Losses at Dalal Street widens further; Metals drag

The losses at the Indian stock markets are slowly deepening with major indices trading lower by over a percent. There is hardly any support from any corner, after the whole global markets got spooked with the disappointment from ECBs decision of not offering any immediate stimulus measures. After the Europe and US overnight, the regional peers too are suffering sharp cut, weighing down the sentiments of the domestic markets. There was additional pressure with IMD saying that monsoon rains will not be enough to save the country from its first drought in three years, the monsoon rains crucial for the agriculture has been termed deficient by 19 percent and may add up to the inflationary pressure. Traders were opting to book profit after the report that service sector activity dipped to 54.2 in July, as against 54.3 in the previous month. Back on street, the metal sector was exerting maximum pressure on the downside to the markets, closely followed by capital goods and realty, while the defensive healthcare sector was the lone gainer on the BSE.

The BSE Sensex is currently trading at 17,041.50 down by 182.86 points or 1.06% after touching a high and low of 17,164.48 and 17,026.97 respectively. There were just 6 stocks advancing against 24 declines on the index.

The broader indices though in red were in better condition than the benchmarks; the BSE Mid cap index was down by 0.69%, while Small cap index has lost 0.59%.

The lone gainer on the BSE sectoral space was HC up by 0.35%, while Metal down by 2.48%, CG down by 1.87%, Realty down by 1.76%, Auto down by 1.49%, Bankex down by 1.42% and Power down by 1.29% were top losers on the BSE sectoral space.

Dr Reddy’s up by 1.51%, Cipla up by 1.16%, NTPC up by 0.31%, ONGC 0.14%, HDFC Bank up by 0.09% were major gainers on the Sensex, while Sterlite Inds down by 3.01%, Tata Steel down by 2.97%, Hindalco down by 2.77%, Coal India down by 2.71%, ICICI Bank down by 2.47% were the major losers in the index.

Meanwhile, service sector activity in India expanded in the month of July, but at a rate that was slightly lower than previous month levels. Though the sector extended its growth momentum for the ninth straight month, but grew at a steady place in July, with growth in new orders and employment holding up. The survey showed order books grew at the same clip as in June, prompting businesses to increase their workforces at a similar pace as in the previous month.

According to the seasonally adjusted HSBC Business Activity Index, the service sector activity dipped to 54.2 in July, as against 54.3 in the previous month. A figure above 50 signals increase in production while, a number below 50 indicates contraction. Besides, the lower growth in service sector in the month under review, the purchasing managers' index (PMI) reading, which measures the overall health of manufacturing sector, though increased at a marked pace, but the slowest since November 2011.

New orders at private sector companies in India rose steeply in July. However, the pace of increase slowed from that recorded in June, with the new orders Index plunging to the lowest since November 2011. Meanwhile, job creation was recorded at manufacturers and service providers during July. The pace of job creation increase was broadly similar across both sectors, resulting in a slight rise in workforces at Indian private sector firms.

The S&P CNX Nifty is currently trading at 5,172.75, down by 55.00 points or 1.05% after touching a high and low of 5,204.35 and 5,164.65 respectively. There were 7 stocks advancing against 42 declines, while one stock remained unchanged on the index.

The major gainers on the Nifty were Dr Reddy up by 1.49%, Ranbaxy up by 1.46%, Asian paint up by 0.57%, Cipla up by 0.50% and Ambuja Cements up by 0.44%. While, JP Associates down by 3.67%, Reliance Infra down by 3.02%, Tata Steel down by 2.94%, Hindalco down by 2.94% and Sterlite Inds down by 2.91% were the major losers on the index.

Asian indices were trading mostly in red; Shanghai Composite was up by 0.24%, Straits Times was marginally up by 0.07%.

On the other hand, Hang Seng was down by 0.89%, Jakarta Composite down by 0.48%, Nikkei 225 plunged by 1.13%, KLSE Composite lost 0.18%, Kospi Composite Index was down by 1.11% and Taiwan Weighted lost 0.69%.