Benchmarks turn red on profit booking in early deals

Indian equity benchmarks have entered into red terrain after a firm start as investors opted to book profits at higher levels. Meanwhile, retail inflation rose to 5.37 percent in February, the third consecutive month of uptick, the industrial output grew by modest 2.6 percent in January, diminishing hopes of another rate cut by the Reserve Bank. However, losses remained capped as some support came in with India and Mauritius agreeing to fast-track the long-pending revision of Double Taxation Avoidance Agreement (DTAA) to prevent abuse of the convention.

On the global front, the US markets ended sharply higher in last session, though Commerce Department said retail sales slid in February for the third straight month, but it made the dollar weak and supported the markets. Traders also reacted positively to news that the Fed gave several major banks approval to launch capital repurchase programs and dividend increases. The Asian markets were trading mostly in the green at this point of time, after an unexpected drop in American retail sales strengthened the case for keeping interest rates lower for longer.

Back home, on the sectoral front, capital goods and healthcare remained the only gainers in the trade, while software, technology and fast moving consumer goods remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1018 shares on the gaining side against 886 shares on the losing side while 75 shares remain unchanged.

The BSE Sensex is currently trading at 28886.15, down by 44.26 points or 0.15% after trading in a range of 28809.07 and 29183.76. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14%, while Small cap index up by 0.33%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.02% and Healthcare up by 0.01% while, IT down by 0.69%, TECK down by 0.57%, FMCG down by 0.52%, Metal down by 0.34% and Auto down by 0.33% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.35%, ICICI Bank up by 0.95%, Coal India up by 0.59%, Cipla up by 0.44% and ONGC up by 0.29%. On the flip side, Sun Pharma down by 1.35%, Hindalco down by 1.11%, Wipro down by 1.04%, GAIL India down by 0.99% and Maruti Suzuki down by 0.89% were the top losers.

Meanwhile, In a positive surprise, the index for industrial output (IIP) for the month of January came in at 2.6%, way higher than street expectation of 0.50% and also higher compared to 1.7% in December mainly on account of splendid growth of manufacturing sector. IIP for the month of January, 2015 stood at 2.5%. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of January 2015 stood at 135.3, 200.5 and 175.8 respectively, with the corresponding growth rates of (-) 2.8%, 3.3% and 2.7% as compared to January 2015. The cumulative growth in the three sectors during April-January 2014-15 over the corresponding period of 2013-14 has been 1.3%, 1.7% and 9.3% respectively.

As per use-based classification, the growth rates in January 2015 over January 2014 are 4.5% in Basic goods, 12.8% in Capital goods and (-) 0.8% in Intermediate goods. The Consumer durables and Consumer non-durables have recorded growth of (-) 5.3% and (-) 0.1% respectively, with the overall growth in Consumer goods being (-) 1.9%.

Sector-wise, high growth was witnessed in Electrical machinery and apparatus n.e.c.’ has shown the highest positive growth of 28.1%, followed by 23.5% in ‘Furniture; manufacturing n.e.c.’ and 15.3% in ‘Rubber and plastics products’.On the flip side, high negative growth was reported in Radio, TV and communication equipment & apparatus’ has shown the highest negative growth of (-) 51.3%, followed by (35.1%) in ‘Office, accounting & computing machinery’ and (-) 9.7% in ‘Fabricated metal products, except machinery & equipment’.

The latest data bolsters hope of RBI further obliging the street with rate cut in its upcoming monetary policy in April, 2015. Previously in surprise move and outside the policy review, Reserve Bank of India slashed interest rates by 25 basis points on March 4 from 7.75% to 7.5%.

The CNX Nifty is currently trading at 8,754.70, down by 21.30 points or 0.24% after trading in a range of 8,729.85 and 8,849.75. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were HDFC up by 1.38%, ICICI Bank up by 0.86%, Lupin up by 0.83%, Coal India up by 0.60% and IDFC up by 0.56%. On the flip side, Jindal Steel down by 2.62%, HCL Tech down by 1.94%, Sun Pharma down by 1.54%, Gail down by 1.47% and Hindalco down by 1.22% were the top losers.

Asian markets were trading mostly in the green; Shanghai Composite increased 14.23 points or 0.42% to 3,363.55, Taiwan Weighted rose 17.52 points or 0.18% to 9,613.52, KOSPI Index gained 19.37 points or 0.98% to 1,989.96, Hang Seng added 68.94 points or 0.29% to 23,866.90 and Nikkei 225 was up by 282.55 points or 1.49% to 19,273.66. On the flip side, Jakarta Composite decreased 10.69 points or 0.2% to 5,429.14, Straits Times shed 9.74 points or 0.29% to 3,363.86 and FTSE Bursa Malaysia KLCI was down by 0.08 points or 0% to 1,786.79.