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Benchmarks trade lower in early deals; Nifty slips below 11,900 mark

Indian equity benchmarks have made a pessimistic start and are trading with cut of around one third of a percent amid mixed macro-economic data. Retail inflation spiked to a seven-month high of 3.05 percent in May, though remaining within RBI's comfort level, as kitchen items like vegetables, meat and fish turned dearer. On the other hand, India's industrial output grew to a six-month high of 3.4 percent in April mainly on account of improvement in mining and power generation. Traders remained cautious with a private report that deal making through the private equity/venture capital routes saw a sharp 54 percent dip in May at a low $2.8 billion due to fewer large deals. The dip comes amid data release of sagging GDP growth fuelled largely by a fall in consumption which has been the one of the favourite for investors as well.

On the global front, most of the Asian markets are trading in red terrain at this point of time, weighted down by concerns of a flattening global growth. The US markets ended in red on Wednesday amid lingering trade tensions and questions over the direction of Federal Reserve policy.

Back home, telecom stocks remained in focus with report that the Telecom regulator TRAI extended the timeline for implementation of revised Mobile Number Portability (MNP) norms, by more than three months to September 30, providing relief to operators. Sugar stocks remained buzzing with a private report indicating that sugar output in India may drop to a three-year low next season from a record as dry weather shrivels cane plants in some major growing areas of the country.

The BSE Sensex is currently trading at 39,630.26, down by 126.55 points or 0.32% after trading in a range of 39619.13 and 39724.47. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.51%, while Small cap index was down by 0.52%.

The few gaining sectoral indices on the BSE were Capital Goods up by 0.54%, Industrials up by 0.18%, Energy up by 0.05% and Oil & Gas was up by 0.01%, while Metal down by 1.22%, Basic Materials down by 0.82%, Utilities down by 0.61%, Bankex down by 0.58% and Auto was down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 0.95%, Larsen & Toubro up by 0.91%, Axis Bank up by 0.50%, Bajaj Finance up by 0.29% and Bharti Airtel up by 0.21%. On the flip side, Yes Bank down by 7.80%, Indusind Bank down by 5.28%, Vedanta down by 2.23%, Tata Steel down by 1.40% and Infosys down by 1.24% were the top losers.

Meanwhile, after hitting 21-month low in March, India’s industrial production measured by Index of Industrial Production (IIP) picked up space and accelerated to a six-month high of 3.4% in April mainly on account of improvement in mining and power generation. The IIP had expanded by 4.5% in April 2018. The previous high in IIP growth was recorded at 8.4% in October 2018. As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, IIP with base 2011-12 for the month of April 2019 stood at 126.8, which was 3.4% higher as compared to the level in the month of April 2018. The cumulative growth for the period April-March 2018-19 over the corresponding period of the previous year stood at 3.6%.

On the sectoral front, the manufacturing segment, which constitutes the bulk of the IIP at 77.6%, received a bump in April, rising by 2.8%. The two other sectors in the IIP - electricity and mining - also recovered in April. Electricity generation rose 6.0% in April, more than the 2.16% rise in March. On the other hand, mining output grew by 5.1% in April, against a slight 0.83% rise in the previous month and 3.8% in the year-ago month. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of April 2019 Stood at 107.8, 126.6 and 162.9 respectively. The cumulative growth in these three sectors during April-March 2018-19 over the corresponding period of 2017-18 has been 2.9%, 3.6% and 5.2%, respectively.

The growth in capital goods segment, barometer of investment activities, slowed sharply to 2.5% from a high of 9.8% in April 2018. As per Use-based classification, the growth rates in April 2019 over April 2018 are 5.2% in Primary goods, 1.0% in Intermediate goods and 1.7% in Infrastructure/ Construction Goods. The Consumer durables and Consumer non-durables have recorded growth of 2.4% and 5.2%, respectively.

In terms of industries, 14 out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of April 2019 as compared to the corresponding month of the previous year. The industry group ‘Manufacture of wearing apparel’ has shown the highest positive growth of 33.6% followed by 22.6% in ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’ and 16.3% in ‘Printing and reproduction of recorded media’. On the other hand, the industry group ‘Manufacture of paper and paper products’ has shown the highest negative growth of (-) 12.3% followed by (-) 9.6% in ‘Manufacture of fabricated metal products, except machinery and equipment’ and (-) 3.5% in ‘Manufacture of other transport equipment’.

The CNX Nifty is currently trading at 11870.35, down by 35.85 points or 0.30% after trading in a range of 11863.20 and 11897.40. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.43%, Larsen & Toubro up by 1.03%, TCS up by 0.97%, Cipla up by 0.57% and Axis Bank up by 0.47%. On the flip side, Yes Bank down by 8.42%, Indusind Bank down by 5.40%, Vedanta down by 2.29%, JSW Steel down by 1.62% and Tata Steel down by 1.29% were the top losers.

Most of the Asian markets are trading in red; Nikkei 225 dropped 105.57 points or 0.50% to 21,024.15, Straits Times shed 5.24 points or 0.16% to 3,202.50, Hang Seng declined 235.47 points or 0.86% to 27,072.99, Taiwan Weighted decreased 56.65 points or 0.53% to 10,559.01 and KOSPI was down by 15.12 points or 0.72% to 2,093.63. On the flip side, Jakarta Composite rose 4.27 points or 0.07% to 6,280.45 and Shanghai Composite was up by 3.44 points or 0.12% to 2,912.82.

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