Weakness persists over Dalal Street amid rise in WPI inflation

A weakness continued over the Dalal Street during early afternoon deals, with both Sensex and Nifty trading lower, tracking weak cues from other Asian markets as investors fretted about escalating tensions between Iran and Israel and its potential impact on crude oil prices, inflation and the likelihood of rate cuts. Sentiments remained downbeat as the provisional data released by the Ministry of Commerce & Industry showed that India’s wholesale price index (WPI)-based inflation accelerated to 0.53 per cent in March on an annual basis, as against 0.20 per cent in February. WPI inflation stood at 1.34 per cent in March 2023.

On the global front, Asian markets were trading mostly in red, even after the value of core machine orders in Japan jumped by a seasonally adjusted 7.7 percent on month in February, coming in at 886.6 billion yen. That blew away expectations for an increase of 0.8 percent following the 1.7 percent drop in January. On a yearly basis, core machine orders slipped 1.8 percent - but that also beat forecasts for a decline of 5.0 percent after slumping 10.9 percent in the previous month.

Back home, auto industry stocks were in watch, as the Society of Indian Automobile Manufacturers (SIAM) has said that passenger vehicle (PV) wholesales in India touched a record high of 42,18,746 units in the financial year 2023-24 (FY24), registering a year-on-year growth of 8.4 per cent, as compared to overall passenger vehicle dispatches of 38,90,114 units in fiscal year 2022-23. As per the latest data issued by the SIAM, two-wheeler sales were up 13.3 per cent last fiscal at 1,79,74,365 units, as compared to 1,58,62,771 units in the financial year 2022-23.

The BSE Sensex is currently trading at 73826.65, down by 418.25 points or 0.56% after trading in a range of 73315.16 and 73905.80. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.89%, while Small cap index was down by 0.87%.

The few gaining sectoral indices on the BSE were Oil & Gas up by 1.05%, Energy up by 0.95% and Metal up by 0.72%, while IT down by 1.15%, Bankex down by 1.01%, FMCG down by 0.88%, TECK down by 0.85% and Consumer discretionary down by 0.75% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.15%, Nestle up by 1.09%, Reliance Industries up by 0.81%, Maruti Suzuki up by 0.47% and JSW Steel up by 0.21%. On the flip side, ICICI Bank down by 1.82%, Hindustan Unilever down by 1.70%, Tech Mahindra down by 1.67%, Tata Motors down by 1.41% and HCL Tech. down by 1.33% were the top losers.

Meanwhile, with cooling food prices, Consumer Price Index (CPI) based retail inflation declined to a five-month low of 4.85 per cent in March 2024.The CPI was 5.09 per cent in February and 5.66 per cent in March 2023. Previously, CPI-based inflation was the lowest at 4.87 per cent in October 2023. The inflation remained within the Reserve Bank of India’s (RBI) comfort zone. The government has tasked the RBI to ensure inflation remains at 4 per cent, with a margin of 2 per cent on either side.

The National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) in its data has showed that Rural CPI (General) in March 2024 stood at 5.45 per cent over 5.34 per cent in February 2024. The Urban CPI (General) stood at 4.14 per cent in March as against 4.78 per cent in February. The index value for Rural, Urban and Combined CPI (General) stood at 187.7, 183.6 and 185.8 respectively, in March 2024. The price data are collected from selected 1114 urban Markets and 1181 villages covering all States/UTs through personal visits by field staff of Field Operations Division of NSO, MoSPI on a weekly roster.

The inflation in the food basket was at 8.52 per cent in March, down from 8.66 per cent in February. Prices of cereals at 8.37 per cent versus 7.60 per cent a month ago, and meat and fish at 6.36 per cent compared to 5.21 per cent in February. Meanwhile, inflation in vegetables stood at 28.34 per cent against 30.25 per cent in previous month and pulses exhibited inflation of 17.71 per cent compared to 18.90 per cent in February. In total, the food and beverages inflation stood at 7.68 per cent in March, lower than 7.76 per cent in February. Beyond food, fuel and light inflation fell further from (-) 0.77 per cent in February to (-) 3.24 per cent in March, while housing inflation dropped to 2.77 per cent from 2.88 per cent sequentially.

The CNX Nifty is currently trading at 22400.75, down by 118.65 points or 0.53% after trading in a range of 22263.55 and 22427.45. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were ONGC up by 5.18%, Hindalco up by 3.62%, NTPC up by 1.17%, Nestle up by 1.17% and Reliance Industries up by 0.81%. On the flip side, Shriram Finance down by 2.24%, Tata Consumer Products down by 2.05%, ICICI Bank down by 1.91%, Hindustan Unilever down by 1.75% and Tech Mahindra down by 1.66% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 110.02 points or 0.66% to 16,611.67, Taiwan Weighted lost 286.8 points or 1.4% to 20,449.77, Straits Times fell 32.89 points or 1.02% to 3,184.02, KOSPI dropped 11.39 points or 0.43% to 2,670.43 and Nikkei 225 slipped 290.75 points or 0.74% to 39,232.80, while Shanghai Composite strengthened 30.54 points or 1.01% to 3,050.01.