Benchmarks continue weak trade; Nifty below 8250 mark

Indian equity markets continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters taking cues from global counterparts. The sentiments were on pessimistic note on all-round selling in Asian markets and overnight steep fall in US bourses as oil prices continued its sustained fall. Jitters over political uncertainty in Greece also drove investors out of risk assets globally to safe-haven bonds. Traders were seen selling in Oil & Gas, Realty and Metal sector stocks. In scrip specific development, Jubilant Life Sciences was trading firm on receiving USFDA approval for two drugs - Mycophenolate Mofetil and Rizatriptan. SML Isuzu was trading in green on reporting strong sales data in December.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,250 and 27,300 levels respectively. The market breadth on BSE was negative in the ratio of 765:1928 while 86 scrips remained unchanged.

The BSE Sensex is currently trading at 27280.75, down by 561.57 points or 2.02% after trading in a range of 27207.64 and 27698.93. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.34%, while Small cap index down by 1.53%.

The losing sectoral indices on the BSE were Oil & Gas down by 2.58%, Realty down by 2.44%, Metal down by 2.12%, IT down by 2.06%, Power down by 1.86%.

The top gainers on the Sensex were Hindustan Unilever up by 2.39% and Coal India up by 0.16%. On the flip side, ONGC down by 3.74%, Tata Motors down by 3.45%, HDFC down by 3.37%, Tata Steel down by 3.35% and Tata Power down by 3.31% 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 8213.55, down by 164.85 points or 1.97% after trading in a range of 8192.85 and 8327.85. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.30%, BPCL up by 0.21%, Asian Paints up by 0.17%, Coal India up by 0.04%. On the flip side, Jindal Steel & Power down by 3.84%, ONGC down by 3.67%, HDFC down by 3.54%, NMDC down by 3.45% and Tata Motors down by 3.43% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 525.52 points or 3.02% to 16,883.19, Hang Seng decreased 235.91 points or 0.99% to 23,485.41, Taiwan Weighted decreased 225.77 points or 2.43% to 9,048.34, Straits Times decreased 46.64 points or 1.4% to 3,281.64, Jakarta Composite decreased 40.57 points or 0.78% to 5,179.42, KOSPI Index decreased 33.3 points or 1.74% to 1,882.45 and FTSE Bursa Malaysia KLCI decreased 17.76 points or 1.02% to 1,718.86.

On the other hand, Shanghai Composite increased 0.93 points or 0.03% to 3,351.45.

The European markets were trading mostly in red; UK’s FTSE 100 decreased 2.62 points or 0.04% to 6,414.54 and France’s CAC decreased 1.61 points or 0.04% to 4,109.75 while, Germany’s DAX increased 11.57 points or 0.12% to 9,484.73.