Benchmarks trade slightly higher in early deals on Monday

Indian equity benchmarks have made positive start and trading slightly higher in early deals on Monday following positive cues from global market coupled with fall in crude oil prices. The Sensex and Nifty were trading above their crucial levels of 38,800 and 11,550, respectively. Traders took encouragement with report that foreign investors have remained net buyers in the Indian capital markets this month so far, even as the equity segment saw robust outflows post the Budget. As per the latest depositories data, foreign portfolio investors (FPIs) withdrew a net sum of Rs 4,953.77 crore from equities during July 1-12, but poured in a net Rs 8,504.78 crore into the debt market, translating into a cumulative net investment of Rs 3,551.01 crore. Besides, in a bid to deal with stress in NBFC sector, guidelines will be issued soon for state-owned banks to take over pooled assets of non-banking financial companies. However, upside remained capped amid weak macro-economic data. As per Central Statistics Office (CSO) data, India's Index of Industrial Production (IIP) growth slipped to 3.1 per cent in May mainly on account of subdued performance of mining and manufacturing sector. The IIP had expanded by 3.8 per cent in May 2018. Besides, India's retail inflation hit a eight-month high in June on higher food prices, but stayed below the central bank's target, potentially giving it room for a further interest rate easing to boost slowing growth.

On the global front, Asian markets were trading mostly in green at this point of time as investors breathed a sigh of relief after encouraging Chinese data suggested the world's second-biggest economy may be starting to stabilise thanks to ramped-up stimulus from Beijing. Also, the US markets closed higher on Friday. Back home, with promoter spat intensifying at the country's largest airline IndiGo, markets watchdog Sebi and the corporate affairs ministry have started digging deep into allegations of governance lapses and violations that could force the government to override existing arrangements and pacts at InterGlobe Aviation. In scrip specific development, Dewan Housing Finance Corporation (DHFL) hit lower circuit in early trade on Monday after the company said the developments in last few quarter threaten its ability to continue as a going concern, as the company posted biggest ever quarterly loss of Rs 2,224 crore for the Q4FY19. The company had reported a profit of Rs 134.35 crore in Q4FY18.

The BSE Sensex is currently trading at 38828.67, up by 92.44 points or 0.24% after trading in a range of 38796.04 and 39023.97. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.08%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were IT up by 1.86%, TECK up by 1.64%, Healthcare up by 0.64%, Auto up by 0.60% and Telecom was up by 0.50%, while Capital Goods down by 0.60%, Metal down by 0.58%, PSU down by 0.44%, Consumer Durables down by 0.43% and Bankex was down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 4.19%, Yes Bank up by 3.72%, Sun Pharma up by 3.09%, Tata Motors up by 1.85% and Tata Motors - DVR up by 1.82%. On the flip side, Vedanta down by 1.04%, Hero MotoCorp down by 0.95%, Larsen & Toubro down by 0.91%, ICICI Bank down by 0.62% and Axis Bank down by 0.54% were the top losers.

Meanwhile, with subdued performance of mining and manufacturing sector, India’s industrial production measured by Index of Industrial Production (IIP), which gauges production in the industrial sector for a given period of time, slipped to 3.1% in May 2019, as compared to 3.8% growth in May 2018. The index grew at 4.3% in April 2019 and 0.4% in March 2019. 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 May 2019 stood at 133.6, which was 3.1% higher as compared to the level in the month of May 2018. The cumulative growth for the period April-May 2019 over the corresponding period of the previous year stood at 3.7%.

On the sectoral front, the expansion in the mining sector was merely 3.2% in May, as compared to 5.8% in the year-ago month. Similarly, the growth in the manufacturing sector was also subdued at 2.5% in May, compared to 3.6% in the corresponding month of the last fiscal. However, the power generation grew at 7.4% in May, against 4.2% in same month last year. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of May 2019 stand at 111.0, 133.3 and 176.9 respectively. The cumulative growth in these three sectors during April-May 2019 over the corresponding period of 2018 has been 4.1%, 3.2% and 6.7%, respectively.

The capital goods output, which is a barometer of investment, grew at 0.8% compared to 6.4% in May last year. As per Use-based classification, the growth rates in May 2019 over May 2018 were 2.5% in Primary goods, 0.6% in Intermediate goods and 5.5% in Infrastructure/ Construction Goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 0.1% and 7.7% respectively.

In terms of industries, 12 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of May 2019 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’ has shown the highest positive growth of 24.8% followed by 15.9% in ‘Manufacture of food products’ and 9.4% in ‘Manufacture of computer, electronic and optical products’. On the other hand, the industry group ‘Manufacture of paper and paper products’ has shown the highest negative growth of (-) 12.2% followed by (-) 9.9% in ‘Manufacture of furniture’ and (-) 8.7% in ‘Manufacture of fabricated metal products, except machinery and equipment’.

The CNX Nifty is currently trading at 11568.00, up by 15.50 points or 0.13% after trading in a range of 11567.60 and 11618.40. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Infosys up by 4.45%, Yes Bank up by 3.72%, Sun Pharma up by 3.15%, Tata Motors up by 1.76% and Grasim Industries up by 0.86%. On the flip side, Vedanta down by 1.16%, Larsen & Toubro down by 1.15%, Titan Company down by 1.09%, Zee Entertainment down by 1.08% and Coal India down by 1.08% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 61.23 points or 0.22% to 28,532.85, Taiwan Weighted strengthened 47.03 points or 0.43% to 10,871.38, Shanghai Composite gained 22.30 points or 0.76% to 2,952.85, and Jakarta Composite soared 42.32 points or 0.66% to 6,415.67. On the flip side, Straits Times decreased 3.11points or 0.09% to 3,354.23, KOSPI was down by 2.24 points or 0.11% to 2,084.42.