Sensex, Nifty trade choppy amid rising inflation

Key Indian equity benchmarks were trading choppy in late afternoon deals, amid weak opening in European markets along with rising inflation data. India’s Wholesale price index (WPI) inflation surged to 5.13 percent in September from 4.53 percent in August, while retail inflation based on Consumer Price Index (CPI) inched up to 3.77% in the month of September 2018, as compared to a 10-month low of 3.69% recorded in August 2018. Domestic sentiments got further hit with a data report showing that listed Indian companies raised over Rs 2 lakh crore in April-September this fiscal through private placement of corporate bonds, registering a sharp decline of 38 per cent from the year-ago level. Adding some concerns, rating agency Moody's in its latest report said that Non-bank financial institutions (NBFI) will be significantly impacted if the liquidity distress in the country's capital markets, triggered by the default in September 2018 of IL&FS, prolongs for an extended period of time. Traders also took a note of RBI’s data report that the country's foreign exchange reserves declined by $ 915.8 million to $ 399.609 billion in the week to October 5 on account of a fall in foreign currency assets.

On the global front, European markets were trading in red, as Germany's consumer price inflation accelerated to its highest level in nearly seven years in September. According to the final data from Destatis, consumer prices advanced 2.3 percent on year, the fastest since November 2011, when inflation was 2.4 percent. Prices had advanced only 2 percent in August. Asian markets were trading in red, even though China's exports grew more-than-expected in September despite the worsening trade dispute with the US, but the increase in imports slowed, reflecting softening domestic demand. As per figures from the Customs Administration, exports grew 14.5 percent year-on-year in September, faster than the 9.8 percent increase seen in August and the expected increase of 8.8 percent. At the same time, imports advanced 14.3 percent annually compared to the forecast of 12.4 percent and August's 19.9 percent rise. As a result, the trade surplus increased to around $32 billion in September, but below the forecast of $38 billion.

The BSE Sensex is currently trading at 34721.16, down by 12.42 points or 0.04% after trading in a range of 34559.98 and 35008.65. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.75%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.69%, IT up by 1.33%, TECK up by 1.10%, Energy up by 0.64% and Power up by 0.29%, while Consumer Durables down by 1.74%, Metal down by 0.97%, Auto down by 0.95%, Consumer Disc down by 0.92% and Capital Goods down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.78%, Infosys up by 1.50%, Wipro up by 1.46%, ONGC up by 1.24% and Sun Pharma up by 1.09%. On the flip side, Mahindra & Mahindra down by 3.41%, Hindustan Unilever down by 3.29%, Indusind Bank down by 2.62%, Axis Bank down by 2.02% and ICICI Bank down by 1.99% were the top losers.

Meanwhile, with a sharp decline in the mining sector output and poor offtake of capital goods, India’s industrial production measured by Index of Industrial Production (IIP) slowed down to a three-month low of 4.3% in the month of August 2018, as compared to 6.6% in the previous month and 4.8% in the same of last year. The industrial growth is the lowest since May when industrial production grew at 3.9%.

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 August 2018, stood at 127.4, which is 4.3% higher as compared to the level in the month of August 2017. The cumulative growth for the period April-August 2018 over the corresponding period of the previous year stands at 5.2%.

On the sectoral basis, the mining sector production contracted by 0.4% in August compared to a growth of 9.3% in the year-ago month. Power generation grew at the rate of 7.6% in the month as against 8.3% in the year-ago month. However, the manufacturing sector output grew at 4.6% in August compared to 3.8% a year ago. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of August 2018 stand at 92.2, 129.8 and 167.2 respectively. The cumulative growth in these three sectors during April-August 2018 over the corresponding period of 2017 has been 3.9%, 5.4% and 5.8% respectively.

Besides, the capital goods output growth decelerated to 5% during the month from a 7.3% expansion year ago. As per Use-based classification, the growth rates in August 2018 over August 2017 are 2.6% in primary goods, 2.4% in intermediate goods and 7.8% in Infrastructure/ Construction Goods. The consumer durables and consumer non-durables have recorded growth rates of 5.2% and 6.3% respectively.

In terms of industries, 16 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of August 2018 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of furniture’ has shown the highest positive growth of 29.2% followed by 18.9% in ‘Manufacture of wearing apparel’ and 12.7% in ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’. On the other hand, the industry group ‘Printing and reproduction of recorded media’ have shown the highest negative growth of (-) 19.2% followed by (-) 17.0% in ‘Manufacture of tobacco products’ and (-) 7.3% in ‘Manufacture of computer, electronic and optical products’.

The CNX Nifty is currently trading at 10465.35, down by 7.15 points or 0.07% after trading in a range of 10410.15 and 10526.30. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 4.00%, Cipla up by 3.32%, BPCL up by 2.32%, ITC up by 2.07% and Infosys up by 1.63%. On the flip side, Mahindra & Mahindra down by 3.44%, Hindustan Unilever down by 3.34%, Indusind Bank down by 2.77%, Bajaj Finserv down by 2.76% and HPCL down by 2.66% were the top losers.

All Asian markets were trading in red; Nikkei 225 plunged 423.36 points or 1.9% to 22,271.30, Hang Seng dropped 356.43 points or 1.4% to 25,445.06, Taiwan Weighted lost 144.69 points or 1.46% to 9,901.12, Shanghai Composite decreased 38.82 points or 1.51% to 2,568.09, Jakarta Composite fell 24.11 points or 0.42% to 5,732.38, KOSPI dipped 16.73 points or 0.78% to 2,145.12 and Straits Times was down by 22.54 points or 0.74% to 3,046.63.
 
 All European markets were trading in red; UK’s FTSE 100 decreased 23.93 points or 0.34% to 6,971.98, France’s CAC fell 27.72 points or 0.55% to 5,068.26 and Germany’s DAX was down by 46.24 points or 0.4% to 11,477.57.