Post Session: Quick Review

After snapping five consecutive sessions’ depreciating streak in the last session, local equity markets settled with gain of around quarter percent on Tuesday, which lifted Sensex and Nifty above the crucial 22,500 and 6700 levels respectively. However, unlike previous trading session, benchmarks made substantial recovery in the last hour of trade, besides gains in broader indices, which went home with gains in the range of 0.35%-0.50% amidst positive global counterparts.

Relentless buying in index heavyweights such as ICICI Bank, Reliance Industries (RIL) and ITC, mainly underpinned the gains at Dalal Street, however further uptrend was limited on account of disappointment from macro-front, whereby activity in services industry contracted for a tenth straight month in April, pushing firms to put hiring plans on hold for the first time since November. The HSBC Services Purchasing Managers' Index, compiled by Markit, rose to 48.5 in April from 47.5 in March, but held stubbornly below the 50-mark that divides growth from contraction.

On the global front, the Asian markets ended mostly higher on Tuesday, despite lingering concerns about a slowdown in China and worries about the situation in Ukraine, mainly on account of upbeat US data. Sentiment did get a fillip after the Institute for Supply Management's US services sector index rose to 55.2 in April, the fastest pace in eight months.  Additionally, European stock markets advanced on Tuesday, with solid earnings results from UBS and PostNL, and strong economic data lifting the investing mood. The composite euro-zone purchasing managers’ index for April rose to 54, unchanged from the flash reading, signaling the fastest rate of economic growth in almost three years.

Closer home, majority of the sectoral indices on BSE contributed to the positive momentum, with exceptions being stocks from Information Technology (IT), Power and Metal counters. While, IT stocks extended its southbound journey, power counter’s drag was led by Tata Power stocks, which featured in the list of worst performer among 30 stock index. On the flip side, gains of Dalal Street were led by stocks belonging to Consumer Durable, Oil & Gas and Capital Goods counters. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1362: 1380, while 137 scrips remained unchanged. (Provisional)

The BSE Sensex gained 63.30 points or 0.28% to settle at 22508.42. The index touched a high and a low of 22602.71 and 22475.65 respectively. Among the 30-share Sensex, 15 stocks gained, while 15 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.31% and 0.46% respectively. (Provisional)

On the BSE Sectoral front, Consumer Durables up by 3.22%, Oil & Gas up by 1.10%, Capital Goods up by 0.99%, Bankex up by 0.54% and FMCG up by 0.46% were the gainers while, IT down by 0.51%, Teck down by 0.46%, Power down by 0.34% and  Realty down by 0.05% were the top losers in the space. (Provisional)

The top gainers on the Sensex were RIL up by 2.19%, ICICI Bank up by 1.90%, L&T up by 1.30%, Tata Motors up by 1.09% and Tata Steel up by 0.87% while, Bharti Airtel down by 2.10%, Wipro down by 1.32%, Tata Power down by 1.27%, HDFC down by 1.26% and Axis Bank down by 1.04% were the top losers in the index (Provisional).

Meanwhile, showing some signs of recovery, the activity in Indian services sector, which make up nearly 60% of country’ economics output, moved up slightly in the month of April, amid challenging economic conditions. The HSBC services Purchasing Managers’ Index (PMI), based on the survey of around 350 private service sector companies, rose to 48.5 in April from 47.5 in the previous month. However the reading remained below 50 mark for the tenth successive month that separates growth from contraction. The survey highlighted that the factors like prevailing economic slowdown coupled with political uncertainty and a further drop in new orders had all contributed to the latest fall in business activity. Though, the rate of contraction was weak, as compared to the previous month.  

The survey further highlighted that among six monitored sub-sectors, two services categories including Financial Intermediation and Transport & Storage reported lower output. The overall business activities too improved as the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, rose from 48.9 in March to 49.5 in the reported month. Services firms recorded lower new business orders, however the rate of contraction was modest overall. Amid evidence of lower new business inflows, services firms also hired less staff which also ended the four-month sequence of job creation. Owing to delayed payments from clients, unfinished business in the Indian service sector rose for the second successive month in April. 

Further, services providers reported higher input price in April mainly on account of high prices of food fuel, packaging materials and paper, however the rate of inflation was weaker than the series long-run average. Accordingly, in order to protect margins amid increased cost burdens, services firms increased output prices with fastest pace in five month, suggesting consumer price inflation could rise further. Indian services companies also maintained their positive outlook for output growth over the next 12 months on the back of supportive factors such as planned increases in marketing budgets, the launch of new services and forecasts of stronger demand.

India VIX, a gauge for markets short term expectation lost 2.69% at 33.27 from its previous close of 34.19 on Monday. (Provisional)

The CNX Nifty gained 15.95 points or 0.24% to settle at 6,715.30. The index touched high and low of 6,743.45 and 6,701.90 respectively. Out of 50 stocks in Nifty, 26 stocks ended in the green and 24 in red.

The major gainers of the Nifty were Indusind Bank up 2.51%, ICICI Bank up by 2.11%, Reliance up by 1.93%, L&T up by 1.48% and Tata Motors up by 1.24%.  The key losers were Power Grid down by 2.81%, Ambuja Cement down by 1.85%, Bharti Airtel down by 1.81%, Tata Power down by 1.46% and Wipro down by 1.32%. (Provisional)

Most of European markets were trading in green; France’s CAC 40 was up by 0.01%, UK’s FTSE 100 was down by 0.18% and Germany’s DAX was up by 0.01%.

The Asian markets concluded Tuesday’s trade mostly in green, despite lingering concerns about a slowdown in China and on worries about the situation in Ukraine. Hong Kong and South Korea markets remained shut for the trade today on account of Buddha’s Birthday Holiday, while the Japanese market is closed for Greenery Day. New home sales in Shanghai fell to the lowest in 11 weeks as sluggish momentum continued to prevail among home buyers and real estate developers. The purchases of new residential properties, excluding government-subsidized affordable housing, dropped 35.9% week on week to 125,900 square meters. The average cost of the new houses, meanwhile, rose 6% from the previous week to 27,933 yuan ($4,505) per square meter. Taiwanese CPI fell to a seasonally adjusted annual rate of 0.16%, from 0.30% in the preceding quarter. Philippines CPI rose to a seasonally adjusted annual rate of 0.4%, from -0.1% in the preceding quarter.