Markets trade slightly higher in early deals

Indian equity benchmarks made cautious start and are trading slightly in green in early deals on Friday with positive US-China trade developments and encouraging industrial growth data. Gains in Auto, IT and Consumer Durables stocks were supported the up move. The Central Statistics Office’s data showed that India's industrial output rose 4.3% in July, as against 2% in June. Some support also came in with Union Minister of Commerce & Industry and Railways Piyush Goyal’s statement that government will soon be coming out with a credit scheme for exporters with enhanced insurance cover upto 90 percent instead of the present 60 percent. Adding optimism among market participants, the government clarified that no licence would be required for the manufacture of goods except tobacco items, defence equipment, hazardous chemicals and industrial explosives. Though, some cautiousness crept in with government data showing that consumer price index-based inflation (CPI) for August crept up slightly to 3.21% year-on-year, compared with 3.15% in July, driven by a sharp rise in food prices. Traders turned concerned with the International Monetary Fund’s (IMF) statement that India's economic growth is much weaker than expected, attributing the reasons for corporate and environmental regulatory uncertainty and lingering weaknesses in some non-bank financial companies.

On the global front, Asian markets were trading in green amid positive developments on the US-China trade front and following the European Central Bank's announcement that it will resume its quantitative easing program. The US President Donald Trump said he would consider an interim trade deal with China, though it would not be preferred. Back home, banking stocks were in focus with RBI’s data showing that bank credit and deposits growth slowed to 10.24 per cent and 9.73 per cent to Rs 96.80 trillion and Rs 127.80 trillion, respectively, in the fortnight to August 30. In scrip specific development, Sterlite Technologies gained on unveiling pFTTx solution at ONF Connect 2019 and Havells rose on aiming Rs 1,000 crore sales revenue from Northeast in 2 years.

The BSE Sensex is currently trading at 37186.62, up by 82.34 points or 0.22% after trading in a range of 37029.52 and 37244.34. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.27%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Auto up by 0.89%, IT up by 0.88%, Consumer Durables up by 0.73%, TECK up by 0.73%, Consumer discretionary up by 0.57%, while Metal down by 0.44%, PSU down by 0.36%, Telecom down by 0.35%, Healthcare down by 0.28%, Capital Goods down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.52%, Infosys up by 1.13%, Tata Motors - DVR up by 1.02%, Kotak Mahindra Bank up by 0.87% and TCS up by 0.76%. On the flip side, Yes Bank down by 3.31%, HDFC Bank down by 0.67%, SBI down by 0.63%, Larsen & Toubro down by 0.51% and Tata Steel down by 0.51% were the top losers.

Meanwhile, snapping two-month declining trend, India’s industrial production measured by Index of Industrial Production (IIP), which gauges production in the industrial sector for a given period of time, stood at 4.3% in July 2019. The growth was 2% in June and 3.1% in May this year. Though, it was lower than 6.5% recorded in July 2018, mainly due to poor show by manufacturing sector. 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 July 2019 stood at 131.1, which was 4.3% higher as compared to the level in the month of July 2018. The cumulative growth for the period April-July 2019 over the corresponding period of the previous year stands at 3.3% as against 5.4% in the same period last year.

On the sectroal front, the manufacturing sector, which accounts for more than three-fourths of the entire index, grew 4.2% in July, lower than the 7% growth a year ago. Mining grew 4.9% in July against a 3.4% in the year-ago respectively. Electricity rose 4.8%, falling from a 6.6% growth from the last year. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of July 2019 stood at 100.2, 132.9 and 169.7 respectively. The cumulative growth in these three sectors during April-July 2019 over the corresponding period of 2018 has been 3.4%, 2.8% and 6.6%, respectively.

Capital goods segment, which is a barometer of investment, saw a contraction of 7.1% in July compared to 2.3% rise a year ago. As per Use-based classification, the growth rates in July 2019 over July 2018 were 3.5% in Primary goods, 13.9% in Intermediate goods and 2.1% in Infrastructure/ Construction Goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 2.7% and 8.3%, respectively.

In terms of industries, 13 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of July 2019 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of food products’ has shown the highest positive growth of 23.4% followed by 17.3% in ‘Manufacture of basic metals’ and 15.0% in ‘Manufacture of wearing apparel’. On the other hand, the industry group ‘Manufacture of paper and paper products’ has shown the highest negative growth of (-) 15.4% followed by (-) 13.3% in ‘Manufacture of motor vehicles, trailers and semi-trailers’ and (-) 10.9% in ‘Printing and reproduction of recorded media’.

The CNX Nifty is currently trading at 10985.70, up by 2.90 points or 0.03% after trading in a range of 10961.95 and 11023.85. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 1.70%, Maruti Suzuki up by 1.33%, Infosys up by 1.09%, TCS up by 1.06% and Zee Entertainment up by 0.85%. On the flip side, Yes Bank down by 4.12%, Indiabulls Housing Finance down by 2.58%, Grasim Industries down by 1.23%, SBI down by 1.18% and UPL down by 1.01% were the top losers.

Asian market were trading in green; Nikkei 225 surged 220.34 points or 1.01% to 21,979.95, Hang Seng increased 98.72 points or 0.36% to 27,186.35, Straits Times advanced 12.58 points or 0.39% to 3,207.54 and Jakarta Composite was up by 2.77 points or 0.04% to 6,344.94.