Markets trade flat in afternoon deals on high WPI data

Indian equity benchmarks traded flat in afternoon session, as investors remained cautious after data showing that Inflation based on wholesale prices rose to 2.93 percent in February over the previous month due to hardening of prices of primary articles, fuel and power. The sentiments remained in lackluster mood with Reserve Bank of India’s (RBI) report that private corporate investment plans have fallen for the seventh year in a row on account of economic slowdown, poor project appraisals and huge corporate leveraging. Traders also took a note of the chairman of RBI Committee on Digital Payments, Nandan Nilekani’s statements that India is still very far away from being a less-cash economy and security issues around digital payments system needed to be addressed to make the mode more acceptable. On the sectoral front, the food processing sector remained in focus with report that Union Food Processing Minister Harsimrat Kaur Badal expects more than $28 billion worth of foreign direct investments (FDI) in the food processing sector in 2019. The ministry is eyeing the next edition of its flagship investment show World Food India, set to take place in November, 2019, to reach that level.

On the global front, Asian markets were trading mostly in red, as investors reacted cautiously to mixed data from China. The country’s industrial output expanded at the slowest pace in 17 years, although retail sales and fixed asset investment grew by more than expected. Back home, the BSE Sensex is currently trading at 37774.46, up by 22.29 points or 0.06% after trading in a range of 37737.31 and 37907.78. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.31%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Telecom up by 0.67%, Realty up by 0.53%, Healthcare up by 0.49%, Energy up by 0.47% and Metal up by 0.29%, while Power down by 0.97%, Utilities down by 0.94%, Consumer Durables down by 0.70%, FMCG down by 0.62% and Basic Materials was down by 0.56% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.48%, Indusind Bank up by 2.40%, Sun Pharma up by 2.23%, Bharti Airtel up by 1.56% and Coal India was up by 1.49%. On the flip side, Power Grid down by 3.62%, HCL Technologies down by 2.16%, Hero MotoCorp down by 1.33%, ITC down by 1.12% and Tata Motors - DVR was down by 0.99% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its latest data on performance of the private corporate business has indicated that the private firms in manufacturing sector registered a 24.9 percent growth in net profit in Q3 (October-December) of 2018-19 on annual basis, aiding from lower tax provisions. It noted that the companies posted Rs 77,500 crore net profit in Q3 of FY19 as compared to Rs 57,800 crore in the year-ago period. In July-September quarter of 2018-19, the company’s net profit stood at Rs 71,900 crore.

However, on the sales front, demand conditions in the manufacturing sector weakened on year-on-year basis. The Central Bank said this moderation was observed mainly in textiles, iron and steel, motor vehicles and other transport equipments industries whereas sales growth improved for consumer-driven sectors such as food product and beverages, and pharmaceutical. It added that the interest expenses incurred by manufacturing sector also witnessed a dip from a year ago level, reflecting ongoing deleveraging in the corporate sector.

In IT sector, the report showed that sales growth remained broadly unchanged in relation to the previous quarter, while the services (non-IT) sector maintained the pace of sales growth, riding on the improvement recorded by the transport and storage services industries. It also noted that the telecommunication sector continued to experience contraction in sales. As per the RBI, pricing power in terms of operating profit and net profit margins remained flat in manufacturing sector. It added that net profit margin of the IT sector declined marginally.

The CNX Nifty is currently trading at 11337.55, down by 4.15 points or 0.04% after trading in a range of 11327.40 and 11383.45. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.54%, Indusind Bank up by 2.52%, Sun Pharma up by 2.10%, NTPC up by 1.62% and Coal India was up by 1.38%. On the flip side, Power Grid down by 3.65%, Ultratech Cement down by 2.13%, HCL Technologies down by 1.84%, Tech Mahindra down by 1.68% and Titan was down by 1.24% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted dropped 24.67 points or 0.24% to 10,348.65, Hang Seng decreased 53.19 points or 0.18% to 28,754.26, Shanghai Composite declined 42.87 points or 1.42% to 2,984.08 and Nikkei 225 slipped 3.22 points or 0.02% to 21,287.02.

On the flip side, KOSPI rose 7.27 points or 0.34% to 2,155.68, Straits Times advanced 1.18 points or 0.04% to 3,196.77 and Jakarta Composite soared 24.22 points or 0.38% to 6,401.80.