Bears tighten grip on Dalal Street

Key Indian benchmarks remained lackluster in late afternoon session, with the Sensex and the Nifty falling around 200 and 55 points, respectively as bears tighten grip on the street, tracking weak global cues. Besides, telecom index declined the most among all other sectoral indices, followed by Auto and Healthcare. Losses led by major industry leaders like Sun Pharma, ITC and Bajaj Auto along with sluggish broader indices, kept the markets down in noon deals. The domestic sentiments got cautious with a report that bank deposit growth falls to a five-decade low to 6.7 percent in the fiscal year ended March 2018. Bankers say the reversal from the huge deposits post demonetisation and the steady movement of savings away from bank deposits has hit growth. Anxiety also remained on the street with the credit ratings agency, ICRA’s latest report that the high quantum of non-performing asset (NPA) will restrict the overall bank credit growth to a moderate 7-8% in fiscal 2018-19, despite recapitalisation of public sector banks (PSBs) and private sector players upping their game with a 25 percent credit growth. It also said that India Inc will borrow more from cheaper sources abroad. Traders failed to take any sense of relief with a private report stating that India tops the list of the fastest growing economies in the world for the coming decade and is projected to grow at 7.9 per cent annually, ahead of China and the US. The investors also paid no heed towards the report that activity in India’s services sector grew at the fastest pace in month of April, on the back of greater inflows of new work. According to the survey report, the seasonally adjusted Nikkei Services Business Activity Index remained above the neutral mark of 50.0 in April, posting reading at 51.4, up from 50.3 in March. The Nikkei India Composite PMI Output Index which measures both manufacturing and services too climbed to 51.9 in April from 50.8 in March.

On the global front, European markets were trading mixed, as investors fret about the outcome of Sino-US trade talks and look ahead to the release of US jobs report due later in the day for directional cues. Employment is expected to increase by 192,000 jobs in April after rising by 103,000 jobs in March. The unemployment rate is expected to dip to 4.0 percent from 4.1 percent. Asian markets were trading in red. Back home, in scrip specific development, Bhageria Industries was trading higher after the company received approval from National Company Law Tribunal (NCLT), Mumbai Bench for the scheme of Amalgamation of Nipur Chemicals with itself.

The BSE Sensex is currently trading at 34904.24, down by 198.90 points or 0.57% after trading in a range of 34888.40 and 35206.55. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.41%, while Small cap index was down by 0.11%.

The only gaining sectoral indices on the BSE were Consumer Durables up by 0.30% and Oil & Gas up by 0.05%, while Telecom down by 1.40%, Auto down by 1.05%, Healthcare down by 1.03%, Power down by 0.98% and FMCG down by 0.93% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 2.55%, ICICI Bank up by 0.73%, HDFC Bank up by 0.66%, Indusind Bank up by 0.65% and Hindustan Unilever up by 0.63%. On the flip side, Sun Pharma down by 2.51%, ITC down by 2.50%, Bajaj Auto down by 2.24%, Axis Bank down by 2.21% and Bharti Airtel down by 2.08% were the top losers.

Meanwhile, maintaining expansion mode for the second straight month, activity in India’s services sector grew at the fastest pace in month of April, on the back of greater inflows of new work. Easing inflationary pressures along with favourable demand conditions also helped bolster business activity. However, outstanding business continued to increase at service providers during reported month.

According to the survey report, the seasonally adjusted Nikkei Services Business Activity Index Index remained above the neutral mark of 50.0 in April, posting reading at 51.4, up from 50.3 in March. The Nikkei India Composite PMI Output Index which measures both manufacturing and services too climbed to 51.9 in April from 50.8 in March.

Besides, the report highlighted that job creation in the services sector accelerated to the sharpest since March 2011, reflecting an uptick in demand and the manufacturing sector also reported a renewed rise in staffing levels but at marginal pace. The report further showed that order book volumes across India’s service sector were marginally higher but saw expansion by accelerating from the preceding month due to strong demand. New orders placed at Indian manufacturers also rose for the sixth successive month during the month of April.

On the price front, input cost inflation in the both services and manufacturing sector softened, coming below their respective historical averages. Besides, output charge inflation too eased, though the firms attempt to pass on their higher cost burdens to the consumers.

The CNX Nifty is currently trading at 10624.95, down by 54.70 points or 0.51% after trading in a range of 10613.55 and 10700.45. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 2.63%, GAIL India up by 2.20%, Tech Mahindra up by 1.23%, HCL Tech. up by 0.96% and BPCL up by 0.93%. On the flip side, Sun Pharma down by 2.99%, ITC down by 2.91%, Bajaj Auto down by 2.49%, Axis Bank down by 2.28% and Bharti Airtel down by 2.13% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 386.87 points or 1.28% to 29,926.50, Jakarta Composite decreased 71.11 points or 1.21% to 5,787.62, KOSPI Index decreased 25.87 points or 1.04% to 2,461.38, Shanghai Composite decreased 9.83 points or 0.32% to 3,091.03 and FTSE Bursa Malaysia KLCI decreased 5.78 points or 0.31% to 1,846.02. On the flip side, Taiwan Weighted increased 15.19 points or 0.14% to 10,529.37.

European Markets were trading mixed; UK’s FTSE 100 increased 27.99 points or 0.37% to 7,530.68 and Germany’s DAX increased 43.44 points or 0.34% to 12,733.59. On the flip side, France’s CAC decreased 11.41 points or 0.21% to 5,490.25.