Benchmark indices turn negative on weak manufacturing PMI

Benchmark indices have turned negative with Sensex and Nifty giving up all of their gains in the early noon session, as investors remained on sidelines ahead of RBI Policy outcome, due later in the day today. Sentiments turned negative with report showing that the country's manufacturing sector activity moderated in July amid softer increase in output, new orders and employment. The Nikkei India Manufacturing Purchasing Managers Index (PMI) stood at 52.3 in July, down from 53.1 in June. Besides, Realty, Auto and Bankex sectors were mainly pulling the markets lower. However, buying in oil & gas, Energy and Healthcare stocks were keeping a lid on the losses. Losses also remained limited with report highlighting that infrastructure industries grew to a seven-month high of 6.7% in June buoyed by an expansion in output of cement, refinery and coal, keeping a lid on the losses of the bourses. On the sectoral front, Auto related stocks remain in focus as the companies release their sales numbers for July.

On the global front, most of the Asian counters were trading in green following the positive cues from Wall Street amid news that the U.S. and China are trying to restart talks to avert a full-blown trade war. Back home, the government sought Parliament’s approval for additional gross additional expenditure of Rs 11,697.92 crore for the current fiscal. In scrip specific development, shares of Tata Motors dipped after the company reported a loss of Rs 1,864 crore in June quarter (Q1FY19). While, Ashok Leyland jumped on reporting 27% growth in July sales.

The BSE Sensex is currently trading at 37533.32, down by 73.26 points or 0.19% after trading in a range of 37531.59 and 37711.87. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.30%, while Small cap index up by 0.20%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.84%, Energy up by 0.67%, Healthcare up by 0.63%, IT up by 0.32%, TECK up by 0.31%, while Realty down by 0.83%, Auto down by 0.71%, Bankex down by 0.48%, Power down by 0.28% and Consumer Durables down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.56%, Sun Pharma up by 1.36%, Coal India up by 0.94%, Bajaj Auto up by 0.90% and ONGC up by 0.73%. On the flip side, Tata Motors down by 2.33%, Tata Motors - DVR down by 2.25%, Maruti Suzuki down by 1.73%, Axis Bank down by 1.54% and ICICI Bank down by 0.97% were the top losers.

Meanwhile, the growth of eight core infrastructure industries surged to seven-month high of 6.7% in June 2018, as compared to 3.6% in May 2018, aided by a robust performance in cement, refinery and coal segments. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 129.8 in June, 2018, which was 6.7% higher compared to the index of June, 2017. Its cumulative growth during April to June, 2018-19 was 5.2%. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).  

Among eight core sectors, Coal production having 10.33% weight rose 11.5% in June, 2018 over June, 2017, and its cumulative index increased by 13.2% during April to June, 2018-19 over corresponding period of the previous year. Petroleum Refinery production having 28.04% weight increased 12.0% in June, 2018 over June, 2017 and its cumulative index surged by 6.6% during April to June, 2018-19 over the corresponding period of previous year.

The Natural Gas production having 6.88% weight declined by 2.7% in June, 2018 over June, 2017, while its cumulative index was up by 0.4% during April to June, 2018-19 over the corresponding period of previous year. On the flip side, Steel production having 17.92% weight jumped by 4.4% in June, 2018 over June, 2017 and its cumulative index increased by 2.9% during April to June, 2018-19 over the corresponding period of previous year.

Fertilizer production having 2.63% weight increased by 1.0% in June, 2018 over June, 2017, and its cumulative index rose by 4.5% during April to June, 2018-19 over the corresponding period of previous year. Cement production having 5.37% weight jumped 13.2% in June, 2018 over June, 2017 and its cumulative index increased by 14.2% during April to June, 2018-19 over the corresponding period of previous year. On the other hand, Crude Oil production having 8.98% weight declined by 3.4% in June, 2018 over June, 2017 and its cumulative index fell by 2.4% during April to June, 2018-19 over the corresponding period of previous year.

The CNX Nifty is currently trading at 11349.45, down by 7.05 points or 0.06% after trading in a range of 11343.95 and 11390.55. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were HPCL up by 3.09%, Bajaj Finance up by 2.10%, BPCL up by 1.73%, Indian Oil Corporation up by 1.73% and Lupin up by 1.70%. On the flip side, Eicher Motors down by 2.17%, Tata Motors down by 2.08%, Maruti Suzuki down by 2.05%, Indiabulls Housing down by 1.64% and Axis Bank down by 1.51% were the top losers.

Asian markets were trading mostly in green; Jakarta Composite increased 64.36 points or 1.07% to 6,000.80, Taiwan Weighted increased 40.62 points or 0.37% to 11,098.13, KOSPI increased 9.21 points or 0.4% to 2,304.47, Nikkei 225 increased 192.98 points or 0.85% to 22,746.70 and Straits Times increased 6.82 points or 0.21% to 3,326.67.

On the contrary, Hang Seng decreased 69.82 points or 0.24% to 28,513.19 and Shanghai Composite decreased 21.99 points or 0.77% to 2,854.41.