Markets trade flat in afternoon trade as GDP, factory growth falls

Markets continued to consolidate in the afternoon trade after Indian factory growth cooled in May as new orders expanded at a more modest pace. The Nikkei Manufacturing Purchasing Managers' Index (PMI), fell to 51.6 in May from April's 52.5, marking its fifth month above the 50 level that separates growth from contraction.
 
At 1:26 pm, the S&P BSE Sensex was trading at 31,106, down 39 points, while the broader Nifty50 was ruling at 9,605, down 16 points.
 
In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices outperformed to gain 0.4% and 0.8%, respectively.

 

Weaker-than-expected economic growth showing India was no longer the world's fastest-growing major economy also contributed to the losses. As per data released yesterday, India’s gross domestic product (GDP) growth fell to 6.1% in the March-quarter primarily as demonetisation adversely affected economic activity. I n FY17, economic growth was at a three-year low of 7.1%. The previous year, it was 8%.
 
But Finance Minister Arun Jaitley downplayed the impact on economic growth of the government's decision last November to scrap most of the cash in circulation, saying the annual rate of growth was "very reasonable".
 
"I do believe that in the current global situation, a 7-8% growth, which at the moment is the Indian normal, is very reasonable," Jaitley said. Read  full report here

 
Meanwhile, the central bank is expected to leave rates unchanged at 6.25% in its June meeting, the Monetary Policy Committee will adopt a less hawkish tone in its statement, according to a Reuters poll of 60 economists.
 
The market breadth was narrow as 1,320 shares advanced against a decline of 1,102 shares, while 156 shares were unchanged.
 
Adani Ports, Hindustan Unilever, Sun Pharma and Wipro gained the most, while Tata Steel, ICICI Bank, GAIL and ONGC lost the most.
 
Maruti Suzuki lost over 1% even as sales for the country's largest car maker grew 11.3% (y-o-y). The company sold 1.37 lakh units in May as compared to 1.23 lakh units in the corresponding month of last year.

 
Bharat Gears shares rallied nearly 5% in morning trade on board approval for term loan from KKR India Financial Services.
 
Escorts surged nearly 2% to its record high of Rs 706 in intra-day after the company announced that its agri-machinery segment in May sold 6,886 tractors, up 29% over 5,331 units sold in year-ago month.
 
Globally, European markets opened mixed on Thursday as investors eyed oil prices and continued to monitor politics in the region with UK elections just a week away.
 
MSCI's broadest index of Asia-Pacific shares outside Japan was flat after four sessions of losses as investors took profits after stocks hit a two-year high last week and as economic and geopolitical concerns continued to weigh on sentiment.

 
Chinese shares fell as much as 0.5% after a private survey showed the country's manufacturing activity contracted in May for the first time in 11 months.