Post Session: Quick Review

Aggressive bears tightened grip at D-street on Wednesday leading the benchmark indices crack close to one and half percent and end the session sub 19,200 (Sensex) and 5,800 psychological levels respectively. Accentuated selling pressure was witnessed mainly on account of Rupee’s weakness and sluggish global cues. Investors remained concerned with the weak macro-economic data, which pointed out fresh evidences of Asia's third-largest economy still struggling to come out of a quagmire of low growth and high inflation. On the macro-front, the HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies, fell from May’s three-month high 53.6 to 51.7 in June mainly on account of weaker gains in new work and subdued economic conditions.

In the highly disappointing session of trade the barometer gauges, could not break out in green for once and kept on losing ground to conclude near day’s lowest point. World shares pulled back on Wednesday as signs of slowing Chinese growth and escalating political tensions in Portugal, one of the euro zone's crisis hot-spots, spooked investors. European shares opened sharply lower and euro zone periphery bonds tumbled after two high profile government resignations in two days threatened to plunge Portugal into a political crisis. Meanwhile, in Asia, government data showed that China's services Purchasing Managers' Index (PMI) dropped to 53.9 in June from 54.3 in May.

Closer home, spate of government’s decisions as part of reforms aimed at lifting the economy out of its worst slump in a decade, remained largely ignored by investors, who pressed sales on every small rise. In a bid to revive investments and attract long-term investment as the government strives to contain its widening current account deficit. Back on the street, stocks from Realty, Metal and Public Sector Undertaking counters nursed heavy losses for the session, while those from defensive Fast Moving Consumer Goods and Health Care counters showed resilience.  However, select IT stocks also gained traction after the rupee weakened against the dollar on heavy dollar demand. The market breadth on the BSE remained negative; advances and declining stocks were in a ratio of 803: 1513, while 128 scrips remained unchanged. (Provisional)

The BSE Sensex lost 269.04 points or 1.38% to settle at 19194.78.The index touched a high and a low of 19347.11 and 19147.31 respectively. Among the 30-share Sensex pack, 4 stocks gained, while 26 stocks declined. (Provisional)

Broader indices concluded in red; BSE Mid cap and Small cap indices were down by 1.73% and 1.38% respectively. (Provisional) On the BSE Sectoral front, FMCG up by 0.38% and Health Care up by 0.29% were the only gainers, while Realty down by 4.41%, Metal down by 3.05%, PSU down by 2.95%, Consumer Durables down by 2.68% and Oil & Gas down by 2.67% were the top losers. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 1.45%, Jindal Steel up by 1.40%, ITC up by 0.71% and Coal India up by 0.05%, while, Sterlite Industries down by 4.70%, Tata Steel down by 4.66%, Tata Power down by 4.50%, SBI down by 4.48% and Hindalco Industries down by 3.75% were the top losers in the index. (Provisional)

Meanwhile, in a further sign that Asia's third-largest economy is still struggling to come out of a quagmire of low growth and high inflation, the HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies, fell from May’s three-month high 53.6 to 51.7 in June. 

With services companies registering weaker output growth and manufacturers posting a second consecutive monthly decline, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, also fell from 52.0 in May to 50.9 in June. This was consistent with a marginal rate of expansion, which was the second-weakest in over a year-and-a-half.

Weaker gains in new work and subdued economic conditions mainly led the deceleration in output growth, as per the survey report.  Although, new orders placed at private sector firms in India increased during June, the overall rate of expansion was slight and the weakest in the current 50- month period of growth. While, services companies registered weaker gains in new work, production at manufacturers fell for the first time since March 2009. A sub-index for the Indian PMI that measures new business fell to a 20-month low of 51.9 in June from 53.2 in May, and consequently firms were less optimistic about the future.

Nevertheless, employment increased at faster rates across both the manufacturing and service sectors. Job creation for the private sector overall was moderate, but the quickest in nine months.

On the inflation front, faster rates of inflation were signaled in the Indian private sector during June as Input prices rose at the quickest pace in three months, amid evidence of higher raw material, labour and fuel costs.  The report highlighted that notwithstanding the slowdown, inflation readings firmed on the back of higher labour and raw material prices, with the depreciation of the rupee also cited as a factor.

India VIX, a gauge for markets short term expectation of volatility gained 3.84% at 18.91 from its previous close of 18.21 on Tuesday. (Provisional)

The CNX Nifty lost 80.15 points or 1.37% to settle at 5,777.40. The index touched high and low of 5,815.00 and 5,760.40 respectively. 9 stocks advanced against 41 declining on the index. (Provisional)

The top gainers on the Nifty were Lupin up by 3.87%, Jindal Steel up by 1.40%, Sun Pharmaceuticals up by 1.21%, Ambuja Cements up by 0.80% and ITC up by 0.55%

On the other hand, JP Associate down by 8.38%, Bank of Baroda down by 7.95%, IDFC down by 6.06%, PNB down by 4.94% and Sesa Goa down by 4.70%.

The European markets were trading in red; France’s CAC 40 down by 1.66%, Germany’s DAX down by 1.69% and the United Kingdom’s FTSE 100 down by 1.65%.

Asian Markets concluded the trade on negative note, as concerns over growth in China’s services sector added the selling pressure. A pair of surveys monitoring China’s services sector showed weak growth for June. The government-sponsored version of China’s services Purchasing Managers’ Index fell to 53.9 for June from May’s 54.3, though it remained above the 50 level dividing expansion from contraction. The HSBC/Markit Purchasing Managers’ Index (PMI) for the services industry inched up to 51.3 last month from May’s 51.2, after growth in new orders hit a 55-month low and business confidence slumped to depths last seen in late 2005 when records began. An increasing show of reluctance by top Chinese leaders to take policy steps to stimulate growth has also raised the chance that China's economic down cycle may turn out worse than thought. Besides, an unprecedented cash crunch in China’s financial markets last month, that saw interest rates briefly spike to record highs, may further drag on the economy in coming months.

Japan’s Nikkei closed in red amid choppy trade, as traders appetites were hit by weakness in other Asian shares and worries about the tepid Chinese economy. Hong Kong's market closed with deep cut, accelerating their losses after the Chinese services PMI data. On the economy front, Hong Kong retail sales grew in May by 12.8% from a year earlier, well below April’s 20.7% growth.

Jakarta Composite too suffered deep cuts after World Bank lowered its forecast for economic growth in Indonesia this year due to a slower-than-expected recovery in exports, a weaker outlook for foreign investment and softer commodity prices. The World Bank now expects Southeast Asia’s largest economy to grow 5.9% in 2013, down from its previous forecast of 6.2% in March.