Domestic indices open in red amid rising retail inflation

Indian equity benchmarks made negative start on Wednesday tracking weakness in Asian counterparts as traders seem reluctant to make significant moves ahead of the US Fed's final monetary policy announcement this year later in the day. The Fed is widely expected to leave interest rates unchanged. The US data showing persisting inflationary pressures reinforced the view that the Fed is unlikely to cut interest rates anytime soon. Sensex and Nifty are trading lower with marginal cut in early deals amid rise in November retail (CPI) inflation. Retail inflation in November bucked the downward trend, reaching a three-month high partly because of a seasonal spike in vegetable prices. However, downside remained capped amid better-than-expected growth in the October Industrial Production data. India’s industrial production hit a 16-month high in October, aided by a favourable base effect. Also, overnight sharp fall in crude oil prices also helped the markets to limit the losses. 

On the sectoral front, baking stocks are in focus with report that public sector banks (PSBs) have written off aggregate loan amount of Rs. 10.42 lakh crore in the last nine years; according to data provided by the government in Parliament. In stock specific development, Force Motors traded higher amid report that the company will acquire 12.21 per cent shares in TP Surya, a subsidiary of Tata Power Renewable Energy. The cost of acquisition stands at Rs 2,68,74,210. 

The BSE Sensex is currently trading at 69478.88, down by 72.15 points or 0.10% after trading in a range of 69420.82 and 69655.83. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.35%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were PSU up by 0.92%, Auto up by 0.63%, Utilities up by 0.48%, Basic Materials up by 0.45% and Capital Goods up by 0.36%, while TECK down by 0.80%, IT down by 0.79%, Bankex down by 0.28% and Consumer Durables down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.26%, Power Grid up by 1.40%, Mahindra & Mahindra up by 1.28%, Ultratech Cement up by 1.23% and Larsen & Toubro up by 0.80%. On the flip side, TCS down by 1.61%, Infosys down by 1.25%, Axis Bank down by 1.22%, Tech Mahindra down by 0.82% and Bajaj Finserv down by 0.75% were the top losers.

Meanwhile, with the help of strong performance in the manufacturing, mining and electricity generation sectors, India’s industrial production growth jumped to a 16-month high of 11.7 per cent in October 2023 compared to the same month of the previous year. Index of Industrial Production (IIP) growth had come in at a three-month low of 5.8 percent in September. This has been revised at 6.2 per cent. Factory output measured in terms of the IIP had contracted by 4.1 per cent in October 2022.

The data released by the National Statistical Office (NSO) showed that the manufacturing sector, which provides quality jobs to young engineers and graduates passing out of the country’s universities, posted a double digit growth rate of 10.4 per cent during October 2023 from a contraction of 5.8 per cent in October 2022. The mining sector production shot up by 13.1 per cent against 2.6 per cent in October 2022, while electricity generation surged by as much as 20.4 per cent sharply higher than the 1.2 percent growth it had posted the same month previous year.

In terms of the use-based classification of goods, production growth in October was higher for all six categories compared to September. The capital goods segment grew 22.6 per cent in October this year compared to a 2.4 per cent contraction in the year-ago month. The intermediate goods output in October rose 9.7 per cent against a contraction of 2.3 per cent growth during the corresponding month last year. Infrastructure/construction goods posted a growth of 11.3 per cent against a 1.7 per cent expansion. Consumer durables output during the month grew by 15.9 per cent against a contraction of 18.1 per cent. Consumer non-durable goods output increased by 8.6 per cent compared to a contraction of 13 per cent a year earlier. 

The data also showed that the output of primary goods logged 11.4 per cent growth in the month compared to 2.1 per cent in the year-ago period. The indices stood at 146.1 for Primary Goods, 106.9 for Capital Goods, 157.8 for Intermediate Goods and 173.9 for Infrastructure/ Construction Goods for the month of October 2023. Further, the indices for Consumer durables and Consumer non-durables stood at 123.0 and 141.5 respectively for the month of October 2023.

The CNX Nifty is currently trading at 20883.40, down by 23.00 points or 0.11% after trading in a range of 20877.35 and 20936.00. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.98%, Eicher Motors up by 1.68%, Power Grid up by 1.60%, Hero MotoCorp up by 1.41% and Ultratech Cement up by 1.37%. On the flip side, TCS down by 1.45%, HDFC Life Insurance down by 1.39%, Axis Bank down by 1.30%, Infosys down by 1.25% and Apollo Hospital down by 0.83% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 121.83 points or 0.74% to 16,252.67, Jakarta Composite plunged 42.57 points or 0.6% to 7,082.74, Shanghai Composite weakened 14.29 points or 0.48% to 2,989.15, KOSPI dropped 14.11 points or 0.56% to 2,521.16 and Straits Times was down by 1.73 points or 0.06% to 3,100.58. On the other hand, Nikkei 225 surged 75.25 points or 0.23% to 32,918.95 and Taiwan Weighted was up by 9.86 points or 0.06% to 17,460.49.