Markets trade range-bound with a negative bias in afternoon session

Indian bourses pared some early losses, but continue to trade in red in afternoon session pressurised by selling witnessed in defensive sector stocks such as IT, teck and FMCG amid weak Asian cues. Sentiments got a hit after global consulting firm A T Kearney survey has ranked India at 7th place in FDI confidence index, lowest rank since 2001. However, market losses remained capped amid gains in consumer durables, metal and capital goods stocks. Investors’ sentiments also got some support as the HSBC services Purchasing Managers’ Index (PMI) rose to 50.2 in May from 48.5 in the previous month, above 50 mark that separates growth from contraction. The broader indices were outperforming the benchmarks with quiet a margin and most of the sectoral indices too continue to retain their gains. Metal stocks were on the buyer's radar for the second consecutive day as China's HSBC Manufacturing Index rose to a four-month high. Investors were also seen piling up position in fertilizer stocks.

Biocon has surged around 3.1% at Rs 456 on the BSE after its subsidiary Syngene International announced a five-year extension of its drug discovery and development collaboration with Bristol-Myers Squibb. National Fertilizers Limited (NFL) has zoom around 9.4% to Rs 44.6 on the BSE after posting net loss of Rs 9.8 crore in the quarter ended March 2014 as against Rs 107.04 crore in the year-ago period.

On global front, Asian equity indices were trading in red with Hang Seng down by 0.63% and Taiwan Weighted down by 0.04% as investors await a report on US jobs and a decision from the European Central Bank on monetary policy. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,400 and 24,800 levels respectively. The market breadth on BSE was positive, out of 2,700 stocks traded, 1,779 stocks advanced, while 827 stocks declined on the BSE.

The BSE Sensex is currently trading at 24,813.62 down by 44.97 points or 0.18% after trading in a range of 24,925.90 and 24,778.79. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading up; the BSE Mid cap index was up by 1.15%, while Small cap index up by 1.34%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.20%, Metal up by 0.90%, Capital Goods up by 0.64%, Auto up by 0.60%, Realty up by 0.54% and infrastructure index up by 0.40%. While, IT down by 1.55%, Teck down by 1.19%, FMCG down by 0.55%, and Oil and Gas down by 0.27% were the losing indices on BSE.   

The top gainers on the Sensex were Hindalco Inds up by 3.54%, Tata Steel up by 2.33%, Bajaj Auto up by 2.03%, Herp Motocorp up by 1.45% and Maruti Suzuki up by 1.11%. On the flip side, TCS down by 1.99%, Wipro down by 1.46%, Infosys down by 1.37%, M&M down by 1.00% and ITC down by 1.00% were the top losers.

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 cashflow 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.

The CNX Nifty is currently trading at 7,406.40 down by 9.45 points or 0.13% after trading in a range of 7,433.30 and 7,393.60. There were 30 stocks advancing against 20 declining on the index.

The top gainers of the Nifty were Hindalco Inds up by 3.45%, NMDC up by 2.88%, Jindal Steel up by 2.64%, PNB up by 2.48% and Tata Steel up by 2.19%. On the flip side, HCL Tech down by 2.84%, TCS down by 2.10%, Infosys down by 1.57%, Wipro down by 1.37% and ITC down by 1.00% were the major losers on the index.

Asian equity indices were trading in red; Hang Seng down by 0.63% to 23,144.44, Taiwan Weighted down by 0.04% to 9,119.96, Shanghai Composite down by 0.89% to 2,020.22, Jakarta Stock Index down by 0.33% to 4,925.98 and Straits Times down by 0.56% to 3,278.35. While, Nikkei 225 up by 0.14% to 15,055.14