Post Session: Quick Review

Local equity markets, despite snapping two consecutive sessions of gains and nursing loss of over two tenths of a percent, settled above the psychological 24,800 (Sensex) and 7,400 (Nifty) levels respectively on Wednesday. In the extremely range-bound session of trade, barometer gauges kept altering between positive territory and negative territory and settled in the favour of the latter. Bouts of selling pressure that was witnessed in the dying hours of trade mainly dragged the markets below the neutral line in absence of positive triggers that could lift the markets. Nevertheless, the session clearly belonged to broader indices, which outperforming larger peers for yet another session, went home with gains of over 1.50%.

However, downtrend of bourses to some extent in the early deals was curbed on account of good macro-economic report, which suggested that activity in Indian services sector representing around 60% of Indian GDP, increased in the month of May on the back of rise in new orders. The HSBC services Purchasing Managers’ Index (PMI), based on the survey of around 350 private service sector companies rose to 50.2 in May from 48.5 in the previous month, above 50 mark that separates growth from contraction. But, sluggish global set-up weighed on the sentiment.

On the global front, Asian markets mostly fell on Wednesday after two days of healthy gains, while investors also took their lead from Wall Street's retreat from record highs. Meanwhile, European shares struggled for direction on Wednesday after the final reading of the euro-zone services PMI confirmed growth in the sector, but fell short of expectations, while caution ahead of ECB meeting on Thursday also kept market-participants on tenterhooks.

Closer home, despite the dismal session of trade, much of the sectoral indices on BSE ended in green, however losers were stocks from Information Technology, Technology and Oil & Gas counters. On the flip side, stocks from Realty, Capital Goods and Metal counters were the prominent gainers of the session. Realty stocks gathered steam on reports suggesting of government mulling tax breaks for launching real estate investment trusts (REITs) this budget. Meanwhile, shares in insurance companies surged on hopes that the new government may raise foreign direct investment limit in the sector to 49 percent from 26 percent. All, Max India, Max India, Reliance Capital, Exide Industries and Bajaj Finserv rallied in the range of 5-13% in intra-day trade. Additionally, most tyre stocks were on buyers’ radar as global rubber prices hit five-year lows. Stocks like Ceat India, Dunlop India, JK Tyre and Industries rallied 3-5 percent intraday on Wednesday. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 2123: 922, while 100 scrips remained unchanged. (Provisional)

The BSE Sensex lost 52.76 points or 0.21% to settle at 24,805.83. The index touched a high and a low of 24,925.90 and 24,773.93 respectively. Among the 30-share Sensex, 12 stocks gained, while 18 stocks declined. (Provisional)

The broader indices outperformed benchmarks and ended in green; the BSE Mid cap index was up by 1.85% and Small cap index was up by 1.96%. (Provisional)

On the BSE Sectoral front, Realty up by 1.55%, Capital Goods up by 1.25%, Metal up by 1.17%, Consumer Durables up by 0.81% and PSU up by 0.72% were the gainers while, IT down by 1.27%, Oil and Gas down by 1.26%, TECk down by 1.01% and  FMCG down by 0.23%, were the few losers in the space. (Provisional)

The top gainers on the Sensex were Hero MotoCorp up 3.35%, Hindalco up by 2.55%, Tata Steel up by 2.54%, HUL up by 1.88% and Axis Bank up by 1.70%. On the flip side, the key losers were ONGC down by 1.87%, Bharti Airtel down by 1.85%, TCS down by 1.61%, RIL down by 1.44% and HDFC down by 1.19%. (Provisional)

Meanwhile, showing some signs of recovery and stabilization, the activity in Indian services sector, which represent around 60% of Indian GDP, increased in the month of May on the back of rise in new orders. Witnessing first expansion in output in 11 months, The HSBC services Purchasing Managers’ Index (PMI), based on the survey of around 350 private service sector companies rose to 50.2 in May from 48.5 in the previous month, above 50 mark that separates growth from contraction. However, the latest increase in activity was only marginal and weak in the context of historical data. The overall business activities too expanded as the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, rose from 49.5 in April to 50.7 in the reported month.

The services providers highlighted general improvement in client demand. Among six monitored sub-sectors, Post & Telecommunication and Renting & Business Activities registered higher output in the month under review. Input costs faced by service providers in India continued to rise in May and services providers attributed higher raw material and fuel bills as the main drivers of increasing input prices. Accordingly, in order to protect margins amid increased cost burdens, services firms increased output prices for a forty-third consecutive month in May. Through the rate of charge inflation moderated to the slowest since last July.

The HSBC survey further highlighted that work-in-hand at service providers rose for the third month running in May due to the cash flow difficulties. Meanwhile, Indian services companies maintained their positive outlook for output growth over the next 12 months on the back of supportive factors such as end of the elections, launch of new services, planned increases in marketing budgets, the launch of new services and forecasts of stronger demand. The service sector activity is likely to surge in coming future supported by the strong election results.

India VIX, a gauge for markets short term expectation declined 1.45% at 15.56 from its previous close of 15.79 on Tuesday. (Provisional)

The CNX Nifty declined 13.60 points or 0.18% to settle at 7,402.25. The index touched high and low of 7,433.30 and 7,391.35 respectively. Out of 50 stocks in Nifty, 22 stocks ended in the green and 28 in red. (Provisional)

The major gainers of the Nifty were NMDC up 5.03%, IDFC up by 3.97%, Hindalco up by 2.74%, PNB up by 2.68% and Hero MotoCorp up by 2.65%. On the flip side, the key losers were HCL Tech down by 2.56%, TCS down by 1.19%, ONGC down by 1.86%, Bharti Airtel down by 1.80% and Kotak Mahindra Bank down by 1.67%. (Provisional)

Most of European markets were trading in red; UK’s FTSE 100 down by 0.33%, Germany’s DAX down by 0.40% and France’s CAC 40 was down by 0.62%.

The Asian markets concluded Wednesday’s trade mostly in red, retreating from a seven-month high, as investors await a report on US jobs and a decision from the European Central Bank on monetary policy. South Korea market was closed today on account of ‘Regional Election Day’ holiday. China’s service sector performed at its best in six months in May as the economy stabilized. According to the National Bureau of Statistics and the China Federation of Logistics and Purchasing, the official non-manufacturing Purchasing Managers’ Index, a gauge of service vitality weighted over state-owned enterprises, rose to 55.5 last month. Indonesia’s central bank deputy governor stated that the country’s current account deficit will be around 2.8 to 2.9 percent of GDP this year. The deficit was 3.3 percent last year. Singaporean PMI fell to 50.8, from 51.1 in the preceding month