Domestic indices trade higher in early deals amid easing retail inflation

Indian markets made a positive start on Monday following a respite in the CPI inflation, which fell to an 18-month low of 4.7% in April on the back of a high base and easing price pressures across categories, giving the central bank elbow room to maintain an extended pause on policy rates. Domestic indices are trading firm in early deals with traders reacting positively to Q4 earnings. Sentiments got boost with Reserve Bank of India Governor Shaktikanta Das’ statement that the cooling off in headline inflation to 4.7 per cent during April is ‘very satisfying’. The governor said the release of the official data on Friday gives confidence that the ‘monetary policy is on the right track’. Foreign fund inflows also aided domestic sentiments. Foreign institutional investors (FII) bought shares worth Rs 1,014.06 crore on May 12, provisional data from the National Stock Exchange showed. Now, investors are eyeing WPI data for April to be out later in the day.

On the global front, most of the Asian markets are trading lower following the broadly negative cues from Wall Street on Friday, as traders are cautious after data showed a drop in U.S. consumer sentiment amid signs of growing stress in the banking sector and the impasse over raising the U.S. debt ceiling. Back home, in stock specific development, Tata Motors gained on posting a net profit of Rs 5,408 crore in Q4FY23 as against a net loss of Rs 1,033 crore last year. On the other hand, Dish TV fell after it reported consolidated net loss of Rs 1,720 crore in Q4FY23.

The BSE Sensex is currently trading at 62215.16, up by 187.26 points or 0.30% after trading in a range of 61950.30 and 62227.83. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.18%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Realty up by 1.61%, Auto up by 0.68%, Telecom up by 0.54%, FMCG up by 0.45% and IT up by 0.44%, while Utilities down by 0.55%, Power down by 0.49%, Healthcare down by 0.18%, Oil & Gas down by 0.05% and Energy down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.99%, Tech Mahindra up by 1.19%, Hindustan Unilever up by 1.03%, Asian Paints up by 0.79% and Infosys up by 0.76%. On the flip side, Sun Pharma down by 0.75%, Maruti Suzuki down by 0.62%, Indusind Bank down by 0.41%, NTPC down by 0.37% and Reliance Industries down by 0.20% were the top losers.

Meanwhile, with poor performance of power and manufacturing sectors, India’s industrial production growth measured in terms of the Index of Industrial Production (IIP) slipped to five-month low of 1.1 per cent in March 2023 from 5.8 per cent in February 2023. The previous lowest level of growth was recorded in October 2022 at a contraction of 4.1 per cent. The factory output growth stood at 2.2 per cent in March 2022. For the month of March 2023, the Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 stood at 150.5. For fiscal 2022-23, the growth in IIP works out to be 5.1 per cent, down from 11.4 per cent in the preceding year.

As per the data released by the National Statistical Office (NSO), the manufacturing sector’s output grew 0.5 per cent in March 2023 as against 1.4 per cent a year ago. Power generation declined by 1.6 per cent in March 2023 against a growth of 6.1 per cent. Mining output rose by 6.8 per cent during the month under review compared to a growth of 3.9 in the year-ago period. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of March 2023 stand at 154.2, 146.0 and 188.0 respectively.

As per use-based classification, the capital goods segment recorded a growth of 8.1 per cent in March against a growth of 2.4 per cent a year ago. Consumer durables output during the month declined by 8.4 per cent against a contraction of 3.1 per cent a year ago. Consumer non-durable goods output too declined by 3.1 per cent against a contraction of 4.4 per cent earlier. Infrastructure/construction goods posted a growth of 5.4 per cent compared to a 6.7 per cent expansion in the same period a year ago.

The data also showed that the output of primary goods logged 3.3 per cent growth in the month against 5.7 per cent in the year-ago period. The intermediate goods output in March grew by 1 per cent compared to a growth of 1.8 per cent during the corresponding month last year. Besides, the indices stand at 158.2 for Primary Goods, 120.9 for Capital Goods, 158.2 for Intermediate Goods and 178.7 for Infrastructure/ Construction Goods for the month of March 2023. Further, the indices for Consumer durables and Consumer non-durables stand at 118.1 and 145.6 respectively for the month of March 2023.

The CNX Nifty is currently trading at 18364.75, up by 49.95 points or 0.27% after trading in a range of 18287.90 and 18366.65. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.94%, Eicher Motors up by 1.73%, Bajaj Auto up by 1.15%, Tech Mahindra up by 1.11% and Britannia Industries up by 1.06%. On the flip side, Cipla down by 3.23%, Adani Enterprises down by 3.21%, Adani Ports & SEZ down by 1.14%, Divi's Lab down by 0.94% and Sun Pharma down by 0.78% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 39.8 points or 0.26% to 15,462.56, Shanghai Composite weakened 30.78 points or 0.95% to 3,241.58, Jakarta Composite plunged 24.89 points or 0.37% to 6,682.87, Straits Times fell 5.84 points or 0.18% to 3,202.71 and KOSPI dropped 5.11 points or 0.21% to 2,470.31. On the other hand, Nikkei 225 surged 216.81 points or 0.73% to 29,605.11 and Hang Seng was up by 31.54 points or 0.16% to 19,658.78.