Benchmarks trade in fine fettle on positive macro data

Indian equity benchmarks made a gap-up opening and are trading in fine fettle in early deals on positive macro-economic data amid supportive global cues. The Central Statistics Office (CSO) in its latest data showed that India’s industrial output grew at an 11-month high of 8.1% in October mainly on the back of mining, power and manufacturing sectors coupled with higher offtake of capital as well as consumer durable goods. Industrial production measured in terms of Index of Industrial Production (IIP) grew 1.8% in October 2017. The previous high IIP growth rate was recorded in November last year at 8.5%. Also, India’s retail inflation eased to 2.33% in November as compared to 4.88% in November last year and was 3.31% in October. Traders also took some encouragement with S&P Global’s statement that India’s rapid economic growth will be enough to offset worries about the independence of its central bank and keep its credit rating in the coveted investment grade bracket.

Global cues too remained supportive with Asian markets rallying at this point of time as investors breathed a sigh of relief after British Prime Minister Theresa May survived a no-confidence vote, and as China appeared to be taking more steps to meet US demands to open its markets. The US markets rallied on Wednesday as signs of easing trade tensions boosted the outlook for global economic growth.

Back home, coal sector stocks remained buzzing with report that India’s coal imports rose by 38.2% to Rs 1,38,477 crore in monetary terms last fiscal. In quantity terms, the coal imports increased 9.1% to 208.27 MT from 190.95 MT. Sugar sector stocks remained in focus with a private report that India’s sugar production could fall in 2019/20 as farmers are struggling to plant cane because of a drought in two of the country’s top producing states.

The BSE Sensex is currently trading at 35961.53, up by 182.46 points or 0.51% after trading in a range of 35929.29 and 36047.99. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.81%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were FMCG up by 1.02%, Realty up by 0.95%, PSU up by 0.87%, Bankex up by 0.71% and Telecom was up by 0.64%, while Consumer Durables down by 0.23% and Metal was down by 0.10% were the only losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.40%, Yes Bank up by 1.93%, Tata Motors up by 1.28%, Maruti Suzuki up by 1.20% and Tata Motors - DVR up by 1.12%. On the flip side, Sun Pharma down by 2.08%, Hero MotoCorp down by 1.26%, Tata Steel down by 0.91%, Coal India down by 0.63% and Adani Ports & SEZ down by 0.59% were the top losers.

Meanwhile, India’s industrial production measured by Index of Industrial Production (IIP) surged an 11-month high of 8.1% in the month of October 2018 as against 4.5% in September 2018 and 1.8 percent in October 2017. The growth was backed by mining, power and manufacturing sectors coupled with higher offtake of capital as well as consumer durable goods. The previous high IIP growth rate was recorded in November last year at 8.5%. 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 October 2018 stood at 132.4, which was 8.1% higher as compared to the level in the month of October 2017. The cumulative growth for the period April-October 2018 over the corresponding period of the previous year stood at 5.6%.

On the sectoral basis, manufacturing sector, which constitutes 77.63% of the index, recorded 7.9% growth in October as against 2% year ago. Mining sector posted 7% growth during the month as against a contraction of 0.2% in October 2017. The power sector output also grew by 10.8% in the month compared to 3.2% a year ago. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of October 2018 stand at 107.9, 133.5 and 166.0 respectively. The cumulative growth in these three sectors during April-October 2018 over the corresponding period of 2017 has been 3.8%, 5.6% and 6.8% respectively.

Besides, the capital goods sector saw a 16.8% output growth in the month, up from 3.5% a year ago. Consumer durables expanded at 17.6% as compared to a contraction of 9% a year earlier. As per Use-based classification, the growth rates in October 2018 over October 2017 are 6.0% in Primary goods, 1.8% in Intermediate goods and 8.7% in Infrastructure/ Construction Goods. The Consumer non-durables recorded growth of 7.9% respectively.

In terms of industries, 21 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of October 2018 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of furniture’ has shown the highest positive growth of 41.0% followed by 39.0% in ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’ and 30.2% in ‘Manufacture of computer, electronic and optical products’. On the other hand, the industry group ‘Manufacture of paper and paper products’ have shown the highest negative growth of (-) 1.8% followed by (-) 1.7% in ‘Manufacture of beverages’.

The CNX Nifty is currently trading at 10797.65, up by 60.05 points or 0.56% after trading in a range of 10778.60 and 10816.55. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 3.72%, SBI up by 2.45%, Yes Bank up by 2.30%, HPCL up by 1.55% and Bajaj Finserv up by 1.32%. On the flip side, Sun Pharma down by 2.12%, UPL down by 1.90%, Cipla down by 1.18%, Hero MotoCorp down by 1.09% and Adani Ports & SEZ down by 0.84% were the top losers.

All the Asian markets are trading in green; Nikkei 225 surged 223.72 points or 1.04% to 21,826.47, Straits Times rose 13.04 points or 0.42% to 3,113.03, Hang Seng soared 351.07 points or 1.34% to 26,537.78, Taiwan Weighted jumped 43.83% or 0.45% to 9,860.28, KOSPI advanced 13.80 points or 0.66% to 2,096.37, Jakarta Composite added 48.44 points or 0.79% to 6,164.02 and Shanghai Composite was up by 41.65 points or 1.60% to 2,643.80.