Benchmarks trade choppy in late afternoon session

Indian equity benchmarks continued to trade choppy in late afternoon session after data showed services industry in December contracted for the second month in a row as orders shrank amid a severe cash shortage. Caution over the ongoing two-day GST (Goods and Services Tax) Council meet too arrested the upward trend of the benchmark indices. However, positive trend seen in global markets on abundance of upbeat global economic data helped markets to keep their head above water. Value buying in Realty, IT and Tech counters and slightly strong rupee too provided support to domestic bourses.

On the global front, European markets were trading mostly in green as upbeat data from the U.S., China and Europe bolstered investor optimism for global growth. Asian markets were trading mostly in green. Back home, in scrip specific development, Coal India was trading in green on plan to start the second phase of auction of coal linkages for the non-regulated sector and is likely to put on offer 14.5 million tonnes (MT) of fuel and SSWL jumped higher on aiming to achieve a volume sale of 35.6 lakh in Q4FY17 as compared to 33.24 lakh in Q3FY17, representing a growth of 7% Q-o-Q.

The BSE Sensex is currently trading at 26672.49, up by 29.25 points or 0.11% after trading in a range of 26606.06 and 26723.37. There were 18 stocks advancing against 10 stocks declining on the index, while 2 stocks remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Realty up by 2.07%, IT up by 0.95%, TECK up by 0.93%, Capital Goods up by 0.80% and Consumer Durables up by 0.65%, while Bankex down by 0.49%, FMCG down by 0.19% and Oil & Gas down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.84%, Tata Motors up by 1.82%, ONGC up by 1.63%, Wipro up by 1.39% and Asian Paints up by 1.35%. On the flip side, Reliance Industries down by 1.60%, Hindustan Unilever down by 0.89%, Lupin down by 0.84%, Cipla down by 0.72% and ICICI Bank down by 0.67% were the top losers.

Meanwhile, India's services industry contracted for the second straight month in December, as orders shrank amid a severe cash shortage. Also, backlogs continued to rise, while employment decreased fractionally. The seasonally adjusted Nikkei India Services Business Activity Index stood at 46.8 in December, little changed from 46.7 in November. The index slipped into contraction territory in November and remained in that zone as the rupee ban led to the sharpest fall in new business since September 2013. A reading above 50 indicates economic expansion, while below that points towards contraction.

As per the survey the input costs rose further, but efforts to boost demand led some firms to lower their charges. With factory production also falling, activity across the private sector economy as a whole dipped to the greatest extent in over three years. This was highlighted by the seasonally adjusted Nikkei India Composite PMI Output Index recording 47.6 in December, from 49.1 in November. The survey panel members widely blamed the deterioration in economic conditions on the rupee demonetisation, with concerns towards the speed of the recovery weighing heavily on sentiment.

The survey further stated that cash flow issues reportedly caused another increase in outstanding business among private sector firms, with backlogs rising for the seventh straight month (although only moderately). It added that Indian services provider’s signalled optimism on the 12-month outlook during December although the level of optimism has fallen to the third-lowest in over 11 years of data collection. Though, there are expectations of a rebound in demand in coming 12 months, worries towards the speed of the recovery following the cash recall, hampered confidence.

The CNX Nifty is currently trading at 8196.10, up by 3.85 points or 0.05% after trading in a range of 8180.90 and 8218.50. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.07%, HCL Tech. up by 2.81%, Tech Mahindra up by 2.41%, BHEL up by 2.16% and Bajaj Auto up by 1.77%. On the flip side, Bosch down by 3.07%, Kotak Mahindra Bank down by 1.98%, ACC down by 1.66%, Reliance Industries down by 1.63% and Eicher Motors down by 1.55% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 1.67 points or 0.08% to 2,045.64, FTSE Bursa Malaysia KLCI increased 7.72 points or 0.47% to 1,643.25, Taiwan Weighted increased 14.08 points or 0.15% to 9,286.96, Jakarta Composite increased 19.71 points or 0.37% to 5,295.68, Shanghai Composite increased 22.87 points or 0.73% to 3,158.79 and Nikkei 225 increased 479.79 points or 2.51% to 19,594.16. On the flip side Hang Seng decreased 15.93 points or 0.07% to 22,134.47.

European markets were trading mostly in green; France’s CAC increased 8.78 points or 0.18% to 4,908.11 and Germany’s DAX increased 23.65 points or 0.2% to 11,607.89. On the flip side, UK’s FTSE 100 decreased 3.3 points or 0.05% to 7,174.59.