Domestic indices trade lower in early deals ahead of inflation data

Indian equity benchmarks made flat start on first trading session of the week ahead of inflation data to be out later in the day amid weakness in the global markets. Now, domestic indices are trading lower with marginal cut of around 0.20% each in early deals. Traders were concerned as growth in factory output decelerated to a two-month low of 4.3 per cent in December as manufacturing dragged the overall growth in the Index of Industrial Production (IIP) even as mining and electricity production grew at a robust pace. Some cautiousness also came in as RBI data showed India's foreign exchange reserves dropped by $1.494 billion to reach $575.267 billion as of February 3, snapping a three-week rising trend. Meanwhile, rupee opened lower against US dollar and is trading down by 15 paise at 82.73, tracking losses in Asian currencies and shares on concerns over the U.S. interest rate outlook.

Globally, trading mood is somewhat somber with most of the Asian markets are trading lower reflecting lingering uncertainty about the outlook for interest rates ahead of this week's release of the closely watched US inflation data. Back home, Adani Group stocks would continue to remain in focus after Moody’s changed the outlook of four Adani Group companies to ‘negative’ from ‘stable’.

The BSE Sensex is currently trading at 60559.79, down by 122.91 points or 0.20% after trading in a range of 60458.28 and 60740.95. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.28%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were Metal up by 1.12%, Telecom up by 0.67%, Capital Goods up by 0.47%, Consumer Durables up by 0.43%, Industrials up by 0.42%, while IT down by 1.37%, TECK down by 1.12%, Utilities down by 0.67%, Power down by 0.66%, Oil & Gas down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.58%, Tata Steel up by 1.38%, Power Grid up by 0.89%, NTPC up by 0.85% and Sun Pharma up by 0.83%. On the flip side, Infosys down by 1.81%, TCS down by 1.26%, Bajaj Finance down by 1.16%, Tech Mahindra down by 1.04% and SBI down by 0.87% were the top losers.

Meanwhile, with subdued performance of the manufacturing, India's industrial production growth slipped to 4.3 per cent in December from 7.3 per cent in November 2022. However, there was improvement on an annual basis as the factory output growth measured in terms of the Index of Industrial Production (IIP) stood at 1 per cent in December 2021. For the month of December 2022, the Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 stood at 144.7. In the nine months of the fiscal (April-December), the growth in IIP works out to be 5.4 per cent, down from 15.3 per cent in the year-ago period.

As per the IP data released by the National Statistical Office (NSO), the manufacturing sector's output grew by 2.6 per cent in December 2022 from 0.6 per cent a year ago. The growth stood at 6.4 per cent in the preceding month of November 2022. Mining output rose by 9.8 per cent during the month under review, from 2.6 per cent in December 2021. Power generation increased by 10.4 per cent in December 2022 compared to 2.8 per cent in the year-ago month. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of December 2022 stood at 132.2, 143.5 and 179.4 respectively.

As per use-based classification, the capital goods segment recorded a growth of 7.6 per cent in December against a decline of 3 per cent in the corresponding month of the last fiscal. Consumer durables output declined by 10.4 per cent compared to a contraction of 1.9 per cent a year ago. Consumer non-durable goods output expanded by 7.2 per cent, as against a growth of 0.3 per cent earlier. Infrastructure/construction goods too posted a growth of 8.2 per cent as against 2 per cent in the same month of 2021. The data also showed that the output of primary goods logged 8.3 per cent growth in the month as against 2.8 per cent in the same period a year ago. The intermediate goods output growth declined to 0.3 per cent from 1 per cent earlier.

The CNX Nifty is currently trading at 17830.00, down by 26.50 points or 0.15% after trading in a range of 17801.50 and 17880.70. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 1.53%, Eicher Motors up by 1.45%, Tata Steel up by 1.38%, Dr. Reddy's Lab up by 1.18% and Hindalco up by 1.18%. On the flip side, Infosys down by 1.81%, TCS down by 1.32%, Bajaj Finance down by 1.11%, Tech Mahindra down by 1.01% and HDFC Life Insurance down by 0.87% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 272.84 points or 1% to 27,398.14, Hang Seng declined 113 points or 0.54% to 21,077.42, Taiwan Weighted lost 43.85 points or 0.28% to 15,542.80, Straits Times fell 27.15 points or 0.81% to 3,333.54 and KOSPI dropped 18.53 points or 0.76% to 2,451.20. On the other hand, Jakarta Composite gained 17.38 points or 0.25% to 6,897.71 and Shanghai Composite strengthened 17.4 points or 0.53% to 3,278.07.