Post Session: Quick Review

Consolidation followed after six straight sessions of record setting rally on Thursday, which led to both Sensex and Nifty end below the psychological 22,600 and 6750 levels respectively, albeit with slender loss of less than one tenth of a percent. Recovery which emerged during the last leg of trade reversed substantial portion of losses, as investors strongly bought into dips. Notably, the loss came a day after Reserve Bank of India (RBI) ended decade long suspense on new banking license by deciding to grant licences to infrastructure financing firm IDFC and microfinance institution Bandhan from among 25 applicants that included corporate heavyweights ADAG Group, Aditya Birla Group and Bajaj Group. Sentiment to some extent turned sour after HSBC Purchasing Managers' Index data showed that Activity in the largest segment of the Indian economy -- services -- failed to pickup in March as contraction continued for the ninth straight month.

However, the session turned out to be less dreadful as appeared in the intra-day trade, where both Sensex and Nifty had slipped below the crucial 22,400 and 6,700 levels respectively and were down and out with loss of more than half of a percent. Nevertheless, recovery of bourses was inspite of mixed global cues.

On the global front, Asian pacific shares ended mostly in green following another record close on Wall Street as US private jobs growth picked up, but Shanghai gave up early gains despite China unveiling a mini stimulus programme on Wednesday, announced a series of spending measures aimed at kickstarting the Chinese economy, a key driver of global growth but one which has shown signs of slowing in recent months. However, European shares edged lower ahead of ECB meeting later in the day and after brief spike in mid-morning as manufacturing and services data indicated that businesses in the region enjoyed the fastest rate of expansion in three years in the first quarter of 2014.

Closer home, benchmarks after getting a brief spike at the start of trade, flip-flopped for rest of the session, finally settling around the neutral line, with a little loss. Most of the sectoral indices on BSE ended in negative territory, while the top gainers were stocks belonging to Healthcare, Fast Moving Consumer Goods and Consumer Durables counters. Additionally, Stocks of pharmaceutical companies extended gains with counters like Wockhardt, Strides Arcolab, Dr Reddy’s Laboratories and Ranbaxy Laboratories rising up in range of 1 -13%. On the flip side, PSU, Capital Goods and Banking counters were the weak spells of trade. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1,288: 1,499, while 129 scrips remained unchanged. (Provisional)

The BSE Sensex lost 20.10 points or 0.09% to settle at 22,531.39. The index touched a high and a low of 22,620.65 and 22,369.28 respectively. Among the 30-share Sensex, 14 stocks gained, while 16 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.39% and 0.13% respectively. (Provisional)

On the BSE Sectoral front, Healthcare up by 1.00%, FMCG up by 0.60%, Consumer Durables up by 0.53%, Metal up by 0.31% and IT up by 0.02% were the only gainers, while PSU down by 1.31%, Bankex down by 1.01%, Capital Goods down by 0.77%, Oil & Gas down by 0.72% and Realty down by 0.47% were the top losers in the space. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 2.33%, Cipla up by 1.85%, Dr Reddys Lab up by 1.57%, ITC up by 0.80% and Sun Pharma up by 0.63%, while, BHEL down by 3.10%, Coal India down by 2.37%, Gail India down by 2.23%, Axis Bank down by 2.22% and SBI down by 1.99% were the top losers in the index. (Provisional)

Meanwhile, contradicting indications of rebound in domestic economic growth, the activity in Indian services sector contracted in March on account of fall in new orders amid fragile economy. The HSBC services Purchasing Managers’ Index (PMI), based on the survey of around 350 private service sector companies, fell to a three-month low of 47.5 in March from 48.8 in February below 50 mark for the ninth successive month that separates growth from contraction.

The HSBC survey highlighted that the activity of Indian services firms declined in the reported month owing to softer domestic demand and prevailing economic instability across the country. New business fell at a faster pace as the sub-index, measuring new orders, declined to 47.6 in March from February's 49.5. The rate of contraction was quickest in three months and services provided highlighted that weaker client demand partly linked to the forthcoming elections, which led to the drop in new work intakes. Indicating contraction in business activity overall, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, declined from 50.3 in February to 48.9 in the month of March.

The survey further indicated that three out of the six monitored sub-sectors registered lower new orders, namely Financial Intermediation, Renting & Business Activities and Transport & Storage. Services firms indicated that the accumulation of work during March has increased due to the cashflow difficulties and delayed payments from clients. However, the inflation pressure has softened during the reported month with both input costs and output prices rising at weaker rates, suggesting some moderation in consumer price inflation in coming months. Services firms hired more staff amid expectation of higher levels of new work in coming months. Indian services companies also maintained their positive outlook for output growth over the coming year on the back of supportive factors such as improved economic conditions and new marketing initiatives. Referring to Indian economy outlook, the survey noted that Indian economic growth is expected to remain subdued in coming months but pick up gradually during the second half of 2014.

India VIX, a gauge for markets short term expectation volatility gained 4.21% at 22.10 from its previous close of 21.21 on Wednesday. (Provisional)

The CNX Nifty lost 16.25 points or 0.24% to settle at 6,736.30. The index touched high and low of 6,776.75 and 6,696.90 respectively. Out of the 50 stocks on the Nifty, 18 ended in the green, while 31 ended in the red and one stock remained unchanged.

The major gainers of the Nifty were Asian Paint up 3.54%, Jindal Steel up by 2.86%, Hindustan Unilever up by 2.59%, Lupin up by 2.23% and Ambuja Cements up by 2.17%.

The key losers were Bank of Baroda down by 3.07%, BHEL down by 3.00%, DLF down by 2.85%, PNB down by 2.48% and IDFC down by 2.43%. (Provisional)

Most of the European markets were trading in red; France’s CAC 40 was down 0.08%, UK’s FTSE 100 was down 0.06% and Germany’s DAX was down by 0.05%.

The Asian markets concluded Thursday’s trade mostly in green with the overnight gains on Wall Street. Several cities in China, including Hangzhou and Changsha, planned to ease restrictions on buying homes and lowering the threshold for second-home buyers. Japan expects the Consumer Price Index to be just 1.5% higher in a year from now, a Bank of Japan tankan survey found, a sign of how difficult the central bank could find meeting its 2% inflation goal by the April 2015 target date. In Hong Kong, the number of sale and purchase agreements for all building units in March was 4,184, up 4.9% from February but down 38.8% year-on-year. The total consideration for sale and purchase agreements in March was $29.4 billion, up 13.3% from February but down 33.8% compared with March 2013.