Volatility continues on Dalal Street

Volatility continued on Dalal Street in late afternoon session, with both larger peers - Sensex and Nifty - trading near their neutral lines. Domestic sentiments remained hampered, as April data signaled further loss in the growth momentum across India's manufacturing sector, reflecting softer increase in new orders. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 51.8 in April from 52.6 in March. Traders were also worried, as India Ratings and Research (Ind-Ra) in its latest report lowered India’s gross domestic product (GDP) growth projection to 7.3% for fiscal year 2019-20 (FY20), from its earlier projection of 7.5%.

On the sectoral front, auto stocks were riding high, on the back of positive sales numbers in April. Ashok Leyland reported a rise of 7% in April 2019 sales (Domestic + Exports) to 13626 units, as against 12677 units sold in the same month of last year, while Bajaj Auto registered a rise of 2% in total sales to 423,315 units in April 2019 against 415,168 units in April 2018. Sugar stocks were in focus, with a food ministry order that sugar mills can sell 2.1 million tonne of the sweetener in the open market in the current month, higher than the April quota of 1.8 million tonne.

On the global front, European markets were trading mostly in green, despite Germany's retail sales fell for the first time in three months, defying expectations for a rise. The data from the Federal Statistical Office showed that retail sales declined 2.1 percent year-on-year in March, after a 4.4 percent rise in February, which was revised from 4.7 percent. Asian markets were also trading mostly in green, with investors keeping a close eye on US-China trade talks amid speculation the two sides may announce a trade deal by May 10.

The BSE Sensex is currently trading at 39072.00, up by 40.45 points or 0.10% after trading in a range of 38882.99 and 39189.95. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.40%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Telecom up by 2.02%, Capital Goods up by 0.45%, Energy up by 0.38%, Metal up by 0.38% and Power up by 0.28%, while IT down by 1.39%, TECK down by 1.06%, Consumer Durables down by 0.98%, Healthcare down by 0.61% and Oil & Gas down by 0.50% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.33%, Kotak Mahindra Bank up by 2.09%, Power Grid up by 2.01%, Hero MotoCorp up by 1.94% and Bharti Airtel up by 1.62%. On the flip side, ICICI Bank down by 2.81%, Tata Motors down by 2.47%, Tata Motors - DVR down by 2.15%, Indusind Bank down by 2.07% and HCL Tech down by 1.96% were the top losers.

Meanwhile, April data signaled further loss in the growth momentum across India's manufacturing sector, reflecting softer increase in new orders. Capital goods sector was the key source of weakness, recording contractions in new business and output. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 51.8 in April from 52.6 in March. However, the PMI reading stood above the watershed 50 mark, which differentiates growth from contraction.

The survey reports also noted that slower rise in new orders restricted growth of output, employment, input buying and business sentiment. New business growth moderated at the start of fiscal year 2019-20, curbed by the elections and a challenging economic environment. The increase in order book volumes was the weakest in eight months. Output expansion in April got impacted due to slowdown in growth of total sales, coupled with cashflow difficulties and competitive pressures.

Besides, the report found cooling rates of inflation, with input cost inflation easing to a 43-month low. Factories responded by lifting their own fees to a lesser extent. The rate of charge inflation was marginal and below its long-run average. Meanwhile, output expectations remained positive in April, with optimism supported by post-election growth predictions.

The CNX Nifty is currently trading at 11751.45, up by 3.30 points or 0.03% after trading in a range of 11699.55 and 11789.30. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.33%, Bharti Infratel up by 2.84%, Power Grid up by 2.20%, Hero MotoCorp up by 2.16% and Kotak Mahindra Bank up by 2.13%. On the flip side, Britannia down by 3.49%, Tata Motors down by 2.54%, ICICI Bank down by 2.43%, GAIL India down by 2.36% and Indusind Bank down by 2.27% were the top losers.

Asian markets were trading mostly in green; Hang Seng gained 245.07 points or 0.83% to 29,944.18, Taiwan Weighted strengthened 36.76 points or 0.34% to 11,004.49 and KOSPI was up by 9.16 points or 0.42% to 2,212.75. On the flip side, Straits Times fell 20.50 points or 0.6% to 3,379.70 and Jakarta Composite was down by 70.12 points or 1.09% to 6,385.23.

European markets were trading mostly in green; FTSE gained 1.73 points or 0.02% to 7,386.99 and DAX rose by 18.71 points or 0.15% to 12,362.79. On the flip side, CAC was down by 16.66 points or 0.30% to 5,569.75.