Indices trade firm amid easing retail inflation; Asian Paints leads gainers

Indian equity indices extended their previous session’s gains with optimistic start on Tuesday following the broadly positive cues from global markets overnight coupled with sharp fall in crude oil prices. At this point of trade, markets are trading firm with gains of over half a percent each with buying in all the sector indices. Traders took encouragement from positive macro-economic data -- inflation and industrial growth. Retail inflation declined to a 25-month low of 4.25 per cent in May mainly on account of softening prices of food and fuel items. Besides, India’s industrial production growth rose to 4.2 per cent in April from 1.7 per cent in March 2023, mainly due to good performance by the manufacturing. Traders took note of Chief Economic Advisor (CEA) to the Government of India, V Anantha Nageswaran’s statement that the real gross domestic product (GDP) growth for the year ending March 2023 (FY23) was 7.2 per cent, which surpassed expectations, as the underlying momentum in the economy was quite strong.

On the global front, Asian markets are trading mixed as traders remained cautious as they look ahead to a slew of central bank policy meetings in of the U.S., China, Europe and Japan this week. The US Fed is expected to pause raising interest rates amid signs of cooling inflation and slowing economic growth. Back home on the sectoral front, airline stocks were in focus as Directorate General of Civil Aviation (DGCA) relaxed its norms making it easier for Indian carriers to launch new overseas destinations. Current 33-point checklist pruned to 10 points related to airlines' preparedness for intended operations. In stock specific development, Inox Wind Energy zoomed on its proposed amalgamation with parent Inox Wind.

The BSE Sensex is currently trading at 63065.24, up by 340.53 points or 0.54% after trading in a range of 62777.04 and 63081.71. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.76%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were FMCG up by 1.30%, Consumer Durables up by 0.93%, Telecom up by 0.76%, IT up by 0.63% and Metal up by 0.61%, while there was no loser on the BSE sectoral front. 

The top gainers on the Sensex were Asian Paints up by 2.16%, ITC up by 2.03%, Nestle up by 1.29%, Titan Company up by 1.27% and Axis Bank up by 1.21%. On the flip side, Kotak Mahindra Bank down by 0.32%, HCL Technologies down by 0.09% and Mahindra & Mahindra down by 0.08% were the top losers.

Meanwhile, India’s industrial production growth measured in terms of the Index of Industrial Production (IIP) rose to 4.2 per cent in April, in line with good performance by the manufacturing sector. The latest industrial growth figure is significantly higher than that for March, when it had come in at a five-month low of 1.1 per cent. That number has now been revised to 1.7 per cent. The factory output stood at 6.7 per cent in April 2022. For the month of April 2023, the Quick Estimates of IIP with base 2011-12 stood at 140.2. 

As per the data released by the National Statistical Office (NSO), the manufacturing sector’s output grew 4.9 per cent in April 2023 compared to an increase of 1.2 percent in March. Power generation declined 1.1 per cent in April 2023 following up March's 1.6 percent fall. However, mining output stood at 5.1 per cent during the month under review down from 6.8 percent in March. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of April 2023 stood at 122.5, 138.1 and 192.3 respectively. 

As per use-based classification, the capital goods segment recorded a 6.2 per cent growth in April compared to a 12 per cent expansion a year ago. Consumer durables output during the month declined by 3.5 per cent against a 7.2 per cent growth a year ago. Consumer non-durable goods output grew 10.7 per cent against a contraction of 0.8 per cent a year earlier. Infrastructure/construction goods posted a growth of 12.8 per cent compared to a four per cent expansion in the same period a year ago.

The data also showed that the output of primary goods logged 1.9 per cent growth in the month against 10.3 per cent in the year-ago period. The intermediate goods output in April grew by 0.8 per cent compared to a 7.1 per cent growth during the corresponding month last year. Besides, the indices stood at 142.1 for Primary Goods, 94.0 for Capital Goods, 150.7 for Intermediate Goods and 168.8 for Infrastructure/ Construction Goods for the month of April 2023. Further, the indices for Consumer durables and Consumer non-durables stood at 106.8 and 153.7 respectively for the month of April 2023.

The CNX Nifty is currently trading at 18697.85, up by 96.35 points or 0.52% after trading in a range of 18631.80 and 18700.10. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.23%, ITC up by 2.05%, Titan Company up by 1.58%, Nestle up by 1.33% and Hindustan Unilever up by 1.22%. On the flip side, Hero MotoCorp down by 0.70%, Adani Ports & SEZ down by 0.55%, HDFC Life Insurance down by 0.46%, Kotak Mahindra Bank down by 0.44% and HCL Technologies down by 0.22% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 654.13 points or 1.98% to 33,088.13, Taiwan Weighted jumped 291 points or 1.69% to 17,246.37, Hang Seng advanced 79.61 points or 0.41% to 19,483.92 and KOSPI was up by 13.99 points or 0.53% to 2,643.34. On the other hand, Straits Times fell 16.82 points or 0.53% to 3,179.25 Jakarta Composite declined 2.96 points or 0.04% to 6,719.41 and Shanghai Composite was down by 1.94 points or 0.06% to 3,226.89.