Sensex, Nifty hover near neutral lines

Indian equity benchmarks were hovering near their neutral lines in early afternoon deals, amid negative cues from other Asian markets and selling at Realty and Banking counters. Traders got anxious, as India’s services sector activity eased to a three-month low in June. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index fell at 58.5 in June from 61.2 in May. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- eased to 59.4 in June as against 61.6 in May. Besides, States continue to pay higher interest rates to investors for their debt, with the latest weighted average cost rising to 7.46 per cent at Tuesday's auctions wherein nine states raised Rs 16,200 crore.

On the global front, Asian markets were trading mostly in red, after the private sector in Hong Kong continued to expand in June, albeit at a slower pace, with a services PMI score of 50.3. That's down from 50.6 in May, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex is currently trading at 65430.26, down by 48.79 points or 0.07% after trading in a range of 65317.91 and 65584.33. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.63%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were FMCG up by 1.35%, Oil & Gas up by 0.96%, PSU up by 0.88%, Auto up by 0.88% and Power up by 0.76%, while Realty down by 0.16%, Bankex down by 0.14% and Consumer Durables down by 0.11% were the few losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.01%, ICICI Bank up by 2.00%, ITC up by 1.99%, Tech Mahindra up by 1.89% and Power Grid Corporation of India up by 1.38%. On the flip side, HDFC Bank down by 3.03%, HDFC down by 2.94%, Bajaj Finserv down by 0.88%, Bajaj Finance down by 0.69% and Tata Motors down by 0.56% were the top losers.

Meanwhile, Fitch Ratings has said that Indian oil marketing companies' (OMCs) marketing segment to turn profitable from the financial year ending March 2024 (FY24) as crude oil prices fall to Fitch's assumption of $78.8 per barrel, following large losses in FY23 due to high crude prices and unchanged retail fuel prices. It said this should enable the OMCs to partly recoup the FY23 (April 2022 to March 2023) losses in first half of FY24, before the fall in crude prices in recent months is reflected in retail prices.

The rating agency expected India's petroleum product demand in the financial year ending March 2024 (FY24) to grow by a mid-single digit percentage after a 10 per cent rise in FY23, which was aided by the post-pandemic pent-up demand. Medium-term product demand growth is supported by Fitch's expectation of 6-7 per cent GDP growth for India over the next few years, driven by the government's increasing infrastructure spending and a pick-up in industrial activity.

Fitch Ratings also expects Indian refiners' gross refining margins (GRM) to moderate in FY24 from the record high in FY23 as it expects an easing of tight industry conditions. However, it still expects FY24 GRMs to be above mid-cycle levels due to increasing demand after China's reopening and uncertainty over Russia's transportation fuel supply. The normalisation of product spreads has also prompted India to discontinue in recent months the special excise duties on exports of diesel and aircraft turbine fuel that were imposed in July 2022.

The CNX Nifty is currently trading at 19394.50, up by 5.50 points or 0.03% after trading in a range of 19344.70 and 19421.60. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 3.06%, Divi's Laboratories up by 2.96%, HDFC Life Insurance up by 2.73%, Hero MotoCorp up by 2.32% and BPCL up by 2.27%. On the flip side, HDFC down by 2.94%, HDFC Bank down by 2.88%, Tata Consumer Products down by 1.37%, Eicher Motors down by 1.30% and Bajaj Finserv down by 0.87% were the top losers. 

Asian markets were trading mostly in red; Hang Seng declined 311 points or 1.6% to 19,104.68, Taiwan Weighted lost 84.34 points or 0.49% to 17,056.43, Nikkei 225 slipped 83.82 points or 0.25% to 33,338.70, Shanghai Composite weakened 26.01 points or 0.8% to 3,219.34, Straits Times fell 16.11 points or 0.5% to 3,187.66 and KOSPI dropped 14.31 points or 0.55% to 2,579.00, while Jakarta Composite gained 20.66 points or 0.31% to 6,702.41.