Weak trade persist in late afternoon session

Indian equity benchmarks continued their weak trade in the late afternoon session on account of profit booking in frontline blue chip counters and taking cues from weak European counterparts. The sentiment remained under pressure as a survey showed that India’s services sector activity slowed in June. Traders were seen piling position in Metal and PSU stocks while selling was witnessed in Auto, Consumer Durables and TECK sector stocks. Shares of fertilizer manufacturers were trading under pressure following the government’s decision to cut retail prices of non-urea fertilizers yesterday. In scrip specific development, Jaiprakash Associates was trading firm after UltraTech Cement has agreed to pay higher price to acquire its cement assets. Modison Metals was trading in green after the company signed a Memorandum of Understanding (MoU) with Ekaterinburg Non-Ferrous Processing Plant, Russia to float a joint venture company in India. Techno Electric & Engineering Company was trading in green as the company announced that the board of directors meeting will be held on July 14, 2016, to consider issue of bonus shares. Pokarna, Compuage Infocom and Mold Tek Technologies were trading in green ahead of listing on the National Stock Exchange (NSE). The market will remain closed tomorrow i.e. July 06, 2016 on account of ‘Id-Ul-Fitr (Ramzan Id)’ holiday.

On the global front, 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 8,350 and 27,200 levels respectively. The market breadth on BSE was negative in the ratio of 1187:1442 while 134 scrips remained unchanged.

The BSE Sensex is currently trading at 27174.62, down by 104.14 points or 0.38% after trading in a range of 27144.44 and 27348.66. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.20%, while Small cap index was down by 0.15%.

The gaining sectoral indices on the BSE were Metal up by 0.17%, PSU up by 0.03% while, Auto down by 1.04%, Consumer Durables down by 0.60%, TECK down by 0.59%, Realty down by 0.53% and IT down by 0.49% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 0.74%, Tata Steel up by 0.69%, Adani Ports & Special Economic Zone up by 0.68%, HDFC up by 0.58% and SBI up by 0.47%.

On the flip side, Bharti Airtel down by 2.40%, GAIL India down by 1.92%, Tata Motors down by 1.79%, Asian Paints down by 1.58% and Bajaj Auto down by 1.54% were the top losers.

Meanwhile, the growth of services activity in India slowed to a seven-month low in June amid softer expansion in new business orders, adding to the clamour for rate cuts by the Reserve Bank. The seasonally adjusted Nikkei Services Business Activity Index, which maps the service sector activity, fell to 50.3 in June from 51 in May, one of the lowest readings in the current 12-month sequence of above-50 readings. A reading above 50 represents expansion, while one below means contraction.

The seasonally adjusted Nikkei India Composite PMI Output Index, which maps both manufacturing and services sectors rose to a three-month high of 51.1 in June from 50.9 in May, but remained below its long-run average and pointed to a slight pace of expansion.

As per the survey, the new orders received by the Indian service sector grew at the slowest pace in eleven months. In contrast, manufacturing order books increased at the quickest pace since March, outweighing the slowdown in services and therefore contributing to a quicker expansion in private sector new business.

On price front, the input prices in the Indian service sector rose for the ninth consecutive month in June. Cost burdens among manufacturers rose at the slowest pace since March. Purchase prices among manufacturers increased again, but at the weakest pace since March. Prices charged by Indian service providers continued to rise in the latest survey period. 

On the jobs front, Indian service providers signalled a slight increase in staffing levels during June. Moreover, future expectations dipped to the lowest since February, highlighting concerns regarding the sustainability of the economic upturn. Although manufacturing was higher in June, variables such as new orders, employment and production stayed below their respective long-run averages.

The CNX Nifty is currently trading at 8332.30, down by 38.40 points or 0.46% after trading in a range of 8324.45 and 8381.45. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were BHEL up by 1.41%, Aurobindo Pharma up by 1.10%, Bosch up by 0.91%, and Adani Ports & Special Economic Zone up by 0.75% and Reliance Industries up by 0.65%.

On the flip side, Bharti Airtel down by 2.49%, GAIL India down by 2.07%, Tata Motors down by 1.94%, Tata Motors - DVR down by 1.85% and Bajaj Auto down by 1.76% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 308.48 points or 1.46% to 20,750.72, Nikkei 225 decreased 106.47 points or 0.67% to 15,669.33, Taiwan Weighted decreased 44.51 points or 0.51% to 8,716.07, KOSPI Index decreased 5.45 points or 0.27% to 1,989.85 and FTSE Bursa Malaysia KLCI decreased 4.13 points or 0.25% to 1,650.71.

On the other hand, Shanghai Composite increased 17.79 points or 0.6% to 3,006.39. Jakarta Stock Exchange was closed today on account of national holiday.

The European markets were trading in red; UK’s FTSE 100 decreased 41.29 points or 0.63% to 6,480.97, Germany’s DAX decreased 132.24 points or 1.36% to 9,576.85 and France’s CAC decreased 56.44 points or 1.33% to 4,178.42.