Markets recover from the midway fall; Nifty regains 6300 level

Markets have stabilized and are once again moving higher after the jitters of the election schedule announcements, though the benchmarks are still not looking confident, finding stiff resistance near their all time high levels. Traders were a bit cautious as the activity in the services sector contracted for the eighth straight month in February. The HSBC Purchasing Managers' Index (PMI) index rose to 48.8 in February from 48.3 in the previous month, but remained below the 50 mark that separates growth from contraction. Back on street, while most of the sectoral indices were trying to remain in green, the sharp profit booking in the Consumer durable sector was keeping the upside of the markets in check. One non sectoral gauge of road development and infra was buzzing since morning, after the finance ministry cleared the suggestions made by the C Rangarajan Committee, allowing all the projects awarded on premium till yesterday and stuck, to apply for premium reschedule to the National highways Authority of India, which will take it up on a case-to-case basis.

On the global front, barring the Chinese markets all others are in green led by the Japanese Nikkei, as the threat of war in Ukraine receded after Russian President Vladimir Putin said he sees no immediate need to invade eastern Ukraine.

The BSE Sensex is currently trading at 21267.92, up by 58.19 points or 0.27% after trading in a range of 21333.20 and 21176.16. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were outperforming the benchmarks; the BSE Mid cap index was up by 0.73%, while Small cap index gained 0.28%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.16%, Healthcare up by 0.72%, realty up by 0.66%, Bankex up by 0.65%, IT up by 0.52% and TECK was up by 0.50%. On the other hand, Consumer Durables down by 1.92% and Auto down by 0.33% were the only losing indices on BSE.   

The top gainers on the Sensex were ONGC up by 1.93%, Maruti Suzuki up by 1.93%, Cipla up by 1.61%, ICICI Bank up by 1.54% and Coal India was up by 1.54%. On the flip side, Tata Power down by 2.94%, Bharti Airtel down by 1.51%, M&M down by 1.18%, Tata Motors down by 0.84% and Hero MotoCorp down by 0.81% were the major losers on Sensex.

Meanwhile, showing some signs of recovery and stabilisation, the headline HSBC Services Business Activity Index rose to 48.8 in February from 48.3 in the previous month, though the growth remained below the 50 mark that separates growth from contraction for the eighth month. Incoming new work received by private sector companies showed slight rise and firms passed on higher costs to clients, suggesting further rise in consumer price inflation.

Sector data also indicated that four of the six monitored categories recorded falling business activity, with the fastest decrease noted in Financial Intermediation. Also, February data highlighted an eighth consecutive monthly decline in new business placed with Indian services firms, saying that the pace of reduction eased to the weakest in that sequence and was marginal overall.

Giving some comfort on overall front, the seasonally adjusted HSBC India Composite Output Index posted 50.3 compared to 49.6 in January, indicating a fractional rate of expansion with growth centered on the manufacturing sector.

Staffing levels at service providers were broadly unchanged in February, with the index measuring employment posting only fractionally above the 50.0 no change mark. Payroll numbers at manufacturers rose, albeit marginally. Indian service providers reported higher input prices and the rate of cost inflation was solid, but eased since January and was weaker than the series average. Prices charged by services companies were raised further in February, reflecting sustained increases in costs. However, Indian services companies maintained their positive outlook for output growth over the coming year.

India’s services sector accounts for about 60% of gross domestic product (GDP) and the contraction mood for the eighth month in a row along with signs of continued increase in inflation, suggests that growth will remain subdued in coming months too.

The CNX Nifty is currently trading at 6,313.40, up by 15.45 points or 0.25% after trading in a range of 6,333.90 and 6,287.80. There were 29 stocks advancing against 21 declining ones on the index.

The top gainers of the Nifty were Bank of Baroda up by 2.95%, Maruti Suzuki up by 2.05%, BPCL up by 1.74%, IDFC up by 1.71% and ONGC was up by 1.71%. On the flip side, Tata Motors down by 2.94%, JP Associates down by 1.75%, HCL Tech down by 1.62%, Jindal Steel down by 1.37% and Bharti Airtel was down by 1.37% were the major losers on the index.

Asian indices were in green barring the Chinese market; Shanghai Composite declined by 0.92% and Hang Seng lost 0.32%.On the other hand, Jakarta Composite inched higher by 1.21%, KLSE Composite added 0.21%, Nikkei 225 surged by 1.20%, Straits Times gained 0.31%, Seoul Composite was up by 0.88% and Taiwan Weighted advanced 0.92%.