Markets continue to languish into negative territory with massive losses

Markets continued to languish into negative territory with massive losses as market-participants continued to book profits in absence of any positive trigger and also as caution ahead of earning season played on the sentiment. Additionally, dismal macro-economic data also added to the pessimistic milieu. On the macro-front, the activity in Indian services sector, which accounts for around 60% of country’s GDP, slipped to 51.1 in December, which is lower than the five year high index reading of 52.6 for November. Nevertheless, the reading still is indicative of the expansion since any number above the watershed ’50’ mark means expansion. At day’s low, while Sensex was trading below psychologically crucial 27,300, Nifty managed to held on to 8,200 mark.  Meanwhile, broader indices also succumbing to selling pressure were trading with losses of around 1.50%.

On the global front, Asian shares slumped on Tuesday as sliding oil prices and political uncertainty in Greece forced investors out of riskier assets and into the safety of government bonds, while the euro wallowed near nine-year lows.

Closer home, with selling turning out to be broad-based, stocks from Oil & Gas, Metal and Realty counters were the worst performers of the session. Meanwhile, telecom stocks were trading mixed after Union Cabinet approved the largest ever telecom spectrum auction that is targeted to fetch the exchequer at least Rs 64,840 crore from its sale in February. Notably, the reserve price is much higher than the target of Rs 43065 crore set in the Union Budget for 2014-15. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1962:641; while 69 shares remained unchanged.

The BSE Sensex is currently trading at 27279.70, down by 562.62 points or 2.02% after trading in a range of 27207.64 and 27698.93. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.58%, while Small cap index down by 1.70%.

The losing sectoral indices on the BSE were Oil & Gas down by 2.46%, Metal down by 2.42%, Realty down by 2.40%, Power down by 1.99%, PSU down by 1.98%.

The top gainers on the Sensex were Hindustan Unilever up by 0.11%. On the flip side, ONGC down by 3.91%, Tata Steel down by 3.61%, Tata Motors down by 3.45%, Tata Power down by 3.37% and HDFC down by 3.09% were the top losers.

Meanwhile, the activity in Indian services sector, which accounts for around 60% of country’s GDP, slipped to 51.1 in December, which is lower than the five year high index reading of 52.6 for November. Nevertheless, the reading still is indicative of the expansion since any number above the watershed ’50’ mark means expansion. The HSBC India Services PMI averaged 51.38 index points from 2012 until 2014. It reached an all-time high of 57.50 in January 2013 and recorded a low of 44.60 index points in September 2013.

The overall slowdown in activity growth was mirrored by a weaker expansion in service sector new business in December. Additionally, despite increase in the manufacturing PMI to the highest level in two years in December, the composite output of the private sector, comprising both manufacturing and services, grew moderately. Composite PMI was down to 52.9 points in December from 53.6 points in November. Although, a weaker expansion in new business for the service sector was witnessed, the latest increase was the eighth in as many months. Notably, across the private sector as a whole, growth of new work inflows remained solid, led by a further acceleration at manufacturers.

On the inflation front, the rate of charge inflation was fractional overall, reflecting relatively muted cost pressures. Although, the input cost faced by Indian services firms rose in December, the rate of cost Inflation was only modest overall and mild in the context of historic survey data. Overall, private sector output prices also rose at the weakest pace since October 2010.

In a positive development, staffing levels in the Indian service sector, reversing the trend recorded in the previous month, increased in December, with rise in service sector payroll numbers more than offsetting a contraction at goods producers, as employment rose across the private sector overall. Besides, average tariffs charged by services firms increased in December, following a reduction in the previous month.  The survey also pointed that all but the Financial Intermediation sub-sector saw an expansion in order books, which is key for funding a meaningful pick-up in economic growth.

Notably, though the service index growth grew at a weaker pace, there was solid growth witnessed in private sector activity, led by faster expansion of manufacturers. Additionally, inflation pressures remained at historically muted levels, with new business across private sector increasing for eight month in row. Encouragingly, business confidence strengthened in December, despite slowdowns in growth of activity and new orders. Also, the degree of positive sentiment among Indian service providers was robust overall, albeit weak in comparison with the long-run series average.

The CNX Nifty is currently trading at 8210.35, down by 168.05 points or 2.01% after trading in a range of 8192.85 and 8327.85. There were 2 stocks advancing against 48 stocks declining on the index.

The only two gainers on Nifty were Hindustan Unilever up by 0.31% and BPCL up by 0.02%. On the flip side, Jindal Steel & Power down by 4.27%, NMDC down by 3.90%, ONGC down by 3.89%, Tata Steel down by 3.62% and Tata Motors down by 3.35% were the top losers.

Asian markets were reeling under pressure; with Nikkei 225 declining by 525.52 points or 3.02% to 16,883.19; Hang Seng sliding by 296.98 points or 1.25% to 23,424.34; Taiwan Weighted plunging by 225.77 points or 2.43% to 9,048.34; Straits Times losing 50.23 points or 1.51% to 3,278.05; Jakarta Composite shedding 43.87 points or 0.84% to 5,176.13; KOSPI Index sliding 33.3 points or 1.74% to 1,882.45 and FTSE Bursa Malaysia KLCI dropping by 24.17 points or 1.39% to 1,712.45. On the flip side, Shanghai Composite up by 0.54 points or 0.02% to 3,351.06 was the lone gainer on the index.