Market opened with gap dow because of global weakness.Later on announcement of August IIP numbers draged the market more to end up with considerable losses.Nifty ended at 6086.30, down 49.55 points whereas Sensex ended at 20190.59 with a loss of 149.30 points.Nifty Oct month future closed at 6113.10 with a premium of 26.8 points.
The IIP for the month of August came in at 5.6% as against 10.6% in same period of previous year. Manufacturing sector growth declined at 5.9% versus 10.6%, mining sector growth at 7% as against 11% and electricity sector growth at 1% versus 10.6% (YoY).
The worst part - growth in capital goods sector came in negative 2.6% versus positive 9.2% and even consumer non-durables at (-1.2% versus 6.1% on year-on-year basis.
The infrastructure numbers which represents around 27% of the IIP numbers is released in advance. It has achieved a poor growth of only 3.7% in August.
April-August industrial growth is at 10.6% compared to 5.9% (YoY). During the month, manufacturing sector has achieved a growth of 5.9% (YoY), mining sector at 7% while consumer goods grew at 6.9%.
However, key sector capital goods growth has fallen as low as 2.6% (YoY) and consumer non-durable growth has slipped, a recording low of 1.2% (YoY).
Consumer durable goods has seen a strong growth of 26.5% (YoY) while basic goods has achieved a growth of only 3.7% (YoY).
Among BSE Sectoral indices,Healthcare index rose the most by 0.31% whereas Realty slided the most by 1.82%.
In Nifty50 stocks, M&M gained the most by 1.33% to end at 716.90 while Kotakbank declined the most by 3.16% to end at 503.50
New listed Tecpro was the turnover topper by the traded value whereas IFCI was the most traded stock on NSE today by the number of shares traded.
Advance / Decline Ratio was negative today as 899 stocks declined and 460 stocks gained today on NSE.
Quick snapshot at August IIP number Aug Industrial output :
• Aug industrial growth 5.6% vs 10.6% year ago
Disaapointments
· Aug manufacturing sector growth 5.9% vs 10.6% year ago.
· Aug electricity sector growth 1.0% vs 10.6% year ago.
· Aug basic goods growth 3.7% vs 7.7% year ago.
· Aug capital goods growth (-)2.6% vs 9.2% year ago.
· Aug consumer non-durables growth (-)1.2% vs 6.1% yr ago.
Positives
• Aug consumer goods growth 6.9% vs 10.9% year ago.
• Aug consumer durable goods growth 26.5% vs 24.7% yr ago.
• Aug mining sector growth 7.0% vs 11.0% year ago.
• Aug intermediate goods growth 10.0% vs 14.4% year ago.
• July industrial growth revised to 15.2% vs 13.8% (prov.)
Key Takeaways
• Industrial growth should be seen quarterly, not monthly.
• Growth will be a modest 10%; not mediocre, not mercurial.
• RBI will look at inflation; may hike once more.
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