Benchmarks tread water in afternoon deals; broader indices outperform

Benchmark equity indices after dilly-dallying since early deals, were treading water in the range-bound session of trade on Wednesday. Both, Sensex and Nifty, with no particular direction, were oscillating around the crucial 28,400 and 8,500 levels respectively. Nevertheless, the session was clearly in the favour of broader indices which outperforming larger counterparts, were trading higher with gains of around a percent.

A sharp slide was restricted on account of prevailing positive sentiment after RBI, in its fifth bi monthly monetary policy review underscored that it could ease monetary policy early next year. Additionally, the activity in Indian services sector, which accounts for around 60% of country’s GDP, expanded at a faster pace in November as order books filled up at a faster rate, also added to the positive sentiment.

On the global front, Asian pacific region’ gains were led by Japan's benchmark Nikkei index, which climbed to a fresh seven-year high on Wednesday as investor sentiment continued to be buoyed by the weaker yen. The Nikkei's highs come despite a move by Moody's Investment Service earlier this week to cut Japan's credit rating by one notch, underlining concerns about the nation's economy.

Closer home, most of the sectoral indices on BSE were trading into positive territory, however stocks from Infra, Power and Capital Goods counters were the top gainers on BSE. On the flip side, stocks from FMCG, Information Technology and Technology counters were the top losers of the session.

In stock-specific activity, railway stocks were trading higher after reports suggested that railway ministry has called for an investors' meet on December 5 and those likely to attend include financials such as HSBC, Morgan Stanley and JP Morgan. Besides, shares of companies engaged in insurance business are in limelight were trading higher on hopes of foreign direct investment (FDI) in the sector. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1800:868; while 95 shares remained unchanged.

The BSE Sensex is currently trading at 28442.01, down by 2.00 points or 0.01% after trading in a range of 28370.73 and 28504.65. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.56%, while Small cap index up by 1.56%.

The gaining sectoral indices on the BSE were INFRA up by 1.32%, Power up by 1.24%, Capital Goods up by 1.19%, Realty up by 1.02% and Consumer Durables up by 1.00% while, FMCG down by 0.47%, IT down by 0.18% and TECK down by 0.07% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.19%, Sesa Sterlite up by 2.75%, Axis Bank up by 1.45%, Mahindra & Mahindra up by 1.30% and GAIL India up by 1.04%. On the flip side, Dr. Reddys Lab down by 2.05%, HDFC down by 1.40%, ITC down by 1.12%, Infosys down by 0.71% and Hero MotoCorp down by 0.66% were the top losers.

Meanwhile, the activity in Indian services sector, which accounts for around 60% of country’s GDP, expanded at a faster pace in November 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 to five-month high at 52.6 in the month of November from 50 in October, above 50 mark indicating a seventh consecutive monthly expansion in service sector output.

The HSBC Survey highlighted that business activity was driven higher by faster growth of new business in November and the pace of expansion was solid overall and the quickest since July. The new business sub-index accelerated to 52.5 in November, signaling improving demand. Among the six monitored sub-sectors, Post &Telecommunications was the best performing of the broad areas monitored, while contractions in activity were registered in Financial Intermediation and Hotels & Restaurants. Indicating expansion in business activity overall, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, increased to 53.6 in November from 51 in the previous month. In spite of significant growth of activity and new business, workforce numbers in sector declined for the first time in four months. Amid rising demand and declining employment level, backlogs of work held by Indian services companies increased for the second consecutive month in November. However, the rate of increase eased from the previous month and was moderate overall.

On inflation front, the Survey indicated that input costs for services providers fell for the first time since March 2009 and the rate of decline was the second-quickest in the survey’s nine-year history. Subsequently, prices charged by Indian services firms deteriorated for the first time in more than four years in November. Despite the uptick in order flows, new business optimism index slipped to the weakest since mid-2007, suggesting that continued policy action that addresses investor concerns is needed to sustain growth momentum.

The CNX Nifty is currently trading at 8532.70, up by 8.00 points or 0.09% after trading in a range of 8508.35 and 8540.60. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 7.18%, BHEL up by 3.24%, Asian Paints up by 2.66%, Sesa Sterlite up by 2.44% and Indusind Bank up by 2.34%. On the flip side, Dr. Reddys Lab down by 2.19%, HDFC down by 1.51%, Zee Entertainment down by 1.34%, ITC down by 1.24% and Hero MotoCorp down by 0.78% were the top losers.

Asian markets were trading mostly higher; with KOSPI Index gaining by 4.08 points or 0.21% to 1,969.91; Straits Times advancing by 4.25 points or 0.13% to 3,326.57; Shanghai Composite adding 8.32 points or 0.3% to 2,771.87; Nikkei 225 rising by 57.21 points or 0.32% to 17,720.43; Taiwan Weighted rallying by 140.47 points or 1.55% to 9,175.26. On the flip side, Hang Seng declined by 173.35 points or 0.73% to 23,480.95; FTSE Bursa Malaysia KLCI slid by 18.66 points or 1.04% to 1,767.31 and  Jakarta Composite shed 13.22 points or 0.26% to 5,162.57