Post Session: Quick Review

Snapping three sessions’ losses, Indian equity markets negotiated flat but positive close on emergence of some lower level buying in the dying hours of trade. Sentiments to some extent were supported with good macro-economic data amidst negative global set-up. On the macro-front, India's services sector activity expanded in May with a pace that was fastest in three months, driven by uptick in new orders. The HSBC/Markit purchasing manager’s index for the services industry, pointing to a solid expansion in output, inched up to 53.6 in May as against 50.7 registered in April. However, the negative global set-up capped any major uptrend of the markets. By the end of trade, benchmark indices, Sensex and Nifty, inching a little above their neutral line ended above the crucial 19550 and 5900 levels respectively. Meanwhile, broader indices too gaining traction managed a positive close.

On the global front, Asian and European markets succumbed to selling pressure on speculation that an improving US economy will encourage the Federal Reserve to taper bond purchases.  Asian stocks fell, led by Japanese equities after Prime Minister Shinzo Abe failed to provide additional detail on stimulus measures.

Closer home, despite a flattish close, Indian equity markets outperformed rest of the globe. The markets which got a weak start traded downbeat for almost entire session and managed to show some traction only in the last hour of trade when lower level buying emerged. Stocks from Oil & Gas, Realty and Metal counters were the major pocket of strength for the bourses. Strong gains of ONGC and Reliance Industries mainly lifted the Oil & Gas pivotal higher. Shares of real estate companies were down in early trade on stringent penalties in the government approved Realty Bill that aims at organizing and monitoring the sector, however they bounced back to close significantly higher. The Union Cabinet late Tuesday cleared the Real Estate (Regulation and Development) Bill. The Bill is aimed to protect buyers from scheming developers and usher transparency in the sector, unregulated until now. Additionally, fertilizer shares gained on buzz of GoM plans to take up urea pricing today. A group of ministers (GoM) headed by agriculture minister Sharad Pawar is likely to meet, to discuss a new urea pricing policy for existing producers of the fertilizers.  Coromandel International, Chambal Fertilisers & Chemicals, Rashtriya Chemicals and Fertilisers all rallied in the range of 0.50-2.50%. Meanwhile, in scrip-wise activity, Just Dial and Goodyear India stocks showed strong performance. While, Just Dial soared 14% in its debut today, Good Year India surged 19.99% and got locked at its upper circuit limit on the promoter’s delisting plans. On the flip side, stocks from Information Technology, Consumer Durable and Capital Goods counter limited the uptrend of the bourses. Additionally, Cement makers stocks, viz Ambuja Cements, ACC and UltraTech Cement, also fell as early arrival of monsoon rains is seen likely to hurt construction activity in the coming months.

The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 1083: 1256, while 149 scrips remained unchanged. (Provisional)

The BSE Sensex gained 18.72 points or 0.10% to settle at 19,564.50.The index touched a high and a low of 19,604.43 and 19,441.35 respectively. Among the 30-share Sensex pack, 18 stocks gained, while rest 12 declined. (Provisional)

The BSE Mid cap and Small cap indices ended higher by 0.12% and 0.16% respectively. (Provisional) On the BSE Sectoral front, Oil & Gas up by 1.76%, Realty up by 1.17%, Metal up by 0.52%, PSU up by 0.46% and Auto up by 0.33%, were the only gainers, while IT down by 0.79%, Teck down by 0.60%, FMCG down by 0.47% and Consumer Durables down by 0.43%, were the only losers in the space. (Provisional)

The top gainers on the Sensex were RIL up by 2.56%, ONGC up by 1.95%, Sun Pharma up by 1.91%, Hindalco Industries up by 1.34% and Maruti Suzuki up by 1.28%, while, Wipro down by 1.59%, Infosys down by 1.32%, HDFC down by 1.23%, ITC down by 0.93% and Bharti Airtel down by 0.69% were the top losers in the index. (Provisional)

Meanwhile, pointing to a solid expansion in service sector output, the HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies, came at 53.6 in May, up from 50.7 in April. Indian services activity, which make up nearly 60% of country’ economics output, expanded in May at its fastest pace since February as burgeoning new orders drove optimism to a five-month high.  

Service sector activity picked up pace in May led by higher levels of new work placed at private sector firms in India. Service providers stated that demand was stronger and new products were launched. Unfinished business levels also rose in the service sector, albeit at a much slower pace. Further, services providers also mentioned of delayed payments from clients for the month.

According to the survey, new businesses poured in at a faster pace, which drove the business expectations index to 70.7, its highest since December, from 69.6 for April. However, it did not prompt firms to ramp up hiring as only slight rise in job creation was signaled in service sectors. 

Similarly, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, posted 52.0, up from 50.5 in April, indicating increase in business activity since February, but a rate of growth that remained historically muted.

Further, May data signaled that the overall rate of cost inflation was the weakest since November 2009, while raw material cost for private sector firms rose during the period. Accordingly, private sector firms raised their selling prices to offset increased cost burdens while, the rate of charge inflation was modest and the weakest in 31 months. Furthermore, firms operating in the Indian service sector remained optimistic towards output growth in the short-term. The level of positive sentiment was at a five-month high and services firms expect that better economic conditions combined with increased marketing and the introduction of new services will lead to higher customer numbers.

India VIX, a gauge for markets short term expectation of volatility lost 2.78% at 16.78 from its previous close of 17.26 on Tuesday. (Provisional)

The CNX Nifty gained 7.45 points or 0.13% to settle at 5,926.90. The index touched high and low of 5,935.20 and 5,883.70 respectively. 28 stocks advanced against 22 declining on the index. (Provisional)

The top gainers on the Nifty were Reliance Industries up by 2.79%, DLF up by 2.67%, ONGC up by 1.82%, Hindalco Industries up by 1.78% and Sun Pharmaceuticals was up by 1.69%. On the other hand, Ambuja Cements down by 1.72%, Infosys down by 1.32%, HDFC down by 1.31%, ACC down by 1.24% and HCL Technologies down by 1.06% were the top losers. (Provisional)

The European markets were trading in red; France’s CAC 40 was down by 0.97%, Germany’s DAX was down by 0.37% and the United Kingdom’s FTSE 100 edged lower by 0.89%.