Ugly WPI inflation numbers drag benchmarks lower

Indian equity benchmarks pare all of their intraday gains and entered into red terrain in noon deals after data showed inflation based on wholesale price index (WPI) accelerated in August 2013. The August WPI inflation has surprisingly shot back to over 6 percent mark coming at 6.10%, as compared to 5.79% (provisional) for the previous month and 8.01% during the corresponding month of the previous year. In other shock, the June WPI inflation data has been revised to 5.16% from the 4.86% provisional.

However, global cues remained jubilant as European markets opened higher with CAC, DAX and FTSE all trading with a significant gain of over half percentage point in early deals. Moreover, most of the Asian equity markets were trading in the green at this point of time as Lawrence Summers withdrew from consideration to be the next Federal Reserve chairman, paving the way for Janet Yellen, who is said to be in favour of a slower reduction in US stimulus.

Back home, Indian rupee too has pared some of its early gains after touching four weeks high and is trading at 62.71 per dollar as against previous close of 63.48 per dollar. On the sectoral front, banking witnessed the maximum gain in trade followed by power and auto, while healthcare, realty and software remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction, while the market breadth on the BSE turned negative; there were 1014 shares on the gaining side against 1068 shares on the losing side while 111 shares remain unchanged.

The BSE Sensex is currently trading at 19693.55 down by 39.21 points or 0.20% after trading in a range of 20086.43 and 19688.47. There were 17 stocks advancing against 13 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.46%, while Small cap index also down by 0.29%.

The top gaining sectoral indices on the BSE were, Bankex up by 1.18%, Power up by 1.59%, Auto up by 0.05% and Consumer Durables up by 0.02%. While, Healthcare down by 2.02%, Realty down by 1.73%, IT down by 1.70%, Teck down by 1.19% and Metal down by 1.13% were the losing indices on BSE.

The top gainers on the Sensex were, Maruti Suzuki up by 3.18%, ICICI Bank up by 3.04%, Hero Moto Corp up by 2.32%, Bharti Airtel up by 2.15% and Mahindra and Mahindra up by 1.64%. On the flip side, Sesa Goa down by 2.64%, BHEL down by 2.42%, Coal India down by 2.22%, Tata Motors down by 1.84% and TCS down by 1.68% were the top losers on the Sensex.

Meanwhile, in a move to boost the country’ s infrastructure development, the Cabinet Committee on Investment (CCI) headed by the Prime Minister is likely to contemplate approval of seven stalled mega infrastructure projects, envisaging investment of around Rs 1.6 lakh crore. The proposed projects have an average size of about Rs 25,000 crore and have been stalled because of lack of various regulatory clearances. Now, the government wants to expedite clearance of these projects, which involves companies such as Mangalore Refinery and Petrochemicals and Indian Oil Corporation among others. 

The government had set up the CCI, to clear the bottlenecks holding back big infrastructure projects. So far, the committee has cleared 209 projects with an aggregate investment of Rs 3,84,203 crore. Meanwhile, last month, CCI has approved 36 infrastructure projects worth Rs 1.83 lakh crore, including 18 power projects worth Rs 83,773 crore, which were stalled because of lack of fuel linkages. Further, in order to speed up the implementation of infrastructure projects, the government has also set up special cell, special project monitoring group, which is meant to supplement CCI's efforts and has been tasked with monitoring the progress of projects cleared earlier by CCI. For the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector.

Moreover, in order to encourage investments, the government has been asking public sector enterprises (PSEs) to achieve their capital expenditure plans. The government has set Rs 1.41 lakh crore capital expenditure target for the 23 PSEs, which include ONGC, Gail, NMDC, NTPC and Coal India among others.

The CNX Nifty is currently trading at 5,846.50 down by 4.10 points or 0.07% after trading in a range of 5,957.25 and 5,835.55. There were 24 stocks advancing against 26 declines on the index.

The top gainers of the Nifty were Maruti Suzuki up by 3.62%, ICICI Bank up by 2.89%, Power Grid up by 2.61%, Hero Moto Corp up by 2.46% and Bharti Airtel up by 2.23%. On the flip side, Ranbaxy down by 28.57%, HCL Tech down by 5.27%, BHEL down by 2.77%, Sesa Goa down by 2.64% and Coal India down by 2.30% were the major losers on the index.

The most of the Asian equity indices were trading in green; Seoul Composite up by 0.96%, Taiwan Weighted up by 1.39%, Straits Times up by 1.85%, Hang Seng up by 1.16%, Nikkei 225 was up by 0.12% and Jakarta Composite up by 2.29%, while KLSE Composite down by 0.09% and Shanghai Composite down by 0.22%.

All the European markets were trading in green; France’s CAC 40 was up by 0.78%, UK’s FTSE 100 up by 0.77% and Germany’s DAX up by 1.09%.