Pessimism continues on Dalal Street in afternoon deals

Indian equity benchmarks continued to trade with a cut of around half a percent in noon deals on the back of heavy selling in metal and auto stocks. Sentiments also got hit with report that Indian manufacturing sector slowed down in the month of December. Growth was curtailed by competitive pressures, labour issues and challenging public policies. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 53.2 in December from 54 in November. Depreciation in Indian rupee too dampened sentiments. The rupee opened 9 paise lower at 69.52 against the US dollar on Wednesday. Minutes later, the currency declined further to 69.63, down 20 paise. Sentiments also remain dampened on report that factory activity weakened across Asia in December as the Sino-US trade war and a slowdown in Chinese demand hit production in most economies, strengthening the case for a pause in interest rate hikes in the region in 2019. Back home, auto stocks are trading under pressure after the auto companies such as Eicher Motors, Mahindra and Mahindra, Tata Motors and Maruti Suzuki India reported lower-than-expected auto sales numbers for December. Shares of metal companies edged lower after reports said foreign brokerage firm CLSA has downgraded the stocks saying deteriorating Chinese demand outlook will weigh on commodity prices.

The BSE Sensex is currently trading at 36078.16, down by 176.41 points or 0.49% after trading in a range of 36035.78 and 36236.70. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.39%, while Small cap index was down by 0.10%.

The few gaining sectoral indices on the BSE were IT up by 0.82%, TECK up by 0.58% and Consumer Durables up by 0.02%, while Metal down by 2.17%, Auto down by 1.99%, Utilities down by 1.18%, Consumer Disc down by 1.03%, Oil & Gas down by 1.01% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.27%, Infosys up by 1.10%, ICICI Bank up by 0.71%, Yes Bank up by 0.57% and Sun Pharma up by 0.32%. On the flip side, Mahindra & Mahindra down by 4.11%, Vedanta down by 3.26%, Tata Steel down by 2.73%, Hero MotoCorp down by 2.53% and Power Grid Corporation down by 1.95% were the top losers.

Meanwhile, after hitting an eleven-month high, the Indian manufacturing sector slowed down in the month of December, despite easing cost inflationary pressures. Growth was curtailed by competitive pressures, labour issues and challenging public policies. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 53.2 in December from 54 in November. Nevertheless, despite a slight deceleration, the manufacturing sector activity expanded for the 17th consecutive month as the PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.

The report also said that output continued to rise strongly, supported by technological progress and greater sales. The rise in production was among the quickest seen in 2018, despite easing from November. Further, companies experienced greater inflows of new orders, on the back of expanded client bases, stronger demand and fruitful advertising. International markets contributed to sales growth, with exports rising for the fourteenth month in a row. The report also noted that employment continued to expand in December, but companies still signalled increased volumes of work-in-hand. The upturn in jobs was the slowest in four months, while backlogs were accumulated to the quickest extent since May. 

On the inflation front, the rate of input cost inflation eased to a 34-month low, which translated into broadly no change in factory gate charges. However, goods producers reported that higher prices for materials, especially steel, resulted in another increase in overall cost burdens. The rise was marginal and much softer than seen on average over the survey history.

The CNX Nifty is currently trading at 10840.30, down by 69.80 points or 0.64% after trading in a range of 10839.30 and 10895.35. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.30%, Infosys up by 1.05%, Bharti Infratel up by 0.65%, Titan Co up by 0.64% and ICICI Bank up by 0.54%. On the flip side, Eicher Motors down by 6.68%, Mahindra & Mahindra down by 4.12%, JSW Steel down by 3.37%, Vedanta down by 3.27% and Tata Steel down by 2.91% were the top losers.

All the Asian markets are trading in red; Straits Times declined 30.31 points or 0.99% to 3,038.45, Hang Seng tumbled 714.87 points or 2.77% to 25,130.83, Taiwan Weighted fell 173.27 points or 1.78% to 9,554.14, Kospi shed 31.04 points or 1.52% to 2,010.00, Jakarta Composite slipped 11.01 points or 0.18% to 6,183.49 and Shanghai Composite was down by 28.82 points or 1.16% to 2,465.08.