Sensex gains after January IIP beats expectations
China's economy has been cooling while its trade deficit ballooned to $1.5 billion in February.
The BSE Sensex jumped after data indicated that January industrial output (IIP) growth was higher than expected. Industrial output grew by 6.2% in January from a year earlier, compared with 1.8% in December. The jump in headline growth came on the back of higher than expected growth in consumer non-durables goods.
The Sensex, which traded with nearly 100 points gains before the data came, jumped another 50 points after headline number beat Street expectations. However, analysts said there might be some discrepancy in the data.
"The IIP numbers have been baffling for the last few months. I think it's difficult to make any sense out of it and difficult to take a forward view. The index has become volatile and it is not serving its purpose," DK Joshi, Principal Economist at Crisil told NDTV Profit today.
The markets also reacted to the sharp volatility in the IIP data and after the initial rise, the benchmark indices headed lower.
At 1145 hours, the Sensex was up just 30 points at 17,532 while the broader Nifty index traded 7 points higher at 5,341.
Banking stocks traded off the day's high. These counters had witnessed a sharp rise in early trade on the back of 75 basis points cut in the cash reserve ratio (CRR). Realty stocks, another rate sensitive sector, also traded higher. Capital goods stocks traded with nearly 1.8% gains on the BSE.
SBI (3%) continued to top the Nifty index. L&T (2.4%) and ICICI Bank (1.5%) were the other big gainers. Market bellwether Reliance Industries (1.5%) also saw buying interest today.
Most other group of stocks traded flat to negative. IT stocks underperformed the broader markets, falling over 1.5%.
Infosys (-2.2%) was the top Nifty loser. M&M (-1.6%) and TCS (-1.5%) also traded lower.
The market breadth was positive with over 60% stocks rising on the broader BSE 500 index.