Benchmarks trade near day’s low in late afternoon session

The Indian equity benchmarks traded near day’s low point in late afternoon session. A level of pressure was seen on frontline stocks, especially ITC and Reliance Industries. Domestic sentiments got hit, as India's services sector activity expanded at a slower pace in December as rates of growth in sales eased to a three-month low and staff hiring came to a halt amid weak business optimism. The seasonally adjusted India Services Business Activity Index fell from 53.7 in November to 52.3 in December. Adding some worries on the street with the World Bank’s statement that India’s economy is estimated to contract by 9.6 percent in the fiscal year 2020-21, reflecting a sharp drop in household spending and private investment, and the growth is expected to recover to 5.4 percent in 2021. On the sectoral front, sugar sector remained in focus, as Indian Sugar Mills Association (ISMA) has said that India's sugar production increased 42 per cent year-on-year during October-December period at 110.22 lakh tonne. Sugar marketing year runs from October to September.

On the global front, Asian markets were trading mostly in red despite the positive cues overnight from Wall Street. Investors remained cautious as they awaited the results of two key Senate runoffs in Georgia. European markets were trading marginally higher, as the coronavirus pandemic and U.S. political developments remain a key focus for investors.

The BSE Sensex is currently trading at 47994.10, down by 443.68 points or 0.92% after trading in a range of 47961.44 and 48616.66. There were 7 stocks advancing against 22 stocks declining on the index, while 1 stock remains unchanged.

The broader indices were trading in red; the BSE Mid cap index declined 0.50%, while Small cap index was down by 0.77%.

The top gaining sectoral indices on the BSE were Telecom up by 1.23%, Utilities up by 1.14%, Metal up by 1.03%, Consumer Durables up by 0.58% and Power was up by 0.55%, while Energy down by 2.17%, FMCG down by 1.56%, IT down by 1.41%, Healthcare down by 1.17% and Auto was down by 1.07% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.43%, Bharti Airtel up by 1.82%, ONGC up by 1.79%, ICICI Bank up by 0.70% and SBI up by 0.30%. On the flip side, ITC down by 2.96%, Reliance Industries down by 2.76%, Bajaj Finance down by 2.39%, HCL Tech down by 1.98% and Bajaj Finserv down by 1.73% were the top losers.

Meanwhile, the growth of India’s service sector slowed in the month of December, although it remained well above the 50-level that separates growth from contraction, with output and new business rising for the third straight month in December. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index fell to 52.3 in December from 53.7 in November. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - eased to 54.9 in December from 56.3 in November.

The report further noted that global COVID-19 restrictions, particularly travel bans, reportedly restricted international demand for Indian services at the end of 2020. New export business decreased sharply, but at the slowest pace since March. Besides, job shedding was resumed in December, with some firms mentioning that liquidity problems, labour shortages and subdued demand caused the latest fall in employment. The decline in payroll numbers was the ninth in ten months, but marginal overall.

On the price front, input costs increased to the greatest extent since February, on the back of higher prices for a number of items, including cleaning products and fuel, but a renewed fall in selling prices as some firms sought to beat competition and secure new work. Although companies maintained an upbeat view that output will increase in 2021, the overall level of positive sentiment fell from November.

The CNX Nifty is currently trading at 14074.85, down by 124.65 points or 0.88% after trading in a range of 14039.90 and 14244.15. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 3.48%, GAIL India up by 2.59%, Bharti Airtel up by 1.85%, ONGC up by 1.69% and Shree Cement up by 0.92%. On the flip side, ITC down by 3.05%, Reliance Industries down by 2.69%, Bajaj Finance down by 2.29%, Axis Bank down by 2.14% and Eicher Motors down by 2.05% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 102.69 points or 0.38% to 27,055.94, Jakarta Composite lost 71.66 points or 1.17% to 6,065.68, KOSPI fell 22.36 points or 0.75% to 2,968.21, Taiwan Weighted dropped 16.90 points or 0.11% to 14,983.13 and Straits Times was down by 1.91 points or 0.07% to 2,857.77. On the flip side, Shanghai Composite gained 22.20 points or 0.63% to 3,550.88 and Hang Seng was up by 42.44 points or 0.15% to 27,692.30.

European markets were trading higher, UK’s FTSE 100 increased 39.93 points or 0.6% to 6,652.18, France’s CAC increased 0.13 points to 5,564.73 and Germany’s DAX was up by 5.76 points or 0.04% to 13,656.98.