehicles, trailers and semi-trailers’ and 13.2% in ‘Manufacture of furniture’. On the other hand, the industry group ‘Other manufacturing’ has shown the highest negative growth of (-) 31.9% followed by (-) 15.6% in ‘Manufacture of tobacco products’ and (-) 12.8% in ‘Manufacture of wearing apparel’.

The CNX Nifty is currently trading at 11063.45, up by 40.25 points or 0.37% after trading in a range of 11035.15 and 11071.35. There were 25 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Wipro up by 3.42%, Coal India up by 1.77%, Reliance Industries up by 1.60%, Adani Ports up by 1.50% and Bajaj Finance up by 1.48%. On the flip side, Bharti Infratel down by 3.26%, UPL down by 2.23%, HCL Tech down by 1.44%, SBI down by 1.43% and ICICI Bank down by 1.19% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 increased 472.01 points or 2.08% to 22,659.97, Taiwan Weighted increased 103.81 points or 0.96% to 10,842.19, Straits Times increased 8.44 points or 0.26% to 3,261.45, Jakarta Composite increased 43.49 points or 0.73% to 5,951.36, Hang Seng increased 164.87 points or 0.58% to 28,645.70 and KOSPI increased 23.49 points or 1.02% to 2,308.55. On the flip side, Shanghai Composite decreased 3.27 points or 0.12% to 2,834.39.