Post Session: Quick Review

Equity markets started the month of June on a subdued note, with benchmark equity indices losing ground right from the start of the trade and settled a little above day’s low level. The session turned out to be quite disappointing as barometer gauges for not once did not attempted to enter the positive territory. Weak macro-data print on domestic front and gloomy global set-up mainly discouraged investors from taking any position in risky asset class such as equities. On the macro-front, shrinking for the first time in over four years, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy slowed to 50.1 in May against its previous reading of 51.1 in April, registering its third monthly decline. Nevertheless, the downtrend of the bourses remained limited on account of surge of Index heavyweight, Infosys. The stock valuated over 4% after company’s founder and former chairman Murthy's returned as executive chairman. By the close of trade, benchmark 30 share and 50 share index, Sensex and Nifty, tanked over 3/4 of a percent to shut shop below the psychological  19650 and 5950 levels respectively.

On the global front, Asian shares ended lower on Monday as investors took profits from recent highs in the face of uncertainty over how much longer the current US stimulus would continue, and data underscoring the fragility of China's economy. The HSBC/Markit Purchasing Managers' Index (PMI) in China for May slipped to 49.2, the lowest level since October 2012 and down from April's final reading of 50.4. Meanwhile, the European markets dropped early on Monday, mirroring the massive sell off in Asian pacific shares, nevertheless the downtrend to some extent remained limited after UK manufacturing growth picked up pace in May. A strong rise in new orders helped Britain's manufacturing sector grow at its fastest pace in over a year last month, a survey showed on Monday. The Markit/CIPS Purchasing Managers' Index rose to 51.3 in May from an upwardly revised 50.2 in April, more than a full point higher than the consensus forecast.

Closer home, prolonging Friday’s downtrend, the Indian stock indices opened flat this morning on weak global cues and since then kept grinding lower, however, the little lower level buying which emerged during dying hours of trade, mainly got the benchmarks out of day’s low. Stocks from Oil & Gas, Power and Capital Goods counter contributed maximum selling pressure. Further, even Auto stocks ran out of the steam as their numbers disappointed. Shares of India's largest passenger car maker Maruti Suzuki slipped 3% after the company saw its sales dip 14% year-on-year to 84,677 units.  While, Bajaj Auto stocks witnessed a cut of over 3% after the company’s May total sales fall 4% to 3.39 lakh units. On the flip side, Information Technology, Metal and Realty counters limited the downtrend of the bourses. The spurt of Infosys’ stocks mainly spelled optimism for the entire Information Technology pivotal. Meanwhile, except, Bharat Petroleum Corporation (BPCL) stocks, shares of public sector oil marketing companies (PSU OMCs) ended lower even as these companies hiked prices of petrol by Rs 0.75 per litre and price of diesel by Rs 0.50 per litre with effect from Saturday, 1 June 2013. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1013: 1307, while 131 scrips remained unchanged. (Provisional)

The BSE Sensex lost 135.80 points or 0.69% to settle at 19624.50.The index touched a high and a low of 19860.19 and 19541.97 respectively. Among the 30-share Sensex pack, 10 stocks gained, while rest of 20 declined and one stock remain unchanged. (Provisional)

The BSE Mid cap ended up by 0.33% and Small cap indices ended lower by 0.07%. (Provisional) On the BSE Sectoral front, Teck up by 1.08%, IT up by 0.93%, Realty up by 0.85% and Metal up by 0.54%, were the only gainers, while Oil & Gas down by 1.97%, Auto down by 1.02%, Power down by 0.94%, Capital Goods down by 0.90% and Consumer Durables down by 0.72%, were the top losers in the space. (Provisional)

The top gainers on the Sensex were Infosys up by 4.42%, Jindal Steel up by 2.25%, Tata Steel up by 1.64%, Gail India up by 1.42% and SBI up by 1.07%, while, Hero MotoCorp down by 3.65%, Bajaj Auto down by 3.32%, ONGC down by 2.85%, Sun Pharma down by 2.68% and HDFC down by 2.40% were the top losers in the index. (Provisional)

Meanwhile, shrinking for the first time in over four years, the seasonally adjusted HSBC Purchasing Managers’ Index, a composite indicator of operating conditions in the manufacturing economy slowed to 50.1 in May against its previous reading of 51.1 in April, registering its third monthly decline.

Production at Indian factories was the lowest since March 2009, mainly on account of softer domestic orders and persistent power shortages. Nevertheless, the PMI index, which gauges business activity in Indian factories but not its utilities, has held above the watershed 50 level that divides growth from contraction for over four years.

Further, although May data signaled rise in order book volumes for the fiftieth month, the overall rate of expansion was marginal and the slowest in that sequence. The factory production sub-index, showed output contracted in May from a month earlier as new orders growth slowed to a trickle. The output sub-index fell to 48.6 in May from 50.2 in April.

Although, input prices increased modestly during the month, but the rate of increase was the lowest in the current 50 months inflationary period. Meanwhile, output prices faced by manufacturers decreased for the first time in four years. Also, manufacturing companies signaled higher staffing levels during May, taking the current sequence of job creation to 15 months. One bright spot in the PMI survey showed orders from abroad came in at a faster pace than in April which might help the sector avoid a downturn this month.

Thus, the survey, which comes hard on the heels of data released on Friday that confirmed Asia’s third largest economy grew at its slowest pace in a decade in the fiscal year that ended in March, suggests with the output prices slowing and inflation receding, the RBI is likely to fire another salvo at its June policy meeting.  The Reserve Bank of India, so far, has slashed its key lending rate thrice this year by 25 basis points each time, lowering the rate to 7.25% to spur economic recovery.

India VIX, a gauge for markets short term expectation of volatility gained 1.76% at 17.29 from its previous close of 16.99 on Friday. (Provisional)

The CNX Nifty lost 47.10 points or 0.23% to settle at 5,938.85. The index touched high and low of 6,011.00 and 5,916.35 respectively. 17 stocks advanced against 33 declining on the index. (Provisional)

The top gainers on the Nifty were Infosys up by 4.00%, Lupin up by 2.35%, Reliance Infrastructure up by 2.26%, Jindal Steel up by 2.13% and Tata Steel was up by 1.97%. On the other hand, ONGC down by 3.51%, Asian Paints down by 3.42%, Bajaj-Auto down by 3.32%, Hero MotoCorp down by 3.30% and Ranbaxy Laboratories down by 3.29% were the top losers. (Provisional)

The European markets were trading in red; France’s CAC 40 was down 0.59%, Germany’s DAX lost 0.69% and the United Kingdom’s FTSE 100 edged lower by 1.50%.

Asian markets went home with red mark on Monday as investors booked profit from recent highs in the face of uncertainty over how long the current US stimulus will continue. Chinese market ended lower as China's factory activity contracted for the first time in seven months in May due to decline in domestic and external demand, while services sector activity also fell, indicating slowing momentum in the world's second-largest economy. Japan’s Nikkei closed lower led by a sharply weaker yen. The Jakarta Composite closed the shutter in negative territory, dragged by agriculture and property sectors that fell more than 3% each.