Benchmarks trade flat in early deals on Tuesday

Indian equity benchmarks are trading flat in early deals on Tuesday tracking weakness in global markets. Traders remained cautious with report that industrial output grew at the slowest pace in four months at 4.5% in September 2018, as the festival season started late this year compared to 2017. Growth faltered as the output of capital goods and mining expanded at a slower pace in September than in the previous month. However, market participants are getting some support with the consumer price index (CPI) inflation easing to 3.31 percent in the month of October 2018 as compared to 3.58 percent in October 2017 on low food prices. The retail inflation number is the lowest since September 2017 when it touched 3.28 percent. Also, the prices of vegetables fell by 8.06 percent in the month of October in comparison to a 4.15 percent contraction in September.

On the global front, Asian markets are trading mostly in red at this point of time with Japanese Nikkei trading lower by over two percent as a sell-off in US technology shares overnight and growing concerns over cooling global economic growth spilled over into Asia. The US markets ended lower on Monday amid concerns about the outlook for global economic growth and including oil-price swings.

Back home, the aviation stocks are flying high as India’s domestic air passenger traffic grew in double digits for the 49th consecutive month in September. India’s domestic revenue passenger kilometres (RPK) in the month under review rose by 19.8 percent compared to the corresponding month of the previous year. Agriculture stocks remained in focus with report that India has emerged as a major seed hub in Asia as 18 companies out of 24 leading firms evaluated, have invested in breeding and production activities in the country.

The BSE Sensex is currently trading at 34854.69, up by 41.70 points or 0.12% after trading in a range of 34672.20 and 34861.26. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.04%, while Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.12%, Energy up by 0.64%, IT up by 0.57%, Power up by 0.52% and PSU was up by 0.48%, while Telecom down by 0.82%, Consumer Durables down by 0.66%, Realty down by 0.33% and Bankex was down by 0.06% were the few losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.61%, Power Grid Corporation up by 1.13%, Adani Ports & SEZ up by 1.02%, Axis Bank up by 0.96% and Maruti Suzuki up by 0.81%. On the flip side, Tata Motors down by 2.12%, Tata Motors - DVR down by 1.44%, Sun Pharma down by 0.95%, Kotak Mahindra Bank down by 0.74% and Bharti Airtel down by 0.71% were the top losers.

Meanwhile, with poor performance of mining sector and lower offtake of capital goods, India’s industrial production measured by Index of Industrial Production (IIP) grew at the slowest pace in four months at 4.5% in September 2018. The previous low was recorded at 3.8% in May this year. The industrial production was 4.1% in September 2017 and the factory output growth for August was revised slightly upward to 4.6% from provisional figure of 4.3%. 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 September 2018 stood at 128.6, which is 4.5% higher as compared to the level in the month of September 2017. The cumulative growth for the period April-September 2018 over the corresponding period of the previous year stood at 5.1%.

On the sectoral basis, the mining sector output growth decelerated to 0.2% in September as against 7.6% in the year-ago month. However, the data showed that the manufacturing sector recorded a growth of 4.6% in September, up from 3.8% a year ago. The electricity generation too improved to 8.2% in the month from 3.4% in September 2017. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of September 2018 stand at 94.6, 131.4 and 162.9 respectively. The cumulative growth in these three sectors during April-September 2018 over the corresponding period of 2017 has been 3.3%, 5.3% and 6.2% respectively.

Besides, capital goods output growth slowed to 5.8% in the month from 8.7% a year ago. As per Use-based classification, the growth rates in September 2018 over September 2017 are 2.6% in primary goods, 1.4% in intermediate goods and 9.5% in infrastructure/construction goods. The consumer durables and consumer non-durables have recorded growth of 5.2% and 6.1%, respectively.

In terms of industries, 17 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of September 2018 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of furniture’ has shown the highest positive growth of 32.8% followed by 20.9% in ‘Manufacture of wearing apparel’ and 20.6% 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 (-) 12.9% followed by (-) 10.7% in ‘Other manufacturing’ and (-) 7.3% in ‘Manufacture of tobacco products’.

The CNX Nifty is currently trading at 10489.75, up by 7.55 points or 0.07% after trading in a range of 10440.55 and 10503.65. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were HPCL up by 3.71%, BPCL up by 3.62%, Indian Oil Corporation up by 2.11%, Tech Mahindra up by 1.57% and HCL Tech up by 1.47%. On the flip side, Tata Motors down by 2.15%, Bharti Infratel down by 1.57%, Titan Co down by 1.56%, Sun Pharma down by 1.45% and Bharti Airtel down by 1.42% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 515.10 points or 2.37% to 21,754.78, Taiwan Weighted decreased 75.28 points or 0.77% to 9,755.93, Straits Times dropped 16.97 points or 0.56% to 3,051.18, Hang Seng shed 26.69 points or 0.1% to 25,606.49 and KOSPI was down by 17.97 points or 0.87% to 2,062.47.

On the flip side, Shanghai Composite increased 2.94 points or 0.11% to 2,633.46 and Jakarta Composite was up by 35.74 points or 0.61% to 5,812.79.