Bourses remain lackluster amid rising inflation in country

Indian equity bourses remained lackluster in late afternoon deals, tracking weak European markets along with rising inflation in the country. India’s Wholesale price index (WPI) inflation spiked sharply to 3.1 percent in the month of January 2020 as against 2.59 percent for the previous month and 2.76 percent during the corresponding month of the previous year. Adding more anxiety among traders, a report by Moody's said that the Reserve Bank of India's recent asset recognition norms that allows banks not to treat real estate loans as restructured for one year is credit negative for Indian banks.

On the global front, European markets were trading in red, as German economy stagnated in the fourth quarter of 2019 amid slower consumption and weaker exports. The preliminary figures from Destatis showed that gross domestic product was unchanged from the previous quarter on a seasonally and calendar-adjusted basis.  However, Asian markets were trading in green, even after Japan's tertiary industry activity declined unexpectedly in December. The data from the Ministry of Economy, Trade and Industry showed that the tertiary industry activity index fell 0.2 percent month-on-month in December.

The BSE Sensex is currently trading at 41288.30, down by 171.49 points or 0.41% after trading in a range of 41183.13 and 41702.36. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.63%, while Small cap index was down by 0.09%.

The top gaining sectoral indices on the BSE were Telecom up by 2.11%, Energy up by 0.76%, Consumer Durables up by 0.32%, Capital Goods up by 0.12% and TECK up by 0.10%, while Utilities down by 2.24%, Power down by 2.00%, PSU down by 1.50%, FMCG down by 1.17% and Bankex down by 1.08% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.24%, HCL Tech. up by 1.44%, Reliance Industries up by 1.28%, ICICI Bank up by 1.05% and Tech Mahindra up by 0.88%. On the flip side, Indusind Bank down by 3.11%, Power Grid down by 2.31%, NTPC down by 2.09%, SBI down by 2.05% and ONGC down by 1.80% were the top losers.

Meanwhile, Union Textile Secretary Ravi Capoor has said that the Central government would address all issues in its new National Textile Policy which may be announced in a couple of months. Capoor said the policy will ensure basic raw materials availability at international price and encourage scale-up of operation by developing 10 mega textile parks with over 1,000 acres of land closer to the ports, among others.

He quoted, a statement from the Confederation of Indian Textile Industry (CITI), the new policy would address power cost, credit cost and its availability and expedite conclusion of the free trade agreements with EU, the UK and other countries to boost exports. He exhorted the textile industry, especially in Tamil Nadu, to diversify into polyester segment to boost exports.

The global textiles market of cotton and man-made fibre is in the ratio of 30:70 while it was the reverse in India. Of the total textile exports, cotton textiles accounted 80 per cent due to the price advantage of the home- grown cotton, while it is only 20 per cent in the man-made fibre segments due to the expensive raw material.

The CNX Nifty is currently trading at 12127.60, down by 47.05 points or 0.39% after trading in a range of 12097.90 and 12246.70. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.08%, Yes Bank up by 4.03%, UPL up by 2.90%, BPCL up by 1.92% and HCL Tech. up by 1.49%. On the flip side, Bharti Infratel down by 5.11%, GAIL India down by 4.95%, Eicher Motors down by 3.80%, Indusind Bank down by 3.17% and Power Grid down by 2.49% were the top losers.

Asian Markets were trading mostly higher; Hang Seng increased 95.92 points or 0.35% to 27,825.92, Taiwan Weighted strengthened 23.92 points or 0.2% to 11,815.70, KOSPI rose 10.63 points or 0.48% to 2,243.59, Shanghai Composite gained 4.53 points or 0.16% to 2,910.60, Straits Times was up by 0.51 points or 0.02% to 3,220.60. On the flip side, Jakarta Composite lost 3.40 points or 0.06% to 5,868.55 and Nikkei 225 was down by 140.14 points or 0.59% to 23,687.59.

European markets were trading mostly in red, UK’s FTSE 100 lost 21.07 points or 0.28% to 7,430.96 and France’s CAC fell 8.45 points or 0.14% to 6,084.69, while Germany’s DAX was up by 4.95 points or 0.04% to 13,750.38.