Markets make gap-down opening amid weak global cues

Extending their southward journey, key domestic benchmarks have made a dreadful start with both the frontline indices tumbling below their crucial 5,650 (Nifty) and 18,700 (Sensex) levels amid weak global cues. The US markets once again ended lower overnight on getting disappointing economic data. Stocks moved sharply lower after ADP reported that private sector employment rose much less than expected while, most of the Asian equity indices were trading in red at this point of time amid developments in an industrial zone between North Korea and South Korea. Meanwhile, Japanese Nikkei losing the most as stronger yen hitting the Japanese market ahead of the Bank of Japan’s meeting outcome.

Back home, sentiments remained cautious as the Capital market regulator SEBI has voiced concerns over an alarming rise in grey market investments with thousands of crore being raised through illegal means. The market sentiment also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on April 3, 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 368.39 crore on April 3. Meanwhile, Adani Power shares declined over a percent after gaining around 9 percent yesterday. Investors remained worried that State Electricity Boards may contest the CERC order awarding tariff compensation to the company.

On the sectoral front, healthcare and auto remained the only gainers while, realty, banking and consumer durables remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth on the BSE was negative; there were 519 shares on the gaining side against 1068 shares on the losing side while 56 shares remain unchanged.

The BSE Sensex opened at 18,731.38; about 70 points lower compared to its previous closing of 18,801.64, and has touched a high and a low of 18,733.62 and 18,612.32 respectively.

The index is currently trading at 18,663.70, down by 137.94 points or 0.73%. There were 10 stocks advancing against 20 declines on the index.

The overall market breadth has made a weak start with 31.74% stocks advancing against 64.82% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices were down by 0.79% and 0.96% respectively. 

The only gaining sectoral indices on the BSE were, Health Care up by 0.12% and Auto up by 0.09% while, Realty down by 1.37%, Bankex down by 1.24%, Consumer Durables down by 1.19%, IT down by 1.18% and Capital Goods  down by 1.18% were the top losers on the sectoral index.

The top gainers on the Sensex were Dr Reddys Lab up by 1.52%, Gail India up by 1.11%, Bharti Airtel up by 0.94%, Sun Pharma up by 0.67% and Tata Motors up by 0.64%.

On the flip side, HDFC was down by 1.82%, Tata Steel was down by 1.56%, Sterlite Industries was down by 1.44%, BHEL was down by 1.39% and Infosys was down by 1.38% were the top losers on the Sensex.

Meanwhile, growth in services sector, which make up nearly 60% of country’ economics output, eased in March to its slowest pace in 17 months as order books filled at a slower pace. As per the HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies, fell to a 17-month low of 51.4 in March from 54.2 in February.

The services sector growth which rose an 18-month high in January, fell for its second straight month in March to its lowest since November 2011, but it has held above the 50 mark that separates growth from contraction - for the seventeenth successive month. Despite being solid, the pace of expansion eased to the slowest in the current sequence of growth notably due to a deceleration in new business flows.

The greater flow of new business in the service sector resulted in higher backlogs of work, which increased the workloads during the month. In tandem with the higher workloads, service providers also raised their headcounts modestly, marking a 13-month sequence of employment growth.   

Similarly, reflecting the weakest improvement in operating conditions, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, declined to 51.4 in March from 54.8 in February. Further, March data signaled broadly steady inflation reading even as input prices continuing the trend that started in April 2009, rose during March. Subsequently, services companies increased their selling prices.

However, the rate of output charge inflation was, however, moderate and weaker than February. Furthermore, optimism was signaled by service providers in India in March and the degree of confidence was the strongest registered since December 2012. Service sector firms linked positive sentiment to expectations of stronger demand and planned investment in marketing. 

The CNX Nifty opened at 5,640.65; about 37 points lower as compared to its previous closing of 5,672.90, and has touched a high and a low of 5,643.45 and 5,606.80 respectively.

The index is currently trading at 5,621.55, down by 51.35 points or 0.91%. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were Dr. Reddy's Laboratories up by 1.28%, GAIL up by 1.19%, Bharti Airtel up by 0.77%, Tata Motors up by 0.68% and Hindustan Unilever up by 0.66%.

On the flip side, JP Associate down by 2.49%, UltraTech Cement down by 2.26%, Axis Bank down by 2.05%, HDFC down by 2.04% and IndusInd Bank down by 1.94%, were the major losers on the index.

Most of the Asian equity indices were trading in red; Jakarta Composite declined 43.50 points or 0.87% to 4,937.96, Nikkei 225 tumbled 201.51 points or 1.63% to 12,160.69, Straits Times dipped 10.35 points or 0.31% to 3,311.42 and KOSPI Composite was down by 27.05 points or 1.36% to 1,956.17.

On the flip side, KLSE Composite was up 0.18 points or 0.01% to 1,685.58.

Markets in mainland China, Hong Kong and Taiwan remained shut for the trade today.