Benchmarks continue weak trade; Sensex below 22500 mark

Benchmarks added losses to continue their weak trade in the late afternoon session on account of selling in frontline blue chip counters. The sentiments were on negative note after a survey showed that activity in India’s service industry contracted at a faster pace last month as new business fell, although firms hired more staff to meet a small order backlog. Traders were seen piling positions in HealthCare, Consumer Durables and Metal stocks while selling was witnessed in PSU, Capital Goods and Oil & Gas sector stocks. In scrip specific development, Torrent Pharmaceuticals was trading inn green on report that private equity firm ChrysCapital has invested around $40 million in company. Hectic buying activity was witnessed in stocks of pharmaceutical companies with counters like Wockhardt, Strides Arcolab, Dr. Reddy’s Laboratories and Ranbaxy Laboratories moving up between 1-13%.

On the global front, most of the Asian markets were trading in green, while the European markets were trading on mixed note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,750 and 22,500 levels respectively. The market breadth on BSE was negative in the ratio of 1128:1494 while 126 scrips remained unchanged.

The BSE Sensex is currently trading at 22427.18 down by 124.31 points or 0.55% after trading in a range of 22,620.65 and 22384.58. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices too continued to trade lower; the BSE Mid cap index was down by 0.46%, while Small cap index was down by 0.28%.

The gaining sectoral indices on the BSE were HealthCare up by 0.61%, Consumer Durables up by 0.19% and Metal up by 0.14%. On the other hand, PSU down by 1.42%, Capital Goods down by 1.30%, Oil and Gas down by 1.18%, Bankex down by 1.09% and Power down by 0.87% were the losing indices on BSE.   

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.01%, Sun Pharma up by 0.69%, Cipla up by 0.50%, ITC up by 0.35% and Maruti Suzuki up by 0.34%. On the flip side, BHEL down by 3.53%, Coal India down by 2.18%, SBI down by 2.10%, Gail India down by 1.83% and L&T down by 1.53%.

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.

The CNX Nifty is currently trading at 6,715.15, down by 37.40 points or 0.55% after trading in a range of 6,776.75 and 6,702.20. There were 15 stocks advancing against 35 declining on the index.

The top gainers of the Nifty were Jindal Steel up by 2.79%, Asian Paints up by 2.38%, NMDC up by 2.23%, Ambuja Cement up by 2.09% and Dr. Reddy’s lab up by 1.06%. On the flip side, BHEL down by 3.28%, DLF down by 2.60%, PNB down by 2.46%, IndusInd Bank down by 2.18% and SBI down by 2.14% were the major losers on the index.

Asian equity indices were mostly trading in green; Straits Times was up by 0.81%, Jakarta Composite up by 0.21%, Hang Seng up by 0.18% and Nikkei 225 up by 0.84%. While, Taiwan Weighted was down by 0.19% and Shanghai Composite down by 0.74% were the only losers of the index.

The European markets were trading on mixed note; France’s CAC 40 was up 0.03%, Germany’s DAX lost 0.04% and UK’s FTSE 100 gained 0.23%.