Benchmarks drift lower amid weak global cues

Prolonging its previous two sessions’ downfall, key domestic benchmarks have started the trading session on a lower note tracking weak global cues. The US markets closed lower on Thursday weighed down by the mixed set of economic reports while, most of the Asian markets have started in red, dragged down by the frail economic reports from US and weakness in commodities. Back home, banks stock were exhibiting subdued trend for the second straight day as the Reserve Bank of India's final guidelines to implement the Basel-III capital rules require banks to steadily build up their capital buffers through March 2018. On the sectoral front, healthcare, software and technology remained the top gainers while, capital goods, realty and metal remained the major loser on the BSE sectoral indices. The sentiments also weighed down as Index heavyweight RIL dipped by nearly 1 percent on reports that the oil ministry has slapped a notice of $1.2 billion, or Rs 7,000 crore, on the company for a sharp fall in gas output from its D6 field in the KG basin. The broader indices were also struggling to get some traction while the market breadth on the BSE was equally divided; there were 885 shares on the gaining side against 887 shares on the losing side while 63 shares remained unchanged.

The BSE Sensex opened at 17,066.84; about 84 points lower compared to its previous closing of 17,151.19, and has touched a high of 17,121.37 while low remain its opening.

The index is currently trading at 17,077.47, down by 73.72 points or 0.43%. There were 9 stocks advancing against 21 declines on the index.

The overall market breadth was evenly divided with 48.23% stocks advancing against 48.34% declines. The broader indices also remained weak; the BSE Mid cap and Small cap indices declined 0.47% and 0.04% respectively.

The few gaining sectoral indices on the BSE were, HC up by 0.55%, IT up by 0.44%, TECk up by 0.19% and FMCG was up by 0.12%. While, CG down by 1.50%, Realty down by 1.37%, Bankex down by 1.14%, Power down by 0.94% and Metal down by 0.85% were the top losers on the index.

The top gainers on the Sensex were Cipla up by 3.26%, Wipro up by 1.60%, ONGC up by 0.60%, Sun Pharma up by 0.43% and TCS up by 0.36%.

On the flip side, BHEL was down by 2.82%, Hero MotoCorp was down by 2.82%, SBI was down by 2.51%, DLF was down by 2.21% and Bajaj Auto was down by 1.67% were the top losers on the Sensex.

Meanwhile, India’s service sector expanded slightly in the month of April. The HSBC PMI services index rose marginally to 52.8 in April as compared to 52.3 in March. Even though growth has been witnessed in the index, it continues to be below the trend. Inflationary pressures have continued in the month of April as well.

On a more positive note there has been an improvement in new orders which has extended the current period of expansion to three years. The expansion has also allowed service firms to add jobs for the second month in a row. Also survey respondents are significantly more optimistic about the outlook over the coming 12 months.

Inflation, however, has continued its rising trend with costs of input rising. Service providers also passed on the increased costs to clients by increasing output charges in April. Going forward inflationary pressures are expected to continue and the RBI has been advised caution if contemplating any further rate cuts. The recent rate cuts were termed as ‘premature’ and ‘too aggressive’ by the bank.

The bank had also come out with the manufacturing purchasing manager’s index yesterday which inched up to 54.9 in April, from 54.7 in March, showing a positive move after three months of declines.  Consequently, the HSBC composite output index (covering manufacturing and services) remained broadly unmoved at 53.8 in April.

The S&P CNX Nifty opened at 5,166.65; about 22 points lower compared to its previous closing of 5,188.40, and has touched a high and a low of 5,177.20 and 5,163.15 respectively.

The index is currently trading at 5,164.00, up by 24.40 points or 0.47%. There were 16 stocks advancing against 34 declines on the index.

The top gainers of the Nifty were Cipla up by 3.01%, Wipro up by 1.61%, HCL Tech up by 0.82%, ACC up by 0.53% and Ranbaxy up by 0.51%.

On the flip side, BHEL down by 3.20%, Axis Bank down by 2.67%, Hero MotoCorp down by 2.37%, SBI down by 2.36% and DLF down by 2.19%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Hang Seng was down 155.40 points or 0.73% to 21,094.13, Jakarta Composite was down 8.57 points or 0.20% to 4,215.43, Straits Times was down 6.54 points or 0.22% to 2,994.40 and KOSPI Composite was down 8.34 points or 0.42% to 1,986.77.

On the flip side, Shanghai Composite was up 2.48 points or 0.10% to 2,442.56, KLSE Composite was up 6.48 points or 0.41% to 1,589.65 and Taiwan Weighted was up by 28.06 points or 0.37% to 7,687.59.