Indian equity indices continue lackluster trade

Indian equity indices continued their lackluster trade in late afternoon session, hovering in negative territory with the India Meteorological Department's statement that monsoon into October has led to crop damage in many areas. Sentiment remained down beat, as Nikkei India Services Business Activity Index eased to 52 in September from 54.7 in August, pointing to a slower and moderate rate of expansion. Traders booked profits in banking counter after yesterday's rally as central bank cut rate on Tuesday, while buying interest witnessed in steel stocks after the government has extended the minimum import price (MIP) on 66 steel products by another two months to protect the industry against cheap imports. In scrip specific development, Suzlon Energy was trading down after ICRA has suspended rating assigned to the Rs 8,018 crore, long term and short term bank facilities of company.

On the global front, European shares fell on Wednesday on concern that the European Central Bank might reduce the pace of bond buying before its purchase programme ends, hitting utilities and real estate stocks hardest.

The BSE Sensex is currently trading at 28267.43, down by 67.12 points or 0.24% after trading in a range of 28209.19 and 28477.65. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.46%, while Small cap index was up by 0.68%.

The gaining sectoral indices on the BSE were Realty up by 1.74%, Metal up by 1.02%, Power up by 0.43%, Auto up by 0.38%, Capital Goods up by 0.28%, while IT down by 0.51%, Bankex down by 0.44%, TECK down by 0.32%, Oil & Gas down by 0.25%, Consumer Durables down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.53%, SBI up by 1.25%, Hindustan Unilever up by 1.16%, Tata Motors up by 1.12% and Maruti Suzuki up by 1.02%. On the flip side, ONGC down by 1.90%, Axis Bank down by 1.60%, Mahindra & Mahindra down by 1.08%, Bajaj Auto down by 1.06% and Hero MotoCorp down by 0.97% were the top losers.

Meanwhile, India’s service sector growth slowed down in September as pace of new orders moderated amid competitive pressure and unfavourable weather conditions. Output and new business increased at softer rates in both the manufacturing and service sectors. Meanwhile, prices charged were raised in line with higher cost burdens. The seasonally adjusted Nikkei India Services Business Activity Index was down to 52.0 in September from August’s 43-month high of 54.7, the latest reading pointed to a slower rate of expansion that was moderate overall. Outstanding business at Indian service providers rose for the fourth month running in September and at the quickest rate since July 2014.

The seasonally adjusted Nikkei India Composite PMI Output Index which measures both manufacturing and services, fell to 52.4 in September from 42-month high of 54.6 in August. Nonetheless, the latest above-50.0 reading was the fifteenth in as many months, highlighting ongoing growth in the country. However, on the quarterly basis the PMI Composite Output Index posted its highest reading since the January-March 2015 quarter, suggesting a pick-up in GDP growth.

As per the survey, though the level of new business placed with Indian services firms increased moderately in September, panelists mentioned competitive pressure and unfavourable weather conditions as factors weighing on incoming new work. Further, food and petrol prices continued to climb in September, which placed pressure on operating costs. In response, private sector companies raised their own prices for the second straight month, although inflation remained relatively soft.

Business optimism among Indian service providers fell in September, with the degree of confidence remaining below its long-run average. On the employment front, the survey said both services and manufacturing firms reported stagnant staffing levels so far this year, but given the higher backlog of work across the private sector, businesses may be more willing to take on additional workers.

The CNX Nifty is currently trading at 8759.40, down by 9.75 points or 0.11% after trading in a range of 8731.40 and 8806.95. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Tata Motors - DVR up by 2.35%, Hindalco up by 2.27%, Eicher Motors up by 1.58%, Asian Paints up by 1.53% and Tata Power up by 1.42%. On the flip side, ONGC down by 1.85%, Axis Bank down by 1.48%, Idea Cellular down by 1.48%, Hero MotoCorp down by 1.16% and Tech Mahindra down by 1.10% were the top losers.

Asian market were trading mixed; FTSE Bursa Malaysia KLCI increased 0.55 points or 0.03% to 1,661.80, Nikkei 225 was up by 83.59 points or 0.5% to 16,819.24 and Hang Seng rose 98.87 points or 0.42% to 23,788.31.

On other hand, Jakarta Composite decreased 68.3 points or 1.25% to 5,404.02, Taiwan Weighted was down by 15.49 points or 0.17% to 9,272.28 and KOSPI Index decreased 1.86 points or 0.09% to 2,053.00.

European markets were trading in red; Germany’s DAX decreased 79.39 points or 0.75% to 10,540.22, France’s CAC dropped 35.52 points or 0.79% to 4,467.57 and UK’s FTSE 100 was down by 21.01 points or 0.3% to 7,053.33.