Benchmarks witness additional selling pressure; Nifty slips sub 5950 bastion

Across the board selling pressure amidst pessimistic regional counterparts have dragged the benchmark equity indices to intra-day’s low, which despite positive macro-economic data, failed to break-out in green. Driven by rising foreign orders, India’s services sector logged a growth at its strongest pace in year during January. The seasonally adjusted HSBC Services Business Activity Index came at 57.5 in January, up from 55.6 in the previous month. However, after getting a negative start, barometer 30 share index, Sensex was trading lower near 19750 level, with a cut of close to half a percent. Likewise, 50 share widely followed index, Nifty, too declining over 0.50% was off its 5950 bastion.  Broader indices, meanwhile, were trading lower close to a percent.

On the global front, Asian shares were trading deep in red, with investors persistently booking profits, on worries about mounting political uncertainty in Spain and Italy. Spain was tackling a corruption scandal, as Prime Minister Mariano Rajoy denied allegations that he received secret cash payments. In Italy, former Prime Minister Silvio Berlusconi pledged to turn back the current conservative fiscal policies if he is re-elected in the forthcoming election. In addition, there were also concerns over the health of the Italian banking system.

Closer home, although 12 sectoral pivotals are trading in red terrain, stocks from Realty, Consumer Durables and Capital Goods counters are the worst performers. On the flip side, Health Care counter is the only sector showcasing resilience. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1773:699, while 114 shares remained unchanged.

The BSE Sensex is currently trading at 19668.69, down by 82.50 points or 0.42% after trading in a range of 19717.26 and 19658.76. There were 6 stocks advancing against 22 declines on the index, while 2 stocks remained unchanged.

The broader indices too lost additional ground; the BSE Mid cap and Small cap index was trading lower by 0.90% and 1.02% respectively.

The only gaining sectoral indices on the BSE were, Health Care up by 0.48%. While, Realty down by 1.36%, Consumer Durables down by 0.99%, Capital Goods down by 0.95%, Bankex down by 0.79% and Power down by 0.72% were the top losers on the index.

The top gainers on the Sensex were Sun Pharma up by 3.84%, Gail India up by 1.68%, TCS up by 0.65%, Maruti Suzuki up by 0.55% and Bajaj Auto up by 0.24%.

On the flip side, BHEL down by 2.90%, Tata Motors down by 2.24%, Sterlite Industries down by 1.96%, Hero MotoCorp down by 1.65% and Bharti Airtel down by 1.53% were the top losers on the Sensex.

Meanwhile, driven by rising foreign orders, India’s services sector logged a growth at its strongest pace in year during January. Marking a 45-month expansionary sequence, the seasonally adjusted HSBC Services Business Activity Index came at 57.5 in January, up from 55.6 in the previous month. The 50 mark separates growth from contraction and the index has held above that level for over a year now, even though Country appears set to finish the 2012-13 Fiscal Year with its slowest economic growth rate in a decade.

As has been the case since May 2009, the volume of incoming new work in the Indian private sector rose during January. With manufacturing and services companies both registering sharp growth, the overall rate of expansion was steep and the fastest in Eleven months. Whereas, growth in the manufacturing sector eased, services new orders rose at the fastest pace in 18 months.

The HSBC India Composite Output Index posted 56.3 in January, unchanged from December’s reading. Meanwhile, the activity in the Indian private sector improved during December for the forty-fifth successive month. The survey also showed input and output prices rising at a similar pace to the prior month, though much weaker than a year ago.

Meanwhile, the new business sub-index jumped to 58.3, the highest since August 2011, prompting firms to step up the pace of hiring. Payroll numbers in the Indian private sector rose for the eleventh month running in January, amid evidence of increased volumes of incoming new work. That said, the rate of job creation was only slight and broadly in line with that seen in December.

Further, January data signaled broadly steady inflation reading even as input prices continuing the trend that started in April 2009, rose during January. Furthermore, optimism was signaled by service providers in India during January, with approximately 42% of services companies predicting overall activity at their units to increase, with just 3% forecasting a decrease.

The report further highlighted broadly steady Inflation readings amidst simmering fuel, raw material and labour cost pressures that underscore the need for RBI to approach policy easing with caution.

The S&P CNX Nifty is currently trading at 5,949.20, down by 38.05 points or 0.64% after trading in a range of 5,970.00 and 5,947.55. There were 14 stocks advancing against 35 declines while one stock remained unchanged on the index.

The top gainers of the Nifty were Sun Pharma up by 3.64%, Gail up by 1.56%, ACC up by 1.22%, Ambuja Cements up by 1.02% and TCS up by 0.37%.

On the flip side, Jaiprakash Associates down by 3.71%, BHEL down by 2.97%, BPCL down by 2.58%, Bank of Baroda down by 2.56% and Tata Power down by 2.28% were the major losers on the index.

All the Asian equity indices were trading in the red; Shanghai Composite declined 0.12%, Hang Seng tumbled 1.91%, Jakarta Composite dipped 0.50%, KLSE Composite slipped 0.23%, Nikkei 225 crumbled 1.90%, Straits Times dropped 0.92%, KOSPI Composite contracted 0.77% and Taiwan Weighted was down by 0.46%.