Benchmarks relinquish all gains; higher CPI perturbs

Relinquishing all the gains, Indian equity markets slipped near intra-day low as higher CPI data deflated the enthusiasm seen on account of release of January factory output data, which was the highest since October. February CPI inflation number disappointed market, coming in at over 10 percent for the third consecutive month. Thus, trading near day’s low, Sensex was off its 19,600 mark, while, Nifty, continued to hold the crucial 5,900 bastion. Broader indices too capitulating to selling pressure, was trading in the red zone. Globally, Chinese stocks managed to lure some traction in quiet Asian trade as investors hoped for fresh policy measures to support China's economy. Back home, sectorally, Fast Moving Consumer Goods was the lone gainer, while Consumer Durable, Banking and TECk witnessed massive profit-booking. Hopes that higher inflation data would discourage RBI from slashing rates at its upcoming monetary policy on March 19, mainly dragged the banking index lower. The market breadth favoring negative trend; there were 1,055 shares on the gaining side against 1,365 shares on the losing side while 108 shares remain unchanged.

The BSE Sensex is currently trading at 19,569.56, down by 76.65 points or 0.39% after trading in a range of 19,697.84 and 19,556.45. There were 8 stocks advancing against 20 declines and 2 stocks remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap and Small cap indices were trading lower by 0.40% and 0.25% respectively.

The top losing sectoral indices on the BSE were, Consumer Durables down by 1.02%, Bankex down by 0.95%, Teck down by 0.95%, IT down by 0.89% and Power down by 0.71%, while FMCG up by 0.44% was the sole gainer on the BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.65%, Mahindra & Mahindra up by 0.44%, ITC up by 0.40%, Dr Reddys Lab up by 0.25% and RIL up by 0.24%.

On the flip side, Tata Power down by 2.03%, Bharti Airtel down by 1.97%, Bajaj Auto down by 1.66%, HDFC Bank down by 1.50% and Tata Steel down by 1.36%, were the top losers on the Sensex.

Meanwhile, in a pleasant surprise, India's annual industrial output growth measured by index of industrial production (IIP) grew by 2.4% at 181.8 for the month of January 2013 against contraction of 0.6%, later revised to -0.5% in the previous month. The numbers were way above the street expectations of over 1% growth figure. The cumulative growth for the period April-December 2012-13 over the corresponding period of the previous year stood at 1%.

The three sectors constituting the index showed marked improvement as compared to the December figures. Manufacturing sector, which constitutes about 75.53 percent of industrial production, expanded by 2.7% from a year earlier and also higher than contraction of 0.7% in the previous month. Mining sector, which constitutes about 14.6 percent of industrial production, after witnessing massive contraction of 4.0% (y-o-y) in the previous month, yet again showed contraction, narrowed at 2.9% in January.

Meanwhile, electricity sector, showcasing growth rose to 6.4% from a year earlier and also higher against 5.2% in the previous month. Cumulative growth in the three sectors during April-January 2012-13 over the corresponding period of 2011-12 has been (-) 1.9%, 0.9% and 4.7% respectively.

However, Capital goods output, a key investment indicator, stood at -1.8% against -0.9% in December. Consumer goods grew by 2.8% against massive contraction of 4.2% in the previous month, driven by growth of Consumer durables and Consumer non-durables at -0.9% and 5.3% respectively.

Interestingly, output in the country's eight key infrastructure industries, also known as the core sector and accounting for almost 40% of factory production, grew an annual 3.9% in January, in yet another sign that the economy was improving.

The CNX Nifty is currently trading at 5,915.45 down by 26.90 points or 0.45% after trading in a range of 5,961.80 and 5,935.65. There were 13 stocks advancing against 37 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 2.21%, Hindustan Unilever up by 1.71%, ACC up by 1.64%, Ambuja Cements up by 1.20% and M&M up by 0.48%.

On the flip side, Cairn down by 2.44%, Tata Power down by 2.08%, Siemens down by 1.99%, Bajaj-Auto down by 1.86% and Power Grid down by 1.81%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 1.44%, Hang Seng slipped 0.50%, KLSE Composite dipped by 0.12%, KOSPI Composite dropped 0.50%, Nikkei 225 down by 0.28% and Taiwan Weighted was down by 0.55%. On the flip side, Straits Times was up by 0.55%.

Jakarta Composite remained shut for the trade today.