Markets continue to trade in red despite slight improvement in Services PMI

Indian markets are not moving much and are trading in a tight range with modest losses. The weak global cues are still weighing on the domestic bourses and traders are waiting for the European markets opening to take cues. Though, the mood remains more or less somber and traders are not paying any heed to the slight improvement in the Services PMI, as it remained below the 50.00 no-change mark for the fifth month running in November. The HSBC Business Activity Index posted 47.2 in November compared to 47.1 in October. Traders are also cautious ahead of the assembly elections outcome on Sunday that will give a firm direction for the markets. Back on street, power, metal and consumer durables have taken the lead, while the fluctuation in rupee has supported the IT and tech stocks. On the other hand capital goods, banking and FMCG were the major losers, restricting the markets to enter the green. The telecom stocks are mostly trading in green after an empowered group of ministers (EGoM) on telecom approved the 'mergers and acquisitions’ (M&A) guidelines.

The market breadth on BSE was positive in the ratio of 1140:1049 while 166 scrips remained unchanged.

The BSE Sensex is currently trading at 20814.10 down by 40.82 points or 0.20% after trading in a range of 20854.57 and 20781.99. There were 13 stocks advancing against  17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.21%, while Small cap index up by 0.65%.

The gaining sectoral indices on the BSE were Power up by 0.92%, Metal up by 0.90%, Consumer Durables up by 0.63%, Teck up by 0.58% and IT up by 0.51%. While, Capital Goods down by 0.77%, Bankex down by 0.56%, FMCG down by 0.50%, Auto down by 0.26% and Oil & Gas down by 0.15% were losing indices on BSE.

The top gainers on the Sensex were Tata Power up by 2.81%, SSLT up by 2.54%, Jindal Steel up by 1.65%, Wipro up by 1.34% and Bharti Airtel up by 1.32%. On the flip side, ICICI Bank down by 1.94%, L&T down by 1.47%, ONGC down by 0.98, Hindustan Unilever down by 0.82% and Hindalco Industries down by 0.77%.

Meanwhile, foreign direct investment (FDI) in India has declined by about 38 percent on y-o-y basis to $2.91 billion in September as compared to $4.47 billion in the same month of previous year. During the April-September period of 2013-14 fiscal, FDI has dipped by 11 percent to $11.37 billion, from $12.84 billion in the corresponding period of last year.

The sectors like services, telecom and metallurgical industries have reported sharp contraction in FDI inflow during the first half of current fiscal. FDI in services, telecom and metallurgical industries declined to $1.32 billion, $32 million and $240 million during April-September this fiscal as compared to $3.04 billion, $43 million and $685 million in the same period of previous year.

FDI is considered crucial for the economic development of a country. Despite the government's various efforts to increase FDI, foreign investments in April-September period of 2013-14 have declined, which reflects the need to take more measures to improve the business environment in the country. Meanwhile, in order to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. The government has relaxed FDI norms in around 12 sectors, which include telecom, tea, pension and petroleum and natural gas. India would require around $1 trillion in the 12th five-year plan (2012-2017), to overhaul its infrastructure sector such as ports, airports and highways to boost growth.

The CNX Nifty is currently trading at 6,193.50 down by 8.35 points or 0.13% after trading in a range of 6,201.95 and 6,180.05. There were 25 stocks advancing against 25 declining on the index.

The top gainers of the Nifty were Tata Power up by 3.06%, JP Associates up by 2.68%, SSLT up by 2.48%, Jindal Steel up by 1.83% and NMDC up by 1.71%. On the flip side, ICICI Bank down by 1.88%, L&T down by 1.43%, Hindalco Industries down by 1.13%, ONGC down by 0.99% and Hidustan Unilever down by 0.92% were the major losers on the index.

Most of the Asian equity indices were trading in red; Nikkei 225 down by 2.17%, Straits Times down by 0.60%, Hang Seng down by 0.65%, Seoul Composite down by 1.12% and Jakarta Composite down by 0.80%, while  Taiwan Weighted up by 0.30%, KLSE Composite up by 0.11% and Shanghai Composite up by 1.31%.