Post Session: Quick review

Bulls ruling the roost yet again, contributed to the series of record breaking sessions for Indian equity markets, taking both Sensex and Nifty above psychologically crucial 27,100 and 8,100 levels respectively for the first time by the close of trade on Wednesday. Mood remained upbeat right from the start after reports suggested of FII’s remaining net buyers of local equities in previous trading session. Though, bourses dipped several times below the crucial 27,100 (Sensex) and 8,100 (Nifty) levels, but always staged recovery to get above them, which proved to be nothing short of strong bastions.

Initially, not so positive macro-economic data released earlier in the day hurt sentiments, but overall optimism over FIIs continuing to pour their money into local equity markets amidst positive global set-up, mainly underpinned investors to go long in equities. On the macro-front, Indian services activity expanded at its weakest rate in three months in August as firms' order books filled up at a slower pace, which led to HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fall to 50.6 in August from 52.2 in July. Meanwhile, provisional data from the stock exchanges showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 672.81 crore on Tuesday.

On the global front, Asian stocks concluded mostly higher as faster growth in China’s service industries and good U.S. manufacturing data boosted optimism about the world’s biggest economies. An official China non-manufacturing purchasing managers’ index for August rose to 54.4 today, from a six-month low of 54.2 in July. Meanwhile, European shares rose early on Wednesday, boosted by news that Ukraine's President has reached an agreement with Russia over a ceasefire in eastern Ukraine's Donbass region.

Closer home, sectoral data on BSE indicated of across the board buying activity, however stocks from Fast Moving Consumer Goods (FMCG), Banking and Power counters turned out be spoil-sports. On the flip side, much of demand was witnessed by stocks belonging from Information Technology, followed by Realty and Metal counters. Technology stocks witnessed much of traction  on the back of firm U.S. manufacturing activity data, while shares of state-owned oil marketing companies too gained after Brent crude prices hit 16-month lows as demand continued to remain weak on account of sluggish economic growth in China, the world's second largest economy and the euro zone. The U.S. manufacturing activity hit a nearly 3-1/2-year high last month and construction spending rebounded strongly in the month of July. Additionally, Telecom stocks too rang loud, led by gains of Bharti Airtel shares after the company signed an agreement to acquire over 2.7 million subscribers of yuMobile. The market breadth on the BSE remained in the favour of decliners; advancing and declining stocks were in a ratio of 1494:1532, while 109 scrips remained unchanged. (Provisional)

The BSE Sensex ended higher by 120.55 points or 0.45% at 27139.94 after trading in a range of 27067.02 and 27225.85. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices too ended in green; the BSE Mid cap index was up by 0.85%, while Small cap index up by 0.39%.

The gaining sectoral indices on the BSE were IT up by 2.50%, TECK up by 2.21%, Realty up by 2.15%, Metal up by 1.16% and Capital Goods up by 0.80% while, FMCG down by 0.59%, Bankex down by 0.12% and Power down by 0.06% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were Coal India up by 3.81%, Infosys up by 3.42%, Bharti Airtel up by 2.92%, Wipro up by 2.89% and TCS up by 2.09%. On the flip side, GAIL India down by 2.21%, ITC down by 1.76%, ONGC down by 1.62%, Cipla down by 1.33% and Bajaj Auto down by 1.25% were the top losers. (Provisional)

Meanwhile, the activity in Indian services sector, which accounts for around 60% of Indian GDP, although rose for fourth consecutive month, but expanded at its weakest rate in three months in August as firms' order books filled up at a slower pace. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell to 50.6 in August from 52.2 in July. A reading above 50 denotes growth while anything below implies contraction.

The HSBC Survey indicated that new business in the service sector rose for a fourth successive month in August, however the pace of expansion slowed from July. The new business sub-index fell to 51.9 from 52.6, a three-month low. However, service firms were not the only ones reporting lower order volumes. Factory surveys on Monday too showed new orders slowed for companies across Asia and Europe as tensions between Russia and Ukraine escalated and a patchy recovery in China.

Further, sector data indicated that growth of activity was broad-based, as only Hotels & Restaurants companies reported a reduction. However, the fastest increase was witnessed in Post & Telecommunications firms. Meanwhile, backlogs of work held by Indian services companies continued to grow in August, extending the current sequence of accumulation to six months. However, the rate of increase was modest overall. On the inflation front, slower charge inflation was recorded throughout the private sector, as output prices increased at the weakest pace since May 2013. Also interestingly, firms’ optimism about future activity, considered a good gauge for growth, was at a near-year low and suggesting inflation might cool both input prices and those paid by customers rose at a slower pace.

Lastly, according to survey, services activity was once again turning down following a swift post-election uptick, suggesting that an improvement in reforms momentum was required to lift sentiment in the sector. India's services activity, after shrinking for 10 months, expanded for the first time in May at the time Prime Minister Narendra Modi's Bharatiya Janata Party scored a landslide election victory that drove a wave of optimism. However, NDA government is yet to launch sweeping reforms aimed at pushing the economy back to the double-digit growth rates of late 2009-early 2010.

India VIX, a gauge for markets short term expectation of volatility dropped 0.85% at 13.33 from its previous close of 13.44 on Tuesday. (Provisional)

The CNX Nifty edged higher by 30.90 points or 0.38% at 8113.95 after trading in a range of 8092.25 and 8141.90. There were 23 stocks advancing against 27 stocks declining on the index.  (Provisional)

The top gainers on Nifty were Coal India up by 3.96%, Infosys up by 3.22%, Bharti Airtel up by 3.17%, Wipro up by 2.75% and TCS up by 2.56%. On the flip side, GAIL India down by 2.25%, ONGC down by 1.72%, IDFC down by 1.57%, BHEL down by 1.50% and Bajaj Auto down by 1.47% were the top losers. (Provisional)

European Markets were trading in the green; Germany’s DAX was up by 1.16%, France’s CAC was up by 1.10% and UK’s FTSE 100 was up by 0.72%.

Asian markets ended mostly in green on Wednesday, as reports showing faster growth in China’s service industries and US manufacturing boosted optimism in the world’s biggest economies. An official China non-manufacturing purchasing managers’ index for August rose to 54.4, from a six-month low of 54.2 in July. A similar gauge by HSBC Holdings Plc and Markit Economics posted its highest reading since March 2013. The rebound in services bolstered optimism China’s government is succeeding in shifting its economy away from exports and investment toward domestic consumption. Indonesia government raised Rp 15 trillion ($1.3 billion) from the sale of treasury bonds and bills, reflecting the growing confidence of foreign investors in the nation’s economy. Confidence in Indonesia’s economy has improved after President-elect Joko Widodo secured his victory in the July 9 presidential election. South Korean CPI rose to 0.2%, from 0.1% in the preceding month.