Weak trade persists on D-Street

Weak trade persisted on Dalal Street in late afternoon session, as the Reserve Bank of India lowered the economic growth forecast for the current fiscal to 7 per cent due to the slowdown in domestic activities and escalation in a global trade war. In the April monetary policy, the growth of Gross Domestic Product (GDP) for 2019-20 was projected at 7.2 per cent. Trading sentiments also remained lackluster after India’s services sector growth eased further in the month of May, as disruptions arising from the elections in the earlier part of the month hampered growth of new work intakes. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index eased to 50.2 in May from 51 in April. However, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- was at 51.7 in May, unchanged from April.

On the global front, European markets were trading in green, after the UK service sector growth improved more-than-expected to a three-month high in May. The survey data from IHS Markit showed that the Chartered Institute of Procurement & Supply Purchasing Managers' Index for services rose to 51.0 in May from 50.4 in April. The reading was also above the forecast of 50.6. However, Asian markets were trading in red, as the International Monetary Fund cut China's growth forecast for this year and next, citing downside risks and high uncertainty surrounding trade tensions, and said more policy easing may be needed if the conflict escalates. The lender lowered the growth forecast for this year to 6.2 per cent from 6.3 per cent seen in April. The projection for next year was trimmed to 6 per cent from 6.1 per cent.

The BSE Sensex is currently trading at 39587.33, down by 496.21 points or 1.24% after trading in a range of 39481.15 and 40159.26. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.62%, while Small cap index was down by 1.52%.

The top losing sectoral indices on the BSE were Oil & Gas down by 2.76%, Capital Goods down by 2.45%, PSU down by 2.22%, Bankex down by 2.13% and Realty down by 2.04%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Coal India up by 1.52%, Power Grid up by 1.32%, Hindustan Unilever up by 1.27%, Asian Paints up by 1.15% and HCL Tech up by 0.74%. On the flip side, Indusind Bank down by 6.97%, Yes Bank down by 5.83%, SBI down by 3.56%, Tata Motors - DVR down by 3.10% and Larsen & Toubro down by 3.02% were the top losers.

Meanwhile, falling to 12-month low, India’s services sector growth eased further in the month of May, as disruptions arising from the elections in the earlier part of the month hampered growth of new work intakes. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index eased to 50.2 in May from 51 in April. However, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services – was at 51.7 in May, unchanged from April.

The report found that new business inflows at service providers increased at the slowest pace in eight months. It further noted that output rose in tandem with ongoing sales growth, but competitive pressures and the elections curbed the upturn. Meanwhile, services companies retained positive projections about the 12-month outlook for business activity. 

Besides, a marginal and softer rise in services fees was registered during the month of May, with charge inflation much weaker than its long-run average. Services companies indicated that delayed client payments prevented them from working on their outstanding business. Backlogs have increased throughout the past three years, though the accumulation recorded in May was the weakest since January.

The CNX Nifty is currently trading at 11862.80, down by 158.85 points or 1.32% after trading in a range of 11830.25 and 12039.80. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Titan up by 1.92%, Coal India up by 1.75%, Hindustan Unilever up by 1.32%, Power Grid up by 1.32% and Asian Paints up by 1.12%. On the flip side, GAIL India down by 11.32%, Indiabulls Housing Finance down by 7.62%, Indusind Bank down by 6.93%, Yes Bank down by 5.73% and SBI down by 3.72% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 37.85 points or 1.32% to 2,823.57, Taiwan Weighted dropped 52.42 points or 0.5% to 10,409.20, Straits Times trembled 12.91 points or 0.41% to 3,129.46 and Nikkei 225 was down by 2.06 points or 0.01% to 20,774.04. On the other hand, Hang Seng increased 10.55 points or 0.04% to 26,905.99.

All European markets were trading in green; UK’s FTSE 100 gained 45.54 points or 0.63% to 7,265.76, France’s CAC surged 37.11 points or 0.70% to 5,329.11 and Germany’s DAX was up by 65.25 points or 0.54% to 12,046.06.