Domestic indices trade marginally higher in volatile session

Indian equity indices started the session in green and soon turned volatile amid mixed global cues. Domestic indices are trading marginally in green in early deals as market participants took some encouragement with easing inflation. The government data showed that retail inflation eased to an 11-month low of 4.83 per cent in April as prices of some kitchen items declined though overall food basket firmed up marginally. The Consumer Price Index (CPI)-based retail inflation was 4.85 per cent in March. Now, investors are eyeing India's wholesale inflation data for April to be out later in the day for more directional cues. However, upside remained limited amid foreign fund outflows. On May 13, Foreign Institutional Investors (FII) offloaded equities valued at Rs 4,498.92 crore. 

On the global front, most of the Asian markets are trading lower, following the mixed cues from Wall Street overnight, as traders remain cautious ahead of key US inflation data, including producer and consumer price inflation, due later in the day that could offer more clarity on the US Fed's interest rate trajectory. Meanwhile, producer prices in Japan were up 0.3 percent on month in April, the Bank of Japan said, accelerating from 0.2 percent in March.

Back home, banking stocks are in focus after Fitch Ratings said asset quality of Indian banks' consumer loans has held up well so far, but an accumulation of untested risks due to rapid growth may challenge lenders' underwriting standards and risk controls. In stock specific development, Shriram Finance traded higher as its board approved the sale of its housing finance subsidiary Shriram Housing Finance to Warburg Pincus for Rs 4,630 crore for equity & convertible instruments of SHFL.

The BSE Sensex is currently trading at 72880.98, up by 104.85 points or 0.14% after trading in a range of 72683.99 and 73002.05. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.38%, while Small cap index was up by 0.86%.

The top gaining sectoral indices on the BSE were Metal up by 1.55%, Utilities up by 1.23%, PSU up by 1.12%, Realty up by 0.93% and Industrials up by 0.88%, while Healthcare down by 0.34% and Bankex down by 0.15% were the only losing indices on BSE.

The top gainers on the Sensex were JSW Steel up by 1.87%, Power Grid up by 1.86%, NTPC up by 1.30%, Mahindra & Mahindra up by 1.08% and Reliance Industries up by 0.81%. On the flip side, Nestle down by 0.97%, Asian Paints down by 0.86%, Axis Bank down by 0.69%, TCS down by 0.57% and ICICI Bank down by 0.52% were the top losers.

Meanwhile, with an aim to enhance regional connectivity and facilitate trade, particularly between India, Iran and Afghanistan, India has signed a 10-year contract to operate the strategic Iranian port of Chabahar. This will help to expand trade with Central Asia. The Chabahar port on the Gulf of Oman – which New Delhi had proposed to develop way back in 2003 - will provide Indian goods a gateway to reach landlocked Afghanistan and Central Asia using a road and rail project called International North-South Transport Corridor, bypassing Pakistan.

US sanctions on Iran over its suspected nuclear programme had slowed the development of the port. The long-term agreement was signed by Indian Ports Global Limited (IPGL) and the Port & Maritime Organisation of Iran. IPGL will invest about $120 million while another $250 million will be raised as debt.

This is the first time India will take over the management of an overseas port that will also have a multiplier effect on trade among India, Iran and Afghanistan as efforts continue to directly tap the potential in Central Asia, bypassing neighbouring Pakistan.

The CNX Nifty is currently trading at 22143.70, up by 39.65 points or 0.18% after trading in a range of 22095.15 and 22182.70. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 3.23%, Hero MotoCorp up by 2.86%, Hindalco up by 2.19%, Power Grid up by 1.84% and JSW Steel up by 1.80%. On the flip side, Cipla down by 2.14%, Adani Ports & SEZ down by 1.00%, Tata Consumer Products down by 0.97%, Nestle down by 0.96% and Apollo Hospital down by 0.95% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 25.23 points or 0.13% to 19,089.83, Jakarta Composite declined 14.65 points or 0.21% to 7,084.61, Shanghai Composite weakened 3.87 points or 0.12% to 3,144.15, Straits Times fell 1.96 points or 0.06% to 3,301.70 and KOSPI was down by 0.91 points or 0.03% to 2,726.30. On the other hand, Taiwan Weighted rose 56.96 points or 0.27% to 20,914.67 and Nikkei 225 was up by 34.86 points or 0.09% to 38,214.32.