Indian Indices Trade Weak, Inflation Quickens in October, and Top Stocks in Action
On Tuesday, share markets in India opened flat and traded volatile throughout the day and ended the day deep in red.
The BSE Sensex closed lower by 92 points to end below 33,000 levels at 32,942 while the broader NSE Nifty ended the day lower by 38 points to close at 10,187.
Among BSE sectoral indices, capital goods index fell the most by 1.4%, followed by PSU stocks at 0.9%. Power Grid Corp and Larsen & Toubro (L&T), were among the top losers.
Top Stocks in Action Today
Sun Pharma share price is likely to be in focus today the company reported a 59% dip in consolidated net profit for the quarter. Whereas, revenues declined 19.5% to Rs 66.5 billion compared to Rs 82.6 billion in the same period a year ago.
Bharti Airtel share price will be among the stocks to watch today after the company sold over 83 million shares in its subsidiary Bharti Infratel through secondary share sale. The sale was for a total consideration of over Rs 33.3 billion and was executed at a price of Rs 400.6 per share, representing a discount of 3.6% to the previous day’s closing price. Bharti Airtel will primarily use the proceeds from this sale to reduce its debt.
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Inflation Picks up in October
According to data released by the Central Statistics Office (CSO), retail inflation as measured by the Consumer Price Index (CPI) rose to a six-month high of 3.58 % in October 2017, up from 3.28% in September.
Similarly, wholesale inflation as measured by the Wholesale Price Index (WPI) rose to 3.59% in October, a sharp rise from of 2.6% in September 2017.
Food articles turned out to be major drivers as the data showed that prices of wholesale food articles rose by 3.2% in October, as against a 2% rise in the previous month. Retail vegetable prices to drove inflationary trends as they rose 7.5% over last year.
Rising inflation could lower hopes of a rate cut by the Reserve Bank of India (RBI) in its next policy meet due in December.
Last month, the RBI’s Monetary Policy Committee (MPC) forecasted that retail inflation will hover around 4.2-4.6% between October-March this year, higher than the previous projection of 4-4.5%.
The RBI retained its neutral policy stance, citing uncertainty on the future trajectory of inflation because of several uncertainties, flagging possible return of inflationary pressures. However, it also kept the door ajar for a future rate cut if incoming data were conducive. While the government has been eyeing a sharp cut in interest rates, RBI has maintained its cautious stance.
Global Indices Mixed over Macro Cues
Global financial markets were mixed as doubts over the US tax reform continued to weigh in. However, strong German economic growth data gave European stocks a lift after five days of falls put them at a two-month low. The uplift to sentiment came after disappointing Chinese industrial and retail figures had subdued Asia. Market participants are focused on the progress of a U.S. tax-cut plan being developed by President Donald Trump. Tax negotiators in the U.S. House of Representatives seek to overcome their differences this week and work on a plan, aiming for their self-imposed deadline of passage this month.
Khadim India made a weak debut on the bourses today.
The Kolkata based footwear company’s shares opened at a discount of over 4%, and closed at at Rs 689 a discount of over 8% to its issue price of Rs 750.
The initial public issue (IPO) of Khadim India, which ended on 6 November 10, was subscribed about 1.9 times. The price band for the offer was fixed at Rs 745-750 per share.
Khadim India would be utilising the net IPO proceeds towards payment of loans and general corporate purposes.
The company is the second largest footwear retailer in India. It operates exclusive retail stores under the ‘Khadims’ brand with major presence in East India. We had analysed and reviewed the IPO and released a recommendation note. You can check the same on the IPO page.
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