The Indian equity indices ended on a flat note with a slightly negative bias at the end of a choppy session, as investors digested monthly auto sales numbers, merchandise trade data and manufacturing PMI report. Investors were also influenced by global data points in the wake of Friday's stellar global rally that was sparked by announcement of measures to quell the eurozone debt crisis.
After opening on a flat note, the Indian indices initially slipped in to red. However, the BSE Sensex and the NSE Nifty managed to rise marginally in the afternoon trade on the back of a rally in the European stocks. Markets across Europe gained after the debt-plagued region's manufacturing PMI data came in ahead of consensus estimate. However, stock indices in Spain and Italy reversed early gains to turn flat.
The Sensex ended at 17,399, down 31 points or 0.2% from the previous close. It had earlier touched a day’s high of 17,486 and a day’s low of 17,363. It opened at 17, 438.
The NSE Nifty settled at 5279, unchanged from Friday's close. It touched a day’s low of 5,263 and day’s high of 5,302.
ITC, Jindal Steel, Hero Motocorp, Tata Motors, Hindustan Unilever, TCS, Bajaj Auto, Power Grid and Cipla were the notable losers on the Sensex and the Nifty today.
ACC, DLF, Grasim, HDFC Bank, Bharti Airtel, JP Associates, Cairn and Sterlite Industries were among the gainers on the Nifty.
The INDIA VIX on NSE fell by 0.4% to close at 19.01. It hit day’s high of 19.70. It hit a low of 18.79.
The market breadth on the BSE was positive, 1807 stocks advanced and 1033 stocks declined.
"A weak southwest monsoon, widening current account gap, high fiscal deficit, sticky inflation, elevated interest rates and policy inertia are some of the major headwinds that the Indian economy is facing right now. The prospects for corporate earnings are also dimming amid a steep slowdown in the domestic economy and a fragile global backdrop. Data on IIP, inflation, corporate results and the RBI's month-end policy meeting will drive the sentiment all through July," said Amar Ambani, Head of Research, IIFL.
"The 19th EU leaders' summit in Brussels yielded a plan for a single financial supervisory mechanism for the debt-strapped region to help stabilize jittery financial markets. But investors remain cautious as details are thin and implementation could be politically challenging," he added.
HSBC's India manufacturing Purchasing Managers'Index (PMI) rose to 55.0 in June, a four-month high, from 54.8 in May. However, input and output costs jumped from May, fueling expectations that the Reserve Bank of India (RBI) was unlikely to cut key interest rates soon.
India's exports fell 4.16% year-on-year to US$25.68bn in May, while imports fell 7.36% year-on-year to US$41.9bn, government data showed on Monday.
May's trade deficit was at US$16.3bn versus US$18.18bn a year ago.
Exports from April to May were flat at US$50.14bn.
In global action, Asian markets were mixed, with the key indices in Japan, South Korea China closing flat while that in Australia ended higher. Markets in Hong Kong were shut for a public holiday today.
China’s manufacturing output expanded at the weakest pace in seven months in June, as overseas orders dropped amid a protracted debt crisis in the eurozone.
China’s Purchasing Managers’ Index (PMI) fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics & Purchasing reported yesterday. That compares with the 49.9 median estimate of economists.
The final reading of HSBC's China manufacturing Purchasing Managers' Index (PMI) for June dropped to 48.2 from 48.4 in May, according to the final result of a survey by HSBC released on Monday.
The print was slightly better than HSBC's preliminary reading of 48.1, but remained below the 50-point level, indicating that business conditions worsened at Chinese factories.
Meanwhile, Japan’s large manufacturers became less pessimistic, as declines in commodity prices lifted profitability, boosting the outlook for the world’s third-biggest economy even as a stronger yen crimps exports.
The Eurozone Purchasing Managers' Index (PMI) for the manufacturing sector stood unchanged at 45.1 in June, signaling that the downturn in the Eurozone manufacturing sector extended to an 11th successive month. It held at its lowest reading since June 2009. The reading was above the flash reading of 44.8.
Britain's manufacturing sector continued to contract in June, but at a slower-than-expected pace, according to the Markit/CIPS purchasing managers' index (PMI). The index rose to 48.6 from a three-year low of 45.9 in May. Economists had forecast a reading of 47.4.
The broader markets left their large-cap counterparts far behind in terms of gains today with the BSE Small-Cap index gaining 1.1% and the BSE Mid-Cap index up 0.9%.
In terms of the sectoral indices, most of them gained under 1%. However, Realty and Consumer Durables index stood out with gains of 2.3% and 1.2% each. Meanwhile, FMCG made the steepest losses, down 2.1% followed by Auto and IT indices.
ACC, DLF, Grasim Inds, HDFC Bank, Bharti Airtel, JP Associates, Cairn India, Sterlite Inds and HCL Tech were among the notable gainers on the Sensex and the Nifty.
Noteworthy losers on both indices were ITC, Jindal Steel, Here MotoCorp, Tata Motors, HUL and TCS.
On the BSE-500 index, Gulf Oil, Shree Ashtavinayak Cine Vision, Pantaloon Retail, Unitech, Dewan Housing Finance, Himachal Futuristic Communications, Adani Enterprises, NMDC and Jubilant Foodworks were the notable gainers.
Onmobile Global, Natco Pharma and TV18 Broadcast were the notable losers.
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