Weak trade persists over Dalal Street

Weak trade continued over the Dalal Street in early afternoon session, with both Sensex and Nifty trading in red, impacted by negative cues from other Asian markets. Traders got cautious, after an IMF official said that the Asia Pacific region is facing three main risks, including due to global financial tightening and a slowdown in China. Shanaka Jayanath Peiris, Division Chief of Regional Studies Division, Asia Pacific Department at the IMF, also said that currencies in the region have depreciated sharply while public debt ratios have increased.

Traders failed to take any sense of relief with reports that India’s services sector growth improved in the month of October, recovering some of the growth momentum lost in September, as favourable demand for services continued to underpin increases in new business and output. The seasonally adjusted S&P Global India Services PMI Business Activity Index surged to 55.1 in October from 54.3 in September. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- improved to 55.5 in October from 55.1 in September.

On the global front, Asian markets were trading mostly in red, as China's service sector registered a sustained slowdown in activity as efforts to curb the spread of Covid-19 continued to disrupt business operations in October. The survey results from S&P Global showed that the Caixin services Purchasing Managers' Index fell to 48.4 in October from 49.3 in the previous month. The reading signaled that the sector contracted the most since May.

The BSE Sensex is currently trading at 60809.95, down by 96.14 points or 0.16% after trading in a range of 60485.14 and 60994.37. There were 12 stocks advancing against 17 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index up by 0.02%.

The top gaining sectoral indices on the BSE were Telecom up by 0.88%, Bankex up by 0.43%, PSU up by 0.29%, FMCG up by 0.28% and Healthcare up by 0.12%, while Utilities down by 1.38%, Power down by 1.29%, IT down by 1.01%, TECK down by 0.66% and Auto down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.36%, Bharti Airtel up by 1.15%, SBI up by 1.08%, Indusind Bank up by 0.82% and Titan Co up by 0.71%. On the flip side, Tech Mahindra down by 2.29%, Power Grid down by 2.02%, Mahindra & Mahindra down by 1.57%, NTPC down by 1.38% and Ultratech Cement down by 1.29% were the top losers.

Meanwhile, India’s services sector growth improved in the month of October, recovering some of the growth momentum lost in September, as favourable demand for services continued to underpin increases in new business and output. The seasonally adjusted S&P Global India Services PMI Business Activity Index surged to 55.1 in October from 54.3 in September. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- improved to 55.5 in October from 55.1 in September.

The report further noted that the domestic market was the main source of new business gains, as foreign sales decreased further at the start of the third fiscal quarter. Monthly deteriorations in international demand have been registered since the onset of COVID-19 in March 2020. However, Indian services companies reported greater operating expenses in October, stretching the current sequence of inflation to 28 months. The latest increase was the most pronounced since July and historically marked.

Concurrently, the rate of charge inflation ticked fractionally higher in October as companies sought to transfer cost increases to their clients. The upturn was strong in the context of historical data. Ongoing increases in new business and output requirements continued to support job creation in the service economy. Employment rose for the fifth month in a row and at the second-fastest pace in over three years (behind August). Besides, capacity pressures among services companies remained mild in October, as backlogs rose at a slight pace that was broadly similar to September.

The CNX Nifty is currently trading at 18035.40, down by 47.45 points or 0.26% after trading in a range of 17959.20 and 18106.30. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 1.39%, Axis Bank up by 1.23%, Bharti Airtel up by 1.14%, SBI up by 0.90% and Indusind Bank up by 0.89%. On the flip side, Tech Mahindra down by 2.40%, Hindalco down by 2.28%, Power Grid down by 2.08%, NTPC down by 1.60% and Mahindra & Mahindra down by 1.55% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 457.36 points or 2.89% to 15,369.81, Taiwan Weighted dropped 113.57 points or 0.87% to 12,986.60, Shanghai Composite declined 9.13 points or 0.3% to 2,994.24 and Straits Times trembled 38.33 points or 1.22% to 3,102.80. On the flip side, KOSPI rose 3.18 points or 0.14% to 2,340.05 and Jakarta Composite soared 17.73 points or 0.25% to 7,033.42.