Markets trim losses after August WPI at 5-year low

Markets trimmed losses after WPI in August fell to a five-year low of 3.74%

Benchmark share indices trimmed losses after a data release by the government showed that the whole-sale price inflation dropped to a five-year low.

At 12:10PM, the 30-share Sensex was down 187 points at 26,873 and the 50-share Nifty was down 52 points at 8,053.

WPI inflation fell to a five-year low of 3.74% in August compared to 5.19% in the previous month.

Food inflation came in at 5.15% compared to 8.43% on a monthly basis, the lowest level since January 2012, while fuel and power inflation was at 4.54% compared to 7.40% in July. 

The fall in wholesale inflation -- which the RBI uses to set interest rates -- is likely to trigger calls for cuts in the repo rate, or the rate at which the Reserve Bank of India lends to banks. 

Adding to the clamour will be the low 0.5% growth in July in industrial production, and a marginal easing of retail inflation rate of 7.8% in August

Wholesale inflation for June has been revised upwards to 5.66% from 5.43% previously.

HDFC, ICICI Bank, ITC, Infosys and Reliance Industries were the top Sensex losers while HDFC Bank, Hero MotoCorp and Cipla were among the top gainers.
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(Updated at 11:40AM)

Markets continued to trade lower in late morning trades as investors turned cautious ahead of the whole-sale price inflation data for August due later today.

At 11:40AM, the Sensex was down 196 points at 26,865 mark and the Nifty lost 56 points at 8,049 mark.

In the broader markets, BSE Mid-cap index was trading lower with negative bias and BSE SMallcap index was trading 0.3% higher.

The provisional data released by the stock exchanges after trading hours on Friday, 12 September 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 182.80 crore on that day.

Asian were trading lower after China's discouraging factory growth in August raised concerns of growth slowdown in the world's second-biggest economy. Markets in Japan were closed on account of a public holiday. Shanghai Composite rebounded from the day's lows and was trading with marginal gains, Hang Seng was down 0.6% and Straits Times gained 0.3%.

The BSE Metal index was the top loser down over 1% on concerns of a demand slowdown from China after recent data showed that August factory growth was sharply lower. All other indices were in the red except for the Healthcare Index which was up 0.6%.

Index heavyweights, HDFC, ICICI Bank, ITC, Infosys and Reliance Industries contributed the most to the Sensex decline.

L&T was down 0.8% on the back of sluggish industrial growth in July.

ONGC continued to remain weak on the back of government's partial stake sale in the exploration major.

Cipla was up over 3% in otherwise weak market on reports that Gilead Sciences plans to allow five Indian firms to sell generic versions of its new HepatitisC medicines viz sofosbuvir and ledipasvir in 90 countries.

Shares of Bajaj Electricals were up over 4% at Rs 290 after the company said it has bagged two orders worth Rs 518.46 crore.

Fortis Healthcare has surged 10% to Rs 134 after the company said decided to divest entire stake in healthcare service provider RadLink-Asia and its arm RadLink Singapore to Medi-Rad Associates for SGD 137 million (over Rs 655 crore).

Yes Bank has dipped nearly 3% at Rs 616 in early morning deals on NSE after the Reserve Bank of India (RBI) on Friday said the foreign investors will need the central bank's approval to buy additional equity in the private sector lender.

Metal stocks were down because of weak factory growth in China during August.  China is the world's largest consumer of steel, copper and aluminum. Tata Steel, Hindalco, Sesa Sterlite and Coal India were down 0.5-2% each.

Market breadth was weak with 1,489 losers and 1,157 gainers on the BSE.