Benchmarks trade lower in early deals; Sensex slips below 35,900 mark

Indian equity benchmarks made a gap-down opening and are trading lower in early deals on Monday with a cut of around half a percent, breaching their crucial 35,900 (Sensex) and 10,750 (Nifty) levels. Traders remained on sidelines ahead of macro-economic data wholesale price inflation (WPI) and consumer price index (CPI) for December scheduled to be released later in the day. Sentiments remain dampened after India’s industrial output hit a 17-month low of 0.5 per cent in November as compared to 8.1 per cent in October mainly on the back of contraction in manufacturing sector, mining, capital goods and consumer durable goods. The previous low was in June 2017, when IIP growth contracted by 0.3 per cent. Some cautiousness also crept in with a private report that meeting the fiscal deficit target of 3.3 per cent of Gross Domestic Product (GDP) for the current fiscal could be a challenge for the government, given the shortfall in Goods and Services Tax (GST) collections, rising expenditure and slowing factory output.

On the global front, all the Asian markets are trading in red at this point of time, as investors kept a wary eye on looming Chinese trade data on increasing signs a slowdown in the world’s second-biggest economy is dragging on global growth. The US markets snapped a five-day winning streak to settle marginally lower on Friday as concerns about the slowing of the Chinese economy and the continued shutdown of the US government dragged equities lower.

Back home, power sector stocks were trading lower with report that amid stress in the power sector, woes of electricity generating firms have increased further as their outstanding dues on state distribution companies (discoms) rose to Rs 39,498 crore in October 2018, up 24.7 per cent from a year-ago levels. In scrip specific developments, KNR Construction gained with its arms getting financial closure for projects in Andhra Pradesh, Tamil Nadu. BLS International edged higher on adding more centres for Attestation, Apostille services.

The BSE Sensex is currently trading at 35833.40, down by 176.44 points or 0.49% after trading in a range of 35806.28 and 36124.94. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.45%, while Small cap index was down by 0.30%.

The few gaining sectoral indices on the BSE were IT up by 0.51%, TECK up by 0.38% and Healthcare was up by 0.16%, while Capital Goods down by 1.29%, Metal down by 1.08%, Realty down by 1.03%, Industrials down by 0.81% and Utilities was down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.69%, Infosys up by 2.57%, Sun Pharma up by 0.68% and Hindustan Unilever up by 0.30%. On the flip side, Axis Bank down by 1.71%, Larsen & Toubro down by 1.70%, Tata Steel down by 1.43%, Vedanta down by 1.30% and TCS down by 1.19% were the top losers.

Meanwhile, after hitting 11-month high in October, India’s industrial growth measured by Index of Industrial Production (IIP) slipped to a 17-month low of 0.5% in November 2018, as compared to 8.5% in November 2017, on account of contraction in manufacturing sector, particularly consumer and capital goods. The previous low was in June 2017, when IIP growth contracted by 0.3%. Besides, the growth for October 2018 was revised upwards to 8.4% from 8.1%. 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 November 2018 stood at 126.4, which was 0.5% higher as compared to the level in the month of November 2017. The cumulative growth for the period April-November 2018 over the corresponding period of the previous year stood at 5.0%.

On the sectoral front, the manufacturing sector, which constitutes 77.63% of the index, recorded a contraction of 0.4% in November as against a growth of 10.4% a year ago. However, the mining sector posted 2.7% growth during the month as against 1.4% in November 2017. Power sector output also grew by 5.1% from 3.9% a year ago. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2018 stand at 110.6, 127.2 and 147.2 respectively. The cumulative growth in these three sectors during April-November 2018 over the corresponding period of 2017 has been 3.7%, 5.0% and 6.6%, respectively.

Besides, the capital goods output contracted to 3.4%, compared to 3.7% growth a year ago. Consumer durables output also dipped 0.9% as against a growth of 3.1% a year earlier. Consumer non-durable goods also saw a contraction of 0.6% as compared to 23.7% growth a year ago. As per Use-based classification, the growth rates in November 2018 over November 2017 were 3.2% in Primary goods, (-) 4.5% in Intermediate goods and 5.0% in Infrastructure/ Construction Goods.

In terms of industries, 10 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of November 2018 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of wearing apparel’ has shown the highest positive growth of 22.1% followed by 7.6% in ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’ and 7.4% in ‘Manufacture of other transport equipment’. On the other hand, the industry group ‘Manufacture of fabricated metal products, except machinery and equipment’ has shown the highest negative growth of (-) 13.4% followed by (-) 9.6% in ‘Manufacture of electrical equipment’ and (-) 7.3% in ‘Other manufacturing’.

The CNX Nifty is currently trading at 10745.70, down by 49.25 points or 0.46% after trading in a range of 10727.55 and 10808.00. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.82%, Infosys up by 2.59%, Bharti Infratel up by 1.41%, Sun Pharma up by 0.50% and HPCL up by 0.47%. On the flip side, Axis Bank down by 1.59%, Larsen & Toubro down by 1.50%, Bharti Airtel down by 1.34%, GAIL India down by 1.33% and HDFC down by 1.23% were the top losers.

All the Asian markets are trading in red; Straits Times decreased 12.96 points or 0.41% to 3,185.69, Hang Seng declined 368.08 points or 1.38% to 26,299.19, Taiwan Weighted dropped 75.39 points or 0.77% to 9,684.01, KOSPI dipped 14.32 points or 0.69% to 2,061.25, Jakarta Composite shed 46.92 points or 0.74% to 6,314.55 and Shanghai Composite was down by 14.24 points or 0.56% to 2,539.59.