Benchmarks trade with traction; Nifty reclaims 11,400 mark

Indian equity benchmarks made an optimistic start and are trading with traction, with frontline gauges recapturing their crucial 37,800 (Sensex) and 11,400 (Nifty) levels, on the back of good macro-economic data. The Central Statistics Office’s (CSO) data showed that India’s Retail inflation fell to nine-month low of 4.17% in July on account of slowdown in prices of vegetables and fruits. Its previous low was in October 2017 at 3.58%. Retail inflation, measured by Consumer Price Index (CPI) had hit a five-month high of 5% in June. Traders eyeing another macro data of wholesale price inflation for July scheduled to be release later in the day. Traders also took some encouragement with a private report that India’s foreign reserves are in a comfortable range and another 5-8% fall in reserves will not jeopardise the situation.

On the global front, Asian markets are trading mixed in early trade on Tuesday as the contagion from the economic crisis in Turkey remained relatively contained in developed markets overnight. The US markets ended lower on Monday, as the ongoing turmoil in Turkey dampened investors’ appetite for riskier assets.

Back home, aviation related stocks are exhibiting mixed trend despite ASSOCHAM’s statement that the aviation sector which was showing an immense promise till about a year ago, is facing head winds with most of the airlines battling a survival issue, hit by rising fuel costs and other expenses even as a cut - throat competition is making the aviation firms bleed. In scrip specific developments, Spice Mobility gained on getting approval to sell entire stake in WOS and Aditya Birla Capital surged on reporting 26% rise in Q1 consolidated net profit.

The BSE Sensex is currently trading at 37808.65, up by 163.75 points or 0.43% after trading in a range of 37689.71 and 37829.83. There were 21 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.49%, while Small cap index up by 0.69%.

The top gaining sectoral indices on the BSE were Realty up by 1.68%, Bankex up by 0.84%, FMCG up by 0.82%, Metal up by 0.68% and Consumer Durables was up by 0.68%, while Healthcare down by 0.04% was the lone losing index on BSE.

The top gainers on the Sensex were Axis Bank up by 2.10%, ITC up by 1.42%, Tata Steel up by 1.40%, ICICI Bank up by 1.31% and SBI was up by 1.24%. On the flip side, TCS down by 0.47%, Indusind Bank down by 0.32%, Mahindra & Mahindra down by 0.27%, Power Grid down by 0.21% and Sun Pharma was down by 0.19% were the top losers.

Meanwhile, snapping three-month rising trend, India’s retail inflation cooled down to 4.17% in the month of July 2018, mainly on the back of slowdown in prices of vegetables and fruits. This was lowest in nine months, while the previous low was in October 2017 at 3.58%. Inflation based on Consumer Price Index (CPI) for June has also been revised downwards to 4.92% from the earlier estimate of 5%. However, as for year-on-year comparison, retail inflation had increased by 2.36% in July last year. Besides, consumer food price inflation, a metric to gauge changes in monthly kitchen costs, eased to 1.37% in July, compared with 2.91% rise in the previous month. Though, it was higher as compared to (-) 0.36% July 2017.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base 2012=100 for July 2018, stood at 4.11%, 4.32% and 4.17% respectively, compared to 2.41% , 2.17% and 2.36% respectively in July 2017. The index value of CPI for combined stood at 139.8. The data also showed that Consumer Food Price Index (CFPI) for all India Rural and Urban for July 2018 stood at 2.18% and (-) 0.36%, respectively, compared to 0.07% and (-) 0.99%, respectively in July 2017. The index value of CFPI for combined stood at 140.2 for the month of July.

According to the data, among the food articles, inflation in vegetables declined by (-) 2.19% in July, compared to 7.80% in June. The rate of price rise in fruits slowed down 6.98%, as against 10.13% in the previous month. Pulses continued witness deflation and contracted (-) 8.91% in July from (-) 10.87% a month ago. The inflation in protein rich items like meat and fish, and also milk was also slower in July compared to the previous month. Inflation from pan, tobacco and other intoxicants fell to 6.34% in June from 8.05% a month ago. However, inflation in the ‘fuel and light’ segment based on the changes in the CPI increased to 7.96% from 7.14% in the previous month.

The CNX Nifty is currently trading at 11,406.40, up by 50.65 points or 0.45% after trading in a range of 11370.80 and 11409.90. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.15%, Axis Bank up by 2.07%, Tata Steel up by 1.49%, GAIL India up by 1.48% and SBI was up by 1.44%. On the flip side, UPL down by 1.14%, Indiabulls Housing down by 0.87%, Grasim Industries down by 0.48%, Indusind Bank down by 0.47% and Mahindra & Mahindra was down by 0.41% were the top losers.

Asian markets are trading in mixed; Straits Times slipped 5.54 points or 0.17% to 3,239.80, Shanghai Composite fall 14.06 points or 0.51% to 2,771.81, Hang Seng lost 249.58 points or 0.9% to 27,686.99 and Jakarta Composite was down by 10.30 points or 0.18% to 5,850.95.

On the flip side Taiwan Weighted advanced 49.86 points or 0.46% to 10,798.78, KOSPI jumped 9.36 points or 0.41% to 2,257.81 and Nikkei 225 was up by 397.30 points or 1.79% to 22,254.73.