Benchmarks continue to trade in red in afternoon session

Indian equity benchmarks paired all early gains and slipped into the negative territory in afternoon session amid selling witnessed in realty, capital goods and IT stocks. Investor sentiments remained cautious as foreign investors have sold net Rs 3,053 core worth of shares over the last four trading sessions. Further, the activity in India's services sector remained subdued for the seventh straight month at 48.3 in January below 50 mark that separates growth from contraction. However, market losses remained capped as investors piled up positions in metal and consumer durables stocks. Sentiments got some support from Finance Minister P Chidambaram’s statement that the country can grow at a sustained rate of 8-9 percent annually over the next 10-30 years. On stock specific movement, Tata Power, Coal India and Hindustan Unilever were trading up by over 2.00%, while, BHEL, TCS and ICICI Bank were trading down by over 1.40% on BSE.

Bharat Heavy Electricals Limited (BHEL) has dipped more than 3% to around Rs 155 after reporting a sharp 41% y-o-y decline in net profit at Rs 695 crore for Q3FY14. On the other hand, Bank of Baroda has gained a modest 1% to around Rs 546 after reporting earnings for Q3FY14 in-line with market expectations. Jet Airways has surged more than 10% to nearly Rs 234 on reports that the Competition Commission of India (CCI) approved Etihad's 50.1% stake buy in Jet Privilege Private Ltd (JPPL).

On global front, Asian equity indices were trading in green with Seoul Composite up by 0.93% and Nikkei 225 up by 0.03%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,000 and 20,500 levels respectively. The market breadth on BSE was positive, out of 2,104 stocks traded, 1,024stocks advanced, while 957 stocks declined on the BSE.

The BSE Sensex is currently trading at 20,168.78 down by 92.25 points or 0.46% after trading in a range of 20,358.19 and 20,079.82. There were only 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.03%, while Small cap index up by 0.24%.

The gaining sectoral indices on the BSE were Metal up by 0.63%, Consumer Durable up by 0.20%, FMCG up by 0.03% and Healthcare up by 0.02%. While, Realty down by 1.43%, Capital Goods down by 1.07%, IT down by 0.93%, Teck down by 0.63% and Bankex down by 0.50% were the losing indices on BSE.   

The top gainers on the Sensex were Tata Power up by 2.88%, Coal India up by 2.47%, Hindustan Unilever up by 2.02%, Tata Steel up by 1.18% and Wipro up by 1.02%. On the flip side, BHEL down by 3.14%, TCS down by 1.66%, ICICI Bank down by 1.41%, HDFC down by 1.19% and L&T down by 1.16%.

Meanwhile, amid prevailing economic slowdown in the country, the activity in India's services sector, which make up nearly 60% of country’ economics output, remained subdued for the seventh straight month in January owing to the falling new orders amid tough economic conditions and political issues. The HSBC Services Purchasing Managers’ Index (PMI), based on the survey of around 350 private service sector companies, posted a reading at 48.3 in January below 50 mark that separates growth from contraction. Meanwhile, the downturn in Indian services activity eased slightly in the reported month as compared to 46.7 recorded in the previous month, December. Showing a further contraction in business activity overall, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, recorded at 49.6 in January as against 48.1 in December.

The HSBC survey indicated that increased competition for new work, deteriorating confidence among clients and weaker underlying demand were the main reasons for decline in new businesses in the month under review. However, the rate of new order contraction was slight and the slowest in that sequence. Among the five monitored service sectors covered by the survey, Post & Telecommunication was best performing services sector, recording higher output and new business. On the other hand, Financial Intermediation suffered the sharpest declines in both business activity and new orders.

In spite of having lower new orders, service providers hired additional workers in January amid expectations of higher new orders in coming months. The growth is expected on the back of supportive factors such as planned increases in marketing, forecasts of an overall improvement in the Indian economy and stronger demand. Outstanding business in Indian service sector also fell in January. Further, HSBC survey signaled broadly a steady inflation reading with input costs across the private sector rising at three-month high rate in January.

The CNX Nifty is currently trading at 5,988.30 down by 34.10 points or 0.57% after trading in a range of 6,048.35 and 5,995.40. There were only 13 stocks advancing against 37 declining on the index.

The top gainers of the Nifty were Tata Power up by 3.08%, Coal India up by 2.47%, HUL up by 2.11%, NMDC up by 0.93% and Wipro up by 0.92%. On the flip side, BHEL down by 3.36%, JP Associates down by 3.21%, DLF down by 2.17%, TCS down by 1.82% and Kotak Bank down by 1.62% were the major losers on the index.

The Asian equity indices were trading in green; Seoul Composite up by 0.93%, Nikkei 225 up by 0.03%, Straits Times up by 0.72% and KLSE Composite up by 0.20%, Jakarta Composite up by 0.46%, Hang Seng up by 0.17% and Taiwan Weighted up by 0.56%.