Markets continue healthy trade in late afternoon session

Indian equity markets continued their healthy trade in late afternoon session on account of buying in front line counters.  The broader indices, BSE Mid cap index and Small cap index were also trading in green. Sentiments remained upbeat, even as India’s service sector remained into contraction territory in the month of June, as the emergence of the pandemic and the reintroduction of containment measures restricted demand. New work intakes and output contracted at the fastest rates since July 2020, which prompted companies to reduce employment again. Traders took note of report that Union Finance Minister Nirmala Sitharaman has said that the government has been proactive in responding to the challenges caused by COVID-19 and is also taking up substantial reforms despite the pandemic. Sector wise, coal sector remained in focus, as India's total coal production registered a marginal decline of 2.02 per cent to 716.084 million tonnes during the last fiscal year.

On the global front, Asian markets were trading mixed with U.S. markets set to be closed for observance of Independence Day. European markets were trading mostly in red with investors keeping a wary eye on the oil market, while the prospect of a bidding war for Wm Morrison sparked interest across the U.K. grocery sector.

The BSE Sensex is currently trading at 52,816.34, up by 331.67 points or 0.63% after trading in a range of 52604.35 and 52884.30. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.23%, while Small cap index was up by 0.84%.

The top gaining sectoral indices on the BSE were Realty up by 2.21%, Metal up by 1.46%, Telecom up by 1.05%, Bankex up by 0.99% and Basic Materials was up by 0.97%, while Power down by 0.24% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.80%, Larsen & Toubro up by 1.62%, HDFC Bank up by 1.55%, Bajaj Finserv up by 1.40% and Bajaj Finance up by 1.34%. On the flip side, Tech Mahindra down by 0.84%, Titan Company down by 0.65%, HCL Tech down by 0.29%, Dr. Reddy's Lab down by 0.28% and Bharti Airtel down by 0.03% were the top losers.

Meanwhile, India’s service sector remained into contraction territory in the month of June, as the emergence of the pandemic and the reintroduction of containment measures restricted demand. New work intakes and output contracted at the fastest rates since July 2020, which prompted companies to reduce employment again. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index fell to 41.2 in June from 46.4 in May. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - also eased to 43.1 in June from 48.1 in May.

Business activity and new orders decreased in four out of the five broad areas of the service economy, with the fastest rates of contraction registered in Consumer Services. Transport & Storage was the only segment to post growth. International demand for Indian services deteriorated further in June, with new export orders falling for the sixteenth consecutive month. The pace of contraction remained sharp, despite easing from May.

On the inflation front, firms reported that higher transportation and material costs continued to push-up average input prices. The rate of inflation was at a five-month low, but outpaced its long-run average. Finance & Insurance was the only category to record lower input prices. Services companies continued to share rising cost burdens with clients by lifting their selling prices in June.

The CNX Nifty is currently trading at 15,816.95, up by 94.75 points or 0.60% after trading in a range of 15762.05 and 15835.05. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.34%, Tata Steel up by 1.70%, HDFC Bank up by 1.59%, Larsen & Toubro up by 1.56% and Eicher Motors up by 1.54%. On the flip side, HDFC Life Insurance down by 1.08%, Tech Mahindra down by 0.91%, BPCL down by 0.73%, Cipla down by 0.61% and Titan Company down by 0.56% were the top losers.

Asian markets were trading mixed, Taiwan Weighted strengthened 209.18 points or 1.18% to 17,919.33, Shanghai Composite gained 15.56 points or 0.44% to 3,534.32, KOSPI rose 11.43 points or 0.35% to 3,293.21 and Straits Times was up by 5.47 points or 0.17% to 3,134.42. On the flip side, Jakarta Composite lost 17.40 points or 0.29% to 6,005.61, Hang Seng decreased 166.92 points or 0.59% to 28,143.50 and Nikkei 225 was down by 185.09 points or 0.64% to 28,598.19.

European markets were trading mostly in red, France’s CAC decreased 3.96 points or 0.06% to 6,548.90 and Germany’s DAX was down by 41.94 points or 0.27% to 15,608.15. On the flip side, UK’s FTSE 100 increased 9.81 points or 0.14% to 7,133.08.