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Wednesday, 13 August 2014

Markets open flat; BHEL drops 4%

opened flat with negative bias as investors booked profits on concerns over weak industrial growth and rising consumer price inflation.

At 9:15AM, the 30-share was down 9 points at 25,871 and the 50-share was down 5 points at 7,722.

Among the Sensex stocks, was down 4% on weak June quarter earnings. Reliance Ind was up 0.6%, Bharti Airtel gained 1%, Sun Pharma rose 1.2% and  ITC was up 0.6%

Showing signs of sluggishness in the economy, growth rate of industrial production slowed to 3.4% in June, as against 5% in May, mainly due to lower output of consumer goods.

However, the factory output number has remained in the positive territory for the third month in a row mainly due to a better show by manufacturing, mining and power sectors and higher output of capital goods.

IIP for May was revised to 5% from the provisional estimates of 4.7% released last month, according to data released by the Central Statistics Office (CSO).

Pushed by food items, the Consumer Price Index (CPI)-based inflation rose to 7.96 per cent in July from 7.46 per cent in June, which was an all-time low since the new series was launched in January 2011.

Asian shares struggled on Wednesday after Wall Street snapped a two-day rally with the crisis in Ukraine sapping investor confidence as it threatens a fragile economic recovery in Europe.

MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.04% while Japan's Nikkei share average gave up 0.1%.

In Asia, the focus is on a series of Chinese economic data due, including industrial production and retail sales for July.

US stocks ended lower, snapping a two-day rally as energy shares tumbled on sliding oil prices. The pullback occurred on light volume typical of mid-August.

Investors kept an eye on Russia, which sent a convoy of 280 trucks carrying humanitarian aid to eastern Ukraine on Tuesday. Western officials had been wary of the gesture, fearing Russia would use a humanitarian mission as a cover for invading Ukraine.

The Dow Jones industrial average fell 0.06%, to close at 16,560. The S&P 500 ended down 0.16%, at 1,934. The Nasdaq Composite lost 0.27%, to finish at 4,389.

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