Benchmarks extend losses; Metal, Capital Goods drag

Indian equity markets extended losses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters. The World Bank in its latest report stated that Indian economy, which accounts for 80 percent of South Asia’s output, is set to grow by 6.4% in 2015-16 as against 5.6% in 2014-15, failed to add any optimism on the street. Traders were seen piling positions in Power, TECK and Auto while selling was witnessed in Metal, Capital Goods and Consumer Durables sector stocks. In scrip specific development, Apollo Tyres was trading firm after foreign investors have been allowed by the Reserve Bank of India (RBI) to buy up to 45 percent of the paid-up equity capital in the company. Ballarpur Industries was trading in green after International Finance Corporation (IFC) stated that it will invest $100 million about Rs 616 crore in Bilt Paper BV, a step down subsidiary of paper manufacturer Ballarpur Industries, in lieu of fresh shares.

On the global front, the Asian markets were trading on mixed note while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,900 and 26,400 levels respectively. The market breadth on BSE was negative in the ratio of 1165:1552 while 114 scrips remained unchanged.

The BSE Sensex is currently trading at 26392.35, down by 175.64 points or 0.66% after trading in a range of 26376.96 and 26570.38. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.26%, while Small cap index down by 0.09%.

The gaining sectoral indices on the BSE were Power up by 0.03%, TECK up by 0.01%, Auto up by 0.01% while, Metal down by 1.75%, Capital Goods down by 1.56%, Consumer Durables down by 0.97%, PSU down by 0.88%, Infra down by 0.67% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.04%, NTPC up by 0.94%, ICICI Bank up by 0.88%, GAIL India up by 0.79% and Hindustan Unilever up by 0.70%.

On the flip side, Hindalco down by 3.80%, HDFC down by 2.95%, Sun Pharma down by 2.59%, Mahindra & Mahindra down by 2.52% and Sesa Sterlite down by 2.51% were the top losers.

Meanwhile, the activity in Indian services sector, which accounts for around 60% of country’s GDP, expanded in September as order books filled up at a faster rate. The HSBC services Purchasing Managers’ Index (PMI), based on the survey of around 350 private service sector companies, rose from 50.6 in August to 51.6 in the month of September, above 50 mark indicating a fifth consecutive monthly expansion in service sector output. Among the six monitored sub-sectors, the business activity rose in three sub-sectors with the sharpest expansion witnessed in post and telecommunication services. Indicating expansion in business activity overall, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, increased to 51.8 in September from 51.6 in August.

Services providers attributed expansion in output to increase in new businesses amid strengthening demand. The new business sub-index climbed to 52.4 in September from 51.9, signaling robust demand.  Employment across the private sector also rose for the first time since June; however the rate of hiring was fractional overall. Amid rising demand and fractional increase in employment level, backlogs of work held by Indian services companies continued to grow in September, extending the current sequence of accumulation to six months. On inflation front, the HSBC survey indicated that inflationary pressures from inputs for services firms eased in September. Accordingly, services providers slightly increased output prices and the rate of charge inflation was below the historically inflation trend. Meanwhile, Indian services companies maintained their positive outlook for output growth over the next 12 months on the back of supportive factors such as anticipated improvements in demand and new marketing initiatives. 

Further, the survey highlighted that employment level rose and inflation fell significantly in September, however, business sentiment continue to deteriorate in services sector after a strong post-election uptick. Therefore, there is a need for more reforms to put growth on a firm track and address supply side risks to inflation.

The CNX Nifty is currently trading at 7889.00, down by 56.55 points or 0.71% after trading in a range of 7883.35 and 7943.05. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.01%, NTPC up by 1.08%, Hindustan Unilever up by 0.71%, HCL Tech up by 0.69% and ICICI Bank up by 0.60%.

On the flip side, DLF down by 4.85%, Hindalco down by 3.93%, Cairn India down by 3.36%, Ultratech Cement down by 3.09% and HDFC down by 3.01% were the top losers.

The Asian markets were trading mixed; KOSPI Index increased 4.52 points or 0.23% to 1,972.91, Shanghai Composite increased 6.16 points or 0.26% to 2,363.87, Jakarta Composite increased 45.9 points or 0.92% to 5,046.04 and Hang Seng increased 107.48 points or 0.46% to 23,422.52.

On the flip side, Nikkei 225 decreased 107.12 points or 0.67% to 15,783.83, Taiwan Weighted decreased 54.33 points or 0.6% to 9,040.81, Straits Times decreased 4.97 points or 0.15% to 3,248.27 and FTSE Bursa Malaysia KLCI decreased 4 points or 0.22% to 1,836.82.

The European markets were trading in red; Germany’s DAX decreased 77.23 points or 0.84% to 9,132.28, France’s CAC decreased 38.03 points or 0.89% to 4,248.49 and UK’s FTSE 100 decreased 40.69 points or 0.62% to 6,522.96.