Choppiness continues on Dalal Street in noon deals

Indian equity benchmarks continue to trade choppy in noon deals owing to persistent selling by the FIIs amid weakness in global peers. Sentiments also remained dampened after growth in India’s services firms fell to a four-month low of 53.7 in April from 54.3 in March on the back of new business growing slower than the previous months. Disappointing manufacturing surveys from China and the UK, combined with downgrades to growth and inflation forecasts from the European Commission too weighed down sentiments.

Back home, depreciation in Indian rupee too soured investor mood. The rupee weakened 11 paise to 66.53 against the US dollar in noon trade at the Interbank Foreign Exchange market on increased demand for the American currency from importers and banks. Selling in metal and mining stocks too dampened sentiments as copper prices declined in global commodities markets. Telecom stocks too edged lower despite a Parliamentary panel saying that government targets revenue of Rs 64,580.92 crore in the current financial year from spectrum auction proceeds. On the flip side, stocks related to aviation counter edged higher despite report that after ATF price hike, the government is set to hold talks with domestic airlines to cap airfares on short routes during natural calamities or unpredictable situations.

The BSE Sensex is currently trading at 25170.14, down by 59.56 points or 0.24% after trading in a range of 25096.19 and 25241.24. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.45%, while Small cap index down by 0.30%.

The top losing sectoral indices on the BSE were Metal down by 2.58%, Industrials down by 1.78%, Telecom down by 1.42%, Basic Materials down by 1.31% and Auto down by 1.29%, while there were no gainers on the index.

The top gainers on the Sensex were HDFC up by 3.05%, GAIL India up by 1.34%, HDFC Bank up by 0.99%, NTPC up by 0.99% and Hero MotoCorp up by 0.89%. On the flip side, Adani Ports &Special down by 9.64%, Tata Motors down by 4.95%, Tata Steel down by 4.61%, ICICI Bank down by 1.51% and Axis Bank down by 1.50% were the top losers.

Meanwhile, Indian Services PMI turned lower in the month of April after surging to its highest level since June 2014 in the previous month. The seasonally adjusted Nikkei Services Business Activity Index came in at 53.7 in April from 54.3 in March. Services firms’ sentiment also weakened slightly in April, with the degree of optimism being modest by historical standards.

PMI data for April showed that economic conditions across India continued to improve, softer increases in output were noted among goods producers and service providers alike, with services witnessing a slower expansion in new business inflows, while order books at manufacturers broadly stagnated. Services Business Activity Index pointed to a solid, although softer, expansion in activity. The latest increase in output was supported by growth in the Financial Intermediation, Post & Telecommunication and Transport & Storage sub-sectors.

New business at services firms rose for the tenth straight month in April. Despite easing since March, the rate of expansion was solid overall. Incoming new work in the private sector as a whole increased at a moderate and weaker rate, weighed on by stagnant order books among manufacturers. April data highlighted a general lack of pressure on the capacity of Indian service providers, as unfinished business declined. The latest fall was the third in as many months, but the weakest in this sequence and fractional overall.

Meanwhile, the seasonally adjusted Nikkei India Composite PMI Output Index, which maps both manufacturing and services sectors, dropped from 54.3 in March to 52.8 in April, pointing to a softer expansion in private sector activity across the country.

Services employment was unchanged in April, companies kept workforce numbers unchanged and stagnent employment trends have now been registered through the past nine months. Input costs faced by Indian services companies increased in April. The rate of cost inflation reached a 13-month high. It was also noted that part of additional cost burdens were passed on to clients, as both manufacturers and service providers raised their selling prices again in April.

The CNX Nifty is currently trading at 7722.85, down by 24.15 points or 0.31% after trading in a range of 7703.85 and 7748.95. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.82%, NTPC up by 1.46%, HCL Tech up by 1.24%, GAIL India up by 1.07% and HDFC Bank up by 0.95%. On the flip side, Adani Ports &Special down by 9.62%, Tata Motors down by 5.04%, Tata Steel down by 4.80%, Hindalco down by 4.54% and Tata Motors - DVR down by 4.41% were the top losers.

Asian markets were trading in red; Nikkei 225 declined 518.67 points or 3.11% to 16,147.38, Hang Seng decreased 182.96 points or 0.88% to 20,493.98, Taiwan Weighted dropped 108.65 points or 1.31% to 8,185.47, Jakarta Composite shed 36.4 points or 0.76% to 4,775.86, KOSPI Index fell 9.7 points or 0.49% to 1,976.71 and Shanghai Composite was down by 1.87 points or 0.06% to 2,990.77. On the flip side, FTSE Bursa Malaysia KLCI was up by 2.31 points or 0.14% to 1,653.75.