Global Markets To Set The Tone For Indian Equities

The global markets went into a tailspin after Trump announced introduction of tariffs on imports of steel and aluminium in the US. In India, the most affected stocks were naturally the metal stocks. The fear of trade war triggered panic selling in the global markets. The global markets recovered sharply after the US markets gained owing to positive employment data for the US economy. 

The US markets managed to inch higher in the past couple of weeks, thus outperforming their global peers. Dow Jones Industrial Average was up by 0.10 per cent in past 15 days even as S&P 500 gained 1.43 per cent. Nasdaq was up by 2.97 per cent. Nasdaq was the worldbeating index during this period. The European indices underperformed the US markets with FTSE being the only major European index that managed to close in the green. The DAX was down by 1.10 per cent, while CAC 40 shed 0.81 per cent and Hang Seng slipped by 0.87 per cent. Asian markets were mixed with Nikkie slipping 1.93 per cent and Shanghai gaining 0.55 per cent. 

The key Indian benchmark indices, i.e Sensex and Nifty, both lost 0.66 per cent in the past couple of weeks even as the Mid-cap index was down by 2.74 per cent. Small-cap index slipped by 3.29 per cent while Bankex was down by 2.63 per cent. FMCG was down by 0.61 per cent, Power by 1.93 per cent and Realty by 1.58 per cent. Metal index was the worst performing sectoral index and was down by 6.56 per cent. Auto index was the best performing sectoral index and was up by 1.07 per cent in the past couple of weeks. IT index was another sectoral index that managed to close in the green, along with the Auto index.

The FIIs were net sellers to the tune of Rs 3,815.78 crore, while DIIs were net buyers to the tune of Rs 4,180.79 crore. The CPI (retail) inflation for the month of February 2018 came in lower at 4.44% compared to 5.07% in January 2018. The CPI inflation has tapered by nearly 100 basis points in the past two months. The inflation was lower due to the decline in food inflation which came in at 3,26 per cent for the month of February compared to 4.71 per cent in January 2018. The Index of Industrial Production (IIP) for the month of January 2018 came in at 7.5%, while the cumulative IIP for the 10-month period (Apr-Jan) came in at 4.1%. The improvement in the IIP data is a positive trigger for Q4 GDP, which is expected to be announced in last week of May. The healthy IIP data hints at healthier Q4GDP data. 

The global markets, along with the developments related to banks and NPAs, may influence market mood in India in the coming days.