Markets continue to trade weak amid feeble global cues

Indian bourses continued to trade in red in the early noon session amid selling witnessed in front line blue chip stocks. Stocks from Realty, Metal and Bankex counters were trading lower, while Consumer Durables, Healthcare and IT counters were supporting the markets. Feeble global cues coupled with weak macro economic data dented the trading sentiments. Sentiments got a hit as India's retail inflation jumped to a 68-month high of 7.59 percent in January, while industrial output contracted by 0.3 percent in December against a growth of 1.8 percent in November. Domestic sentiments also dampened due to depreciating rupee. Meanwhile, Finance Minister Nirmala Sitharaman stated that the inadequate realisation of GST compensation cess is delaying the payment to states and that the Centre was not according to any differential treatment to states.

On the global front, most of the Asian equity benchmarks are trading lower as the market sentiments dampened with the steep rise in number of new coronavirus cases. Closer home, in scrip specific development, shares of CARE Ratings tumbled by over 7% at this point of time, after reports suggested that S B Mainak, chairman, CARE Ratings has tendered his resignation. Sebi is said to have nudged the rating agency to remove Mainak after adverse findings against him in a forensic report.

The BSE Sensex is currently trading at 41434.19, down by 131.71 points or 0.32% after trading in a range of 41402.09 and 41709.30. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.19%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.44%, Healthcare up by 0.36%, IT up by 0.28%, PSU up by 0.27% and TECK up by 0.21%, while Realty down by 0.90%, Metal down by 0.85%, Bankex down by 0.60%, Industrials down by 0.42% and Telecom was down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.84%, Titan Company up by 2.65%, Mahindra & Mahindra up by 0.84%, TCS up by 0.69% and Infosys was up by 0.61%. On the flip side, Kotak Mahindra Bank down by 1.56%, HCL Tech down by 1.40%, Maruti Suzuki down by 1.30%, Axis Bank down by 1.30% and Indusind Bank was down by 1.19% were the top losers.

Meanwhile, India's factory output growth, measured in terms of Index of Industrial Production (IIP), has contracted by 0.3% in December 2019 as compared to expansion of 2.5% in December 2018, mainly on account of a decline in manufacturing sector output. Industrial production growth had turned positive at 1.8% in November 2019 after contracting for three consecutive months of August (-1.4%), September (-4.6%) and October (-4%). 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 December 2019 stood at 133.5, which was 0.3% lower as compared to the level in the month of December 2018. The cumulative growth for the period April-December 2019 over the corresponding period of the previous year stood at 0.5%.

On the sectoral front, the manufacturing sector output contracted by 1.2% in December 2019 as against a growth 2.9% in the same month last year. Electricity generation also fell by 0.1% as against a growth of 4.5% in December 2018. Mining sector output grew by 5.4% in the month under review, compared to a contraction of 1% in the year ago month. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of December 2019 stand at 120.6, 134.2 and 150.2 respectively. The cumulative growth in these three sectors during April-December 2019 over the corresponding period of 2018 has been 0.6%, 0.5% and 0.8% respectively.

Production of capital goods, a barometer of investment, slumped by 18.2% in December 2019 compared to a growth of 4.2% in the corresponding month of the previous year. As per Use-based classification, the growth rates in December 2019 over December 2018 were 2.2% in Primary goods, 12.5% in Intermediate goods and (-) 2.6% in Infrastructure/ Construction Goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 6.7% and (-) 3.7% respectively.  

In terms of industries, 16 out of the 23 industry groups in the manufacturing sector have shown negative growth during the month of December 2019 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of computer, electronic and optical products’ has shown the highest negative growth of (-) 24.9% followed by (-) 20.3% in ‘Manufacture of machinery and equipment and (-) 15.5% in ‘Printing and reproduction of recorded media’. On the other hand, the industry group ‘Manufacture of basic metals’ has shown the highest positive growth of 14.2% followed by 13.2% in ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’ and 5.9% in ‘Manufacture of leather and related products’. 

The CNX Nifty is currently trading at 12159.45, down by 41.75 points or 0.34% after trading in a range of 12151.95 and 12225.65. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.97%, SBI up by 2.78%, Zee Entertainment up by 2.71%, Titan Company up by 2.49% and Dr. Reddys Lab was up by 0.95%. On the flip side, Coal India down by 1.94%, Kotak Mahindra Bank down by 1.54%, Axis Bank down by 1.37%, HCL Tech down by 1.37% and Maruti Suzuki was down by 1.37% were the top losers.

Asian Markets were trading mostly lower; Straits Times trembled 6.91 points or 0.21% to 3,216.46, Nikkei 225 slipped 53.19 points or 0.22% to 23,808.02, Hang Seng decreased 70.08 points or 0.25% to 27,753.58, Shanghai Composite declined 14.39 points or 0.49% to 2,912.51 and Jakarta Composite was down by 39.78 points or 0.67% to 5,873.30.

On the flip side, KOSPI rose 3.36 points or 0.15% to 2,241.74 and Taiwan Weighted was up by 17.59 points or 0.15% to 11,791.78.