Markets trade firm amid positive IIP data

Indian equity benchmarks made positive start on Monday, with Sensex and Nifty scaling fresh record highs intraday, tracking Asian peers and growth in industrial production or Index of Industrial Production (IIP) data. Markets are trading firm in early deals, with gains of over half a percent each. A rebound in manufacturing activity pulled up November’s overall industrial output, helping it to grow 1.8% after declining for three consecutive months. Output had declined by 3.8% in October after a 4.3% contraction in September, the steepest fall in eight years. Also, the country's foreign exchange reserves touched a record high of $461.157 billion, after it surged by $3.689 billion in the week to January 3. Besides, investors awaited consumer inflation data due out later in the day for further direction. Meanwhile, the Reserve Bank of India has tweaks norms for imposing penalties on payment system operators for not complying with regulatory requirements, with a view to ensure safety and security to various stakeholders, including customers.

On the global front, Asian markets are trading mostly higher as investors look ahead to the signing of the phase one trade deal between the US and China on January 15. Chinese Vice Premier Liu He is scheduled to visit Washington this week to sign the trade deal.

Back home, the auto stocks were in focus as Automobile industry body SIAM (Society of Indian Automobile Manufacturers) predicted the prices of BSVI vehicles to rise up to 10%. IT major Infosys kicked off the earnings season on an upbeat note. Infosys jumped as it delivered a better-than-expected Q3 performance and the company's audit committee found no evidence of financial impropriety or executive misconduct. Avenue Supermarts rose on reporting 55.32% rise in consolidated net profit to Rs 384.04 crore in Q3 December 2019 over Q3 December 2018. However, Lupin fell as it received two observations from the US health regulator following the inspection of its Nagpur manufacturing facility.

The BSE Sensex is currently trading at 41827.80, up by 228.08 points or 0.55% after trading in a range of 41720.76 and 41893.41. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.57%, while Small cap index was up by 0.60%.

The top gaining sectoral indices on the BSE were IT up by 1.51%, TECK up by 1.30%, FMCG up by 0.82%, Healthcare up by 0.73% and Realty was up by 0.73%, while Auto down by 0.03% was the only losing index on BSE.

The top gainers on the Sensex were Infosys up by 3.33%, Sun Pharma Industries up by 2.10%, HCL Technologies up by 1.15%, Kotak Mahindra Bank up by 0.80% and ITC up by 0.80%. On the flip side, TCS down by 0.23%, Maruti Suzuki down by 0.17% and HDFC down by 0.01% were the top losers.

Meanwhile, turning positive after three months of contraction, India's factory output growth, measured by the Index of Industrial Production (IIP), grew 1.8% in November 2019, mainly on account of improvement in the manufacturing sector. The IIP had contracted by 1.4% in August, 4.3% in September and 4% (revised) in October in 2019. The factory output had grown by 0.2% in November 2018. As per the data released by the National Statistics Office of the Ministry of Statistics and Programme Implementation, IIP with base 2011-12 for the month of November 2019 stood at 128.4, which is 1.8% higher as compared to the level in the month of November 2018. The cumulative growth for the period April-November 2019 over the corresponding period of the previous year stood at 0.6%.

On the sectoral front, the growth in the manufacturing sector was 2.7% as against a contraction of 0.7% in the same month last year. Electricity generation turned negative (-) 5% as against a growth of 5.1% in November 2018. Mining sector output decelerated to 1.7% from 2.7% in the year ago month. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2019 stand at 112.5, 130.2 and 139.9, respectively. The cumulative growth in these three sectors during April-November 2019 over the corresponding period of 2018 has been (-) 0.1%, 0.9% and 0.8%, respectively.

Besides, production of capital goods, a barometer of investment, contracted by 8.6%. This compares with a contraction of 4.1% in November 2018. Also, there was a contraction of 3.5% in the infrastructure and construction goods segment. As per Use-based classification, the growth rates in November 2019 over November 2018 are (-) 0.3% in Primary goods and 17.1% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 1.5% and 2.0%, respectively.

In terms of industries, 13 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of November 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 23.2% followed by 12.9% in ‘Manufacture of basic metals’. On the other hand, the industry group ‘Other manufacturing’ has shown the highest negative growth of (-) 13.5% followed by (-) 12.6% in ‘Manufacture of motor vehicles, trailers and semi-trailers’.

The CNX Nifty is currently trading at 12324.30, up by 67.50 points or 0.55% after trading in a range of 12285.80 and 12337.75. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Infosys up by 3.96%, Coal India up by 2.12%, Sun Pharma Industries up by 1.95%, Wipro up by 1.59% and HCL Technologies up by 1.53%. On the flip side, Yes Bank down by 4.58%, Tata Motors down by 0.84%, Bharti Infratel down by 0.84%, JSW Steel down by 0.47% and Zee Entertainment down by 0.46% were the top losers.

Asian markets are trading mostly in green; Hang Seng increased 235.99 points or 0.82% to 28,874.19, Taiwan Weighted strengthened 68.97 points or 0.57% to 12,093.62, KOSPI rose 15.41 points or 0.7% to 2,221.80 and Shanghai Composite gained 1.73 points or 0.06% to 3,094.02. On the flip side, Jakarta Composite lost 2.03 points or 0.03% to 6,272.91and Straits Times was down by 2.72 points or 0.08% to 3,253.23.