Post Session: Quick Review

Indian markets once again went through a very volatile session of trade on Monday, with benchmark indices making a positive start and dipping in red for couple of times, though the stint in red were quiet short and markets bounced back supported by short covering. The mostly positive global cues came to an aid of the markets, with majority of the regional peers ending in green, while the green start of the European indices too supported in the latter trade. On the domestic front, though there was a shocker from the economy front, as the Services PMI slipped to the contraction zone after remaining above the threshold for last 20 month, but the strength in rupee helped the marketmen digest the report.  

On the global front, majority of the Asian markets ended in green, Shanghai composite surged by over a percent on getting good Services PMI data, while the Nikkei lost over a percent as yen strengthened against the US dollar. The major European markets too made a positive start extending their winning streak for the sixth day, as the Euro-area services output shrank at a slower pace than initially estimated in July.   

Back home, the market mood remained cautious, as India's services sector output in July contracted for the first time since October 2011 after new orders declined amid weak economic conditions. HSBC Services Business Activity Index registered below the 50.0 no-change mark to 47.9 in July, down from 51.7 in June. Composite PMI of both manufacturers and service providers, also contracted to 48.4 points in July from 50.9 points in June this year, showing moderate contraction overall. Markets also seemed concerned about the political developments with the start of the Monsoon session covering key reform Bills like opening up the insurance and pension sector, though the Prime Minister Manmohan Singh appealed to the opposition to cooperate in smooth functioning of Parliament but upper and lower house both were adjourned  amid uproar over Telangana, Bodoland issues. There were some important result announcements that too impacted the market movement for the day, with many important names disappointing the street. Coal India registered a fall of 16.52% in its net profit at Rs 3731.04 crore for the quarter ended June 30, 2013 as compared to Rs 4469.26 crore for the same quarter in the previous year. Tata Chemicals registered a fall of 30.10% in its net profit at Rs 75.21 crore for the second quarter ended June 30, 2013 as compared to Rs 107.59 crore for the same quarter in the previous year. OBC too reported 10% fall in its Q1 net profits, while on the positive side Divi’s Laboratories posted a rise of 4.38% in its net profit at Rs 174.71 crore. Finally, the markets made a flat but positive close of the day, supported by metal and IT sector stocks, while the capital goods and power sector were the laggards. Broader markets outperformed their larger peers with gains of over a quarter percent on BSE.

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1084:1123, while 132 scrips remained unchanged. (Provisional)

The BSE Sensex gained 18.24 points or 0.10% to settle at 19182.26.The index touched a high and a low of 19306.51 and 19141.68 respectively.  The BSE Mid cap index ended higher by 0.27% and Small cap index ended lower by 0.30%. (Provisional)

On the BSE Sectoral front, Metal up by 2.67%, Bankex up by 0.97%, IT up by 0.90%, PSU up by 0.61% and FMCG up by 0.58% were the top gainers, while Capital Goods down by 3.58%, Powerdown by 1.02%, Consumer Durables down by 0.72%, Health Care down by 0.48% and Auto down by 0.45% were the only losers in the space. (Provisional)

Out of the 30 stocks on the Sensex, 17 settled higher, while 13 stocks settled lower. The top gainers on the Sensex were Jindal Steel up by 8.35%, Sterlite Industries up by 4.70%, Coal India up by 4.03%, NTPC up by 3.54% and Hero MotoCorp up by 3.41%. On the flip side,  BHEL down by 19.41%, Bajaj Auto down by 2.31%, L&T was down by 2.19%, Bharti Airtel was down by 2.05% and Tata Power was down by 1.54% were the top losers on the Sensex. (Provisional)

Meanwhile, diminishing hopes for a growth recovery in Asia’s third largest economy, services sector, which make up nearly 60% of country’ economics output, fell dramatically during July on account of decline in new businesses amid subdued economic backdrop. The HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies fell to 47.9 in July from 51.7 in the previous month. It is first time since October 2011, the service PMI slid below the 50 mark that divides growth from contraction and the lowest since April 2009. The survey indicated that the Transport & Storage and Renting & Business Activities sub-sectors were the main drivers of the overall decline.   

Slowdown in service sector activity on account of decline in new business orders also made services firms less optimistic about the year ahead. A sub-index for the Indian PMI that measures new business fell to 47.8 in July from 51.9 in June amid reports of an increasingly fragile economy. Similarly, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, also came down to 48.4 from 50.9 in June, indicating moderate contraction overall.

Further, July data signaled broadly a steady inflation reading even as input prices continuing the trend that started in April 2009, rose during July. Subsequently, services companies increased their selling prices. However, the rate of increase in average selling prices was slower at service providers in the current 33-month inflationary sequence.

India VIX, a gauge for markets short term expectation of marignally lost 0.43% at 20.80 from its previous close of 20.89 on Friday. (Provisional)

The CNX Nifty gained 4.75 points or 0.08% to settle at 5,682.65. The index touched high and low of 5,721.00 and 5,661.50 respectively. Out of the 50 stocks on the Nifty, 31 ended in the green, while 18 ended in the red and one stock remains unchanged.

The major gainers were Jindal Steel up 8.48%, JP Associate up by 5.56%, Ambuja Cements up by 5.05%, Sesa Goa up by 4.92% and Reliance Infrastructure up by 4.23%. The key losers were BHEL down by 19.65%, Asian Paints down by 4.86%, BPCL down by 2.71%, Bharti Airtel down by 2.40% and Bajaj Auto down by 2.11%.(Provisional)

Most of the European markets were trading in green with, France’s CAC 40 up by 0.33% and Germany’s DAX up by 0.17%, while the United Kingdom’s FTSE 100 down by 0.32%.

The Asian markets concluded the Monday’s trade mostly in green; Japanese stocks retreated as several financial and technology firms pulled back from strong recent advances, while mainland Chinese shares edged higher after data showed an improvement in services-sector activity in the country. A privately compiled gauge of China’s services sector remained unchanged in July, showing modest growth. The HSBC China Services Business Activity Index printed at 51.3 for the second month in a row, above the 50 mark signaling growth though at a level HSBC called historically weak. Besides, China Federation of Logistics and Purchasing reported that China’s official non-manufacturing Purchasing Managers’ Index, a gauge of business activity in the service sector, rose in July to 54.1 from 53.9 in June. The upbeat data came after figures released earlier indicating a surprising expansion in manufacturing activity, adding to signs that growth in the world’s second-largest economy is stabilizing.

Indonesia’s economy in the second quarter expanded at the slowest pace in almost three years, compounding concerns on the Southeast Asian nation as investments ease, inflation accelerates and the currency slumps. Gross domestic product rose 5.81% in the April-June period from a year earlier, the Central Statistics Agency (BPS) reported. GDP hasn’t been that slow since the 5.8% expansion rate in the third quarter of 2010. Private consumption growth slowed slightly to 5.06%, which was lower than the first quarter’s 5.17%.

South Korea’s worst property-market slowdown since 2004 threatens to limit the economy’s rebound, as the government’s stop-go policies to stimulate the housing market fail to secure any sustained revival. Indonesia's Jakarta Composite is closed for a week till August 9 on account of Public Holiday 'Id-ul-Fitr'.