Sensex trims gains after scaling record high

The Sensex trimmed gains soon after scaling a record high while the Nifty sank in negative zone in morning trade. At 10:22 IST, the barometer index, the S&P BSE Sensex, was up 7.98 points or 0.02% at 36,556.39. The Nifty 50 index was down 4.50 points or 0.04% at 11,018.70. Intraday volatility was high.

Domestic stocks nudged higher in early trade on positive Asian stocks.

The S&P BSE Mid-Cap index was down 0.51%. The S&P BSE Small-Cap index was down 0.81%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 626 shares rose and 1288 shares fell. A total of 80 shares were unchanged.

Overseas, most Asian stocks rose as China refrained from detailing retaliation plans against threatened US tariff increases. The US and China reportedly signaled they were open to resuming negotiations over trade after days of exchanging retaliatory threats.

China's trade surplus narrowed to 901.32 billion yuan ($135.4 billion) in the first half of the year, down 26.7% from the same period a year earlier, data showed Friday. In January-June period, China's exports rose 4.9% from a year ago in yuan terms, and imports expanded 11.5% in yuan terms.

US stocks closed solidly higher yesterday, 12 July 2018 with the Nasdaq Composite Index ending at a record on the back of a rally in internet and technology giants, which helped to overshadow ongoing uncertainty over trade relations between the US and China.

Back home, Wipro (up 1.88%), Infosys (up 1.39%), Reliance Industries (up 1.07%), Coal India (up 0.87%) and TCS (up 0.68%) edged higher from the Sensex pack.

SBI (down 1.79%), Yes Bank (down 1.43%) and Axis Bank (down 1.35%) edged lower from the Sensex pack.

On the macro front, government data released after market hours yesterday, 12 July 2018 showed that India's factory output growth slowed to a seven-month low in May while retail inflation quickened to a five-month high in June.

India's industrial production (base year 2011-12=100) grew at 3.2% in May 2018 over May 2017, while showing moderation in growth from a revised 4.8% increase in the previous month. The manufacturing sector's production growth decelerated to 2.8%, causing dip in overall industrial production growth in May 2018. On the other hand, the mining output has improved at higher pace of 5.7% and electricity generation output growth also accelerated 4.2% in May 2018.

The all-India general CPI inflation increased 5% in June 2018 (new base 2012=100), compared with 4.87% in May 2018. The corresponding provisional inflation rate for rural area was 5% and urban area 4.85% in June 2018 as against 4.88% and 4.72% in May 2018. The core CPI inflation increased to 6.35% in June 2018 compared with 6.12% in May 2018.

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