Domestic bourses trim gains on weak service PMI

Indian equity benchmarks have trimmed their gains in the noon deals as sentiments got dented after India’s services PMI contracted first time in 20 months to 47.9 points in July from 51.7 points in the previous month. A reading above 50 points indicates growth, while that below 50 signifies a contraction in the sector. Moreover, last week, Manufacturing PMI managed to stay afloat the growth line as it fell to 50.1 points in July from 50.3 points in June. Consequently, the Composite PMI - considering both manufacturing and services - also contracted to 48.4 points in July from 50.9 points in June this year. Though, the frontline gauges managed to trade into fine fettle as some support came in from report that the Finance Ministry is likely to finalize Rs 14,000-crore capital infusion for public sector banks by the end of this month to meet their global capital requirement norms, Basel III.

Firm opening in European markets too supported the sentiments with all major indices CAC, DAX and FTSE trading in the green at this point of time. Asian markets too were trading mostly in the green with Shanghai Composite leading the pack, garnering a gain of over a percentage points. Back home, metal and mining stocks gained after as China’s service industries showed the first pick-up in growth since March. Sentiments were further boosted with report that foreign institutional investors (FIIs) bought shares worth a net Rs 283.79 crore on August 2, 2013.

On the sectoral front, BSE Metal and FMCG indices have surged by nearly 2 percent. However, BSE Capital Goods index has declined by nearly over 3 percent followed by counters like Power, Consumer Durables and Auto, all falling down between 0.50-2.50 percent. The broader markets, however, were struggling to get some traction. The overall market breadth BSE is in the favour of declines which have thumped advances in the ratio of 1056: 884; while 102 shares remained unchanged.

The BSE Sensex is currently trading at 19234.82 up by 70.80 points or 0.37% after trading in a range of 19306.51 and 19141.68. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.38%, while Small cap index gained 0.05%.

The top gaining sectoral indices on the BSE were, Metal up by 2.15%, FMCG up by 1.66%, IT up by 0.96%, Teck up by 0.72% and Oil & Gas up by 0.53%, while, Capital Goods down by 3.36%, Power down by 2.07%, Consumer Durable down by 0.67%, Auto down by 0.48% and Realty down by 0.15%were the top losers indices on the BSE.

The top gainers on the Sensex were Coal India up by 5.19%, Sterlite Industries up by 4.29%, Jindal Steel up by 3.24%, NTPC up by 2.42% and ITC up by 2.30%. On the flip side, BHEL down by 17.77%, Tata Motors down by 2.44%, Tata Power down by 2.07%, HDFC Bank down by 1.93% and Cipla down by 1.59% were the top losers on the Sensex.

Meanwhile, in order to enhance innovation and technology development for the Indian industry, the government will increase the research and development budget up to 2 per cent of the gross domestic product (GDP) during the 12th Five Year Plan (2012-17). The Government has introduced several new schemes with public private partnerships, which will help translate the basic and academic research into products of direct relevance to the industry in quick time.

Union Minister for Science and Technology S Jaipal Reddy emphasized that the government would ensure necessary resources to support good research and technology proposals and said that Indian industry has contributed to about 50 per cent of the increase in R&D spending.

Further, to increase spending on R&D, it has also lined up several programmes to encourage entrepreneurship and innovation in new scientific concepts and technologies ranging from venture-capital funding to the development of incubation centres. 

Recently, Union Minister inaugurated a Cancer Therapeutic Research Laboratory and a Meteorological Tower of Climate Change on Ventor Control Programme and also laid the foundation stone for Centre of Flurochemicals which is aimed at working on basic and applied research to develop eco-friendly processes for refrigeration.

The CNX Nifty is currently trading at 5,694.55, up by 16.65 points or 0.29% after trading in a range of 5,721.00 and 5,661.50. There were 30 stocks advancing against 20 declines on the index.

The top gainers of the Nifty were Coal India up by 5.18%, Sesa Goa up by 4.56%, Jindal Steel up by 3.18%, JP Associate up by 2.53% and Ambuja Cements up by 2.45%. On the flip side, BHEL down by 17.19%, Asian paints down by 3.71%, BPCL down by 2.64%, Tata Motors down by 2.46% and Tata Power down by 2.25% were the major losers on the index.

The Asian equity indices were trading mostly in the green; Shanghai Composite up by 0.88%, Hang Seng up by 0.16%, Jakarta Composite up by 0.36%, Taiwan Weighted was up by 0.48%, KLSE Composite up by 0.27%. While, Straits Times down by 0.66%, KOSPI Composite down by 0.37% and Nikkei 225 was down by 1.44%.

European markets got off to a positive start; with CAC 40 adding 0.16%, DAX rising by 0.12% and FTSE 100 gaining 0.14%.