Markets trade flat with positive bias in range-bound session of trade

In the extremely range-bound session of trade, local equity markets altering between positive and negative territory, were now trading flat with bit of positive bias in absence of any positive triggers which could lift the markets higher. Further, negative start of European markets could also pressurize the sentiment going further in the session. Nevertheless, sentiment also got some boost from 11 month high May Service PMI data. On the macro-front, 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. Both, Sensex and Nifty, gyrating in tight range, were holding above the crucial 24,850 and 7,400 levels respectively. Meanwhile, broader indices showing strong momentum were trading with gains of around 1.5%.

On the global front, European shares opened lower on Wednesday as traders remained on sidelines before the European Central Bank's (ECB) policy announcement later this week, with markets eyeing any potential stimulus measures that ECB President Mario Draghi could implement at Thursday's Governing Council meeting. Meanwhile, Asian shares were set for negative close.

Closer home, stocks from Consumer Durables, Capital Goods and Realty counters were supporting the slender up-move of the bourses. On the flip side, stocks from Information Technology, Fast Moving Consumer Goods and Oil & Gas counters were the top losers on the index. Meanwhile, Metal shares extended recent rise triggered by strong Chinese data with Tata Steel hitting a 52-week high. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1891:877; while 102 shares remained unchanged.

The BSE Sensex is currently trading at 24863.25, up by 4.66 points or 0.02% after trading in a range of 24,925.90 and 24778.79. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading up; the BSE Mid cap index was up by 1.51%, while Small cap index up by 1.45%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.42%, Capital Goods up by 0.88%, Realty up by 0.84%, Banking up by 0.77%, Power up by 0.76% and infrastructure up by 0.68%. While, IT down by 1.50%, Teck down by 1.14%, FMCG down by 0.15%, and Oil and Gas down by 0.03% were the losing indices on BSE.   

The top gainers on the Sensex were Herp Motocorp up by 3.39%, Hindalco Inds up by 3.29%, Bajaj Auto up by 2.17%, Tata Steel up by 2.14%, and HUL up by 2.14%. On the flip side, TCS down by 1.93%, Infosys down by 1.27%, Coal India down by 1.18%, Wipro down by 1.13% and Sun Pharma down by 1.02% 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 7,418.20, up by 2.35 points or 0.03% after trading in a range of 7,433.30 and 7,393.60. There were 28 stocks advancing against 22 declining on the index.

The top gainers of the Nifty were Hero MotoCorp up by 3.02%, Hindalco Inds up by 2.93%, NMDC up by 2.65%, PNB up by 2.50% and Bajaj Auto up by 2.43%. On the flip side, HCL Tech down by 2.84%, TCS down by 1.98%, Sun Pharma down by 1.44%, Infosys down by 1.37% and Coal India down by 1.25% were the major losers on the index.

Asian equity indices were trading in red; Hang Seng down by 0.69%, Taiwan Weighted down by 0.04%, Shanghai Composite down by 0.78%, Jakarta Stock Index down by 0.29% and Straits Times down by 0.58%. While, Nikkei 225 up by 0.22% was the top gainer on the index.

European shares got off to a negative start; with United Kingdom’s FTSE 100 declining by 0.41%, France’s CAC 40 sliding by 0.27% and Germany’s DAX shedding 0.31%.