Post session - Quick review

Consolidation in Indian equity markets continued for third consecutive session as concerns over a weak monsoon, rising crude prices and poor opening in European bourses, kept traders jittery for piling up position ahead of a policy meeting by the European Central Bank, on July 5. Benchmark equity indices in the thin session of trade, did not do much entice traction in light of muted global leads. Lacking any fresh trigger, barometer index of  Bombay Stock Exchange (BSE) -Sensex- accumulated a little over a quarter of points to shut shop above the 17450 bastion. The index after sneaking past the 17500 in the morning deals lacked the conviction to reclaim the same level. However, benchmark index of National Stock Exchange -Nifty- managed to pierce through 5300 crucial level by the closing bell. Broader indices for third session in a row outperformed larger peers.

Encouraging comments of Union Agriculture Minister Sharad Pawar that there is ample opportunity to cover the rain deficit caused by the delayed monsoon, did a lot to maintain the contour of the bourses.  He said, “Monsoon has been delayed by two weeks. But situation is not bad though it's not fully satisfactory”. The Met department has told that July and August will get good rains to cover the gap.' Further, much of resilience came from the release of macro economic data. India's services sector in June expanded for the eighth straight month although at a slower clip, but new orders picked up and firms hired workers at the fastest pace in a year.

On the global front, Asian shares concluded near a seven-week’s high level on Wednesday as investors kept high hopes  for more monetary policy stimulus to support the faltering global economy, starting with a likely rate cut by the European Central Bank. Meanwhile, European shares made a shaky start as ongoing concerns over Europe’s economic crisis prompted investors for pocketing profits on equities following a recent sharp rally.

Closer home, stocks from high beta-Metal and rate sensitive, Realty and Consumer Durable closed in green, on the flip side stocks from Oil & Gas, Fast Moving Consumer Goods and Information Technology counters limited the up move. The market breadth on the BSE ended positive; advances and declining stocks were in a ratio of 1750:1132 while 131 scrips remained unchanged. (Provisional)

The BSE Sensex gained 26.77 points or 0.15% and settled at 17,452.48. The index touched a high and a low of 17,523.77 and 17,372.45 respectively. 18 stocks were seen advancing against 12 declining ones on the index (Provisional)

The BSE Mid-cap index gained 0.84% while Small-cap index was up 0.91%. (Provisional)

On the BSE Sectoral front, Metal up 2.05%, Realty up 1.72%, Capital Goods up 0.64%, Power up 0.59% and Consumer Durables up 0.51% were the top gainers while, Oil & Gas down 0.57%, FMCG down 0.49%, IT down 0.37% and Health Care down 0.15% were the only losers.

The top gainers on the Sensex were Sterlite Industries up 5.55%, Jindal Steel up 3.39%, Maruti Suzuki up 2.59%, Bharti Airtel up 2.28% and SBI up 2.04% while, ONGC down 1.88%, Dr. Reddy’s Lab down 1.57%, Wipro down 1.41%, HUL down 0.88% and Coal India down 0.81% were the top losers in the index. (Provisional)

Meanwhile, Service sector activity in India expanded in the month of June, but at a rate that was slightly lower than previous month levels. Nevertheless, the sector extended its growth momentum for the eighth consecutive month thanks largely to the strong output increase as order book volumes continued to expand. The service sector report has come after manufacturing activity survey released on July 2, 2012 showed that manufacturing sector business conditions improved at fastest rate in four months, highlighting the fact that the Indian private sector output registered strong growth in June, 2012.

According to the seasonally adjusted HSBC Business Activity Index, the service sector activity grew at a marginally slower pace of 54.3 in June, as against 54.7 in the previous month. A figure above 50 signals increase in production while, a number below 50 indicates contraction. Though the service sector growth in the month under review remained lower, however the purchasing managers' index (PMI) reading, which measures the overall health of the sector, suggested that strong domestic consumption helped order books fill at their strongest pace in four months.

Though rise in new orders are likely to hold up activity in coming months, however falling demand from India's traditional overseas trading partners like the United States and the European Union could dampen future growth prospects of Indian companies. Besides, employment in the service sector too rose in the month, marking a four-month sequence of expansion. Despite being below the long-run average for this series, the increase in payroll numbers was the strongest since June 2011, while the rate of job creation at manufacturers also accelerated.

But the rate of input cost inflation remained stagnant at elevated levels as it hardly budged from previous month levels. The output price inflation remained stubbornly above the long-run series average in the services sector as it has risen each month since November 2010. Meanwhile, service sector business expectations remained optimistic, although the level of optimism dipped to the lowest since March, sentiment was still above the long-run series average.

Thus, the strong Manufacturing and Service sector PMI have propelled the HSBC Composite Index, which covers both the manufacturing and service sectors, to 55.7 in June, higher from 55.3 seen in May 2012. However, the HSBC survey further indicated that looking at the recent economic indicators and current scenario of high inflationary pressure, there was no room for the Reserve Bank of India to employ further monetary easing measures. Indian central bank had left key interest rates unchanged in its recent monetary policy review meet on June 18 after slashing the repo and reverse rates by 50 basis points each in its previous policy review meet.India VIX, a gauge for market’s short term expectation of volatility lost 1.56% at 18.27 from its previous close of 18.56 on Tuesday. (Provisional)

The S&P CNX Nifty gained 13.30 points or 0.25% to settle at 5,301.25. The index touched high and low of 5,317.65 and 5,273.30 respectively. 28 stocks advanced against 21 declining ones while 1 stock remained unchanged on the index. (Provisional)

The top gainers on the Nifty were Sterlite Industries up 5.31%, Sesa Goa up 4.00%, Jindal Steel up 3.65%, JP Associates up 3.14% and Bharti Airtel up 2.73%. On the other hand, ONGC down 2.34%, Asian Paints down 1.86%, Dr. Reddy’s Lab down 1.68%, Wipro down 1.37% and Kotak Bank down 1.02% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 0.54%, Germany's DAX down 0.45% and Britain’s FTSE 100 down 0.23%.