Benchmarks trade lower in early deals amid weak macro data

Indian equity benchmarks made slightly positive start and soon turned volatile in early deals on Thursday. Markets were trading in red amid weak set of macro-economic data and poor cues from Asian peers. The government data showed that India's inflation accelerated more-than-expected in October to breach the Reserve Bank of India's (RBI) medium-term target of 4% for the first time since July. The consumer prices index rose 4.62% year-on-year in October following a 3.99% increase in September. Also, a private report indicated that the gloom surrounding the Indian economy is likely to get worse in the months ahead. Though, downside remained limited with SBI report showing that credit growth picked up rapid pace beginning September - jumping by Rs 1.08 lakh crore - mainly helped by housing, NBFC and lately MSME. Traders took note of report that in perhaps the first instance, the finance ministry has kicked off the exercise to formulate the next budget by seeking suggestions on changes in direct and indirect taxes from industry and trade associations.

Global cues also remained lackluster with most of the Asian markets trading in red amid doubts about a US-China trade deal after private report said that trade talks have hit a snag over Chinese purchases of US agricultural products. Data that showed China's industrial production for October missed estimates and Japan's economic growth touched a one-year low in the third quarter also dampened investor sentiment.

Back home, on the sectoral front, telecom stocks came under pressure as the Department of Telecom (DoT) issued notice to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. The DoT has given option to telecom operators to clear all the dues on self-assessment basis. in scrip specific development, Cadila Healthcare gained on acquiring the remaining 15% stake each in its subsidiaries Zydus Technologies and Zydus Noveltech Inc for a combined $250,000 from strategic and minority partner Sharad Govil. However, Aurobindo Pharma came under pressure after receiving 14 observations from the US health regulator for its manufacturing facility at Hyderabad-a move that may disrupt supplies and delay future approvals.

The BSE Sensex is currently trading at 40047.87, down by 68.19 points or 0.17% after trading in a range of 40026.99 and 40200.30. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.55%, while Small cap index was down by 0.23%.

The few gaining sectoral indices on the BSE were IT up by 0.87%, Consumer Durables up by 0.27%, Consumer discretionary up by 0.24% and TECK was up by 0.18%, while Telecom down by 4.61%, Metal down by 1.53%, PSU down by 1.16%, Basic Materials down by 0.95% and Utilities was down by 0.83% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.89%, Asian Paints up by 1.25%, Maruti Suzuki up by 0.72%, Yes Bank up by 0.66% and TCS up by 0.43%. On the flip side, Bharti Airtel down by 3.58%, Indusind Bank down by 3.06%, Tata Motors - DVR down by 2.99%, Tata Motors down by 2.87% and SBI down by 2.07% were the top losers.

Meanwhile, breaching the Reserve Bank of India's (RBI) medium-term target of 4% for the first time since July 2018, India’s retail inflation based on Consumer Price Index (CPI) quickened to 16-month high of 4.62% in October from 3.99% in September 2019 on the back of higher food prices. This is the third straight month of rise in CPI. The earlier high was reported in June 2018 when the retail inflation print was recorded at 4.92%. Inflation in the food basket spiked to 7.89% in October 2019, against 5.11% the previous month, mostly due to surge in vegetable prices.

As per the data of the Central Statistics Office (CSO), Ministry of Statistics and Programme, the CPI (Rural, Urban, Combined) on Base 2012=100 for October 2019, stood at 4.29%, 5.11% and 4.62%, respectively, compared to 2.82%, 4.04% and 3.38%, respectively in October 2018. The index value of CPI for combined stood at 147.2. The data also showed that consumer food price index (CFPI) for all India Rural and Urban for October 2019 stood at 6.42% and 10.47%, respectively, compared to -0.65% and -1.15%, respectively in October 2018. The index value of CFPI for combined stood at 149.1 for the month of October.

Besides, inflation in vegetables spiked to 26.10% from 5.40% in September, while for fruits it jumped to 4.08% from 0.83%. Likewise, the prices of cereals, meat and fish, eggs grew at faster pace of 2.16%, 9.75% and 6.26%, respectively. For pulses and related products, retail inflation rose to 11.72%. However, the prices of fuel and light category continued to witness downward move at (-) 2.02% as against (-) 2.18% a month earlier. Meanwhile, inflation in housing stood at 4.58% for October, while it was 1.65% in clothing and footwear.

The CNX Nifty is currently trading at 11803.85, down by 36.60 points or 0.31% after trading in a range of 11802.65 and 11862.30. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Infosys up by 1.90%, Asian Paints up by 1.25%, Eicher Motors up by 0.91%, Titan Co up by 0.78% and Maruti Suzuki up by 0.75%. On the flip side, Bharti Infratel down by 7.93%, Bharti Airtel down by 3.54%, Indusind Bank down by 3.09%, Tata Motors down by 2.93% and Hindalco down by 2.43% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 245.22 points or 0.92% to 26,326.24, Nikkei 225 slipped 202.10 points or 0.87% to 23,117.77, Jakarta Composite lost 60.12 points or 0.98% to 6,082.38, Taiwan Weighted dropped 15.69 points or 0.14% to 11,452.14 and Straits Times trembled 9.40 points or 0.29% to 3,229.82. On the flip side, Shanghai Composite gained 1.99 points or 0.07% to 2,907.23 and KOSPI was up by 4.56 points or 0.21% to 2,127.01.