Markets pare some losses in late afternoon session

Indian equity benchmarks pared some of their early losses in late afternoon session but continued to trade in negative territory. The markets trimmed losses with the report that Reserve Bank of India (RBI) kept policy interest rates unchanged at 6.25% for a third straight meeting today, shifting focus to ways to mop up excess cash in the banking system that threatens to stoke inflation. It however raised the reverse repo rate from 5.75% to 6%. Some support also came in with the report that services sector in India registered second straight month of growth in March, driven by strong rise in new work orders amid softer inflationary pressures. The Nikkei India Services Purchasing Managers' Index (PMI) rose to 51.5 in March from 50.3 in February. However, traders remained cautions with global credit rating agency Crisil’s report that CPI inflation is likely to average higher at 5 percent in the current fiscal on expectations of increasing pressure on food prices as well as uptick in global oil and commodity rates. On sectoral front, shares of some railway related companies were trading higher after the government approved setting up of Rail Development Authority.

On the global front, European markets were trading in red following indications by the U.S. Federal Reserve that it wants to pare back its balance sheet. Asian markets were trading in red. Back home, in scrip specific development, Force Motors edged higher after the company reported the production, sales and export of the products manufactured during the month of March 2017. The company’s production of Small Commercial Vehicles (SCV) & Light Commercial Vehicles (LCV) stood at 1,822 units and Utility Vehicles (UV), Sports Utility Vehicles (SUV) & Tractors stood at 1,387 units. The company’s domestic sales for SCV & LCV stood at 2,575 units and UV, SUV & Tractor stood at 1,554 units, while the company has exported 226 units of SCV & LCV and 7 units of UV, SUV & Tractor in month of March 2017.

The BSE Sensex is currently trading at 29933.87, down by 40.37 points or 0.13% after trading in a range of 29817.59 and 29949.60. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.11%, while Small cap index down by 0.13%.

The top gaining sectoral indices on the BSE were Realty up by 2.46%, Energy up by 1.00%, Oil & Gas up by 0.78%, Power up by 0.34% and PSU up by 0.31%, while Consumer Durables down by 0.97%, FMCG down by 0.80%, Healthcare down by 0.66%, Telecom down by 0.55% and Metal down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.07%, Bajaj Auto up by 1.37%, Axis Bank up by 0.98%, Power Grid up by 0.95% and GAIL India up by 0.55%. On the flip side, ITC down by 1.63%, Coal India down by 1.19%, Adani Ports & SEZ down by 1.09%, Bharti Airtel down by 0.97% and ICICI Bank down by 0.84% were the top losers.

Meanwhile, the Activity in India's service sector expanded for the second successive month in March to reach at a five-month high on the back of strong rise in new work. The seasonally adjusted Nikkei Services Business Activity Index rose above the critical 50.0 level for the second-month running in March, posting 51.5 from 50.3 in February. Though the input costs facing services firms rose again in March, the improvement in business conditions, rise in output and slight growth in employment helped the index to move upwards. Underpinning the expansion in services activity was a back-to-back rise in new business inflows, while growth of new work also gathered pace in March.

The seasonally adjusted Nikkei India Composite PMI Output Index which measures both manufacturing and services also increased to 52.3 from 50.7 in February, signaling a quicker rise in private sector activity across the country. As per the survey, new business and output rose for the second straight month in March, with rates of expansion accelerating in both cases. Besides, the improvement in business conditions promoted job creation, while confidence towards the year-ahead outlook for activity was at a four-month high. The report further noted that factory new orders increased at the strongest rate since last October.

On the inflation front, the survey stated that input costs facing services firms rose again in March, thereby stretching the current sequence of inflation to seven months. The main items reported to be up in price over the month were fuel and food. In contrast to the trend seen in services, purchase cost inflation in the manufacturing industry softened to a four-month low. Moreover, amid reports of the passing on of higher cost burdens to clients, some services companies raised their own selling prices in March. Overall, the rate of charge inflation was slight, having softened since the preceding month. Services companies indicated that activity is expected to rise over the coming 12 months, with the overall degree of optimism at a four-month high.

The CNX Nifty is currently trading at 9252.10, down by 13.05 points or 0.14% after trading in a range of 9218.85 and 9256.15. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.09%, Bajaj Auto up by 1.30%, IndusInd Bank up by 1.22%, Indian Oil Corp. up by 0.92% and Zee Entertainment up by 0.91%. On the flip side, Hindalco down by 2.57%, ITC down by 1.77%, Coal India down by 1.31%, Aurobindo Pharma down by 1.30% and Adani Ports & SEZ down by 1.28% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 264.21 points or 1.4% to 18,597.06, Hang Seng decreased 127.08 points or 0.52% to 24,273.72, Taiwan Weighted decreased 51.68 points or 0.52% to 9,897.80, KOSPI Index decreased 8.1 points or 0.37% to 2,152.75 and FTSE Bursa Malaysia KLCI decreased 5.11 points or 0.29% to 1,739.56. On the flip side, Jakarta Composite increased 3.26 points or 0.06% to 5,680.24 and Shanghai Composite increased 10.7 points or 0.33% to 3,281.01.

All European markets were in red; Germany’s DAX decreased 50.26 points or 0.41% to 12,167.28, UK’s FTSE 100 decreased 40.92 points or 0.56% to 7,290.76 and France’s CAC decreased 9.25 points or 0.18% to 5,082.60.