Benchmarks halve their early gains; slip to day’s low on somber macro-economic data

Benchmarks equity indices, halving their early gains, were trading near day’s low level on the back of disappointing macro-economic data that underpinned profit-booking at higher level in afternoon deals. Sentiment took a hit after India’s factory growth showed no sign of improvement last month, as tepid demand restrained output even as price pressures eased. The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit was at 51.3 in April, similar to the March level. This data came right after output growth of eight core industries, which have a weight of 37.9% in the overall Index of Industrial Production (IIP). , slowed down to 2.5% in the month of March from a year earlier. However, positive regional counterparts sustained the upwards momentum of the markets. Off day’s low, while Sensex was trading below the psychological 22,450, Nifty held above the crucial 6700 mark with gains of over one tenth of a percent. Meanwhile, broader indices too, witnessing selling pressure, akin to frontline indices pared half of their gains and were trading with profit of around half a percent. On the global front, most of the Asian shares were set for positive close on hopes of an upbeat US payrolls report later in the session. The focus of investors, a day after the May Day holiday in Europe except in the United Kingdom, will be on the US non-farm payrolls, which probably advanced by 210,000 jobs in April, up from a gain of 192,000 in March. Closer home, while stocks from Healthcare, Information Technology and realty counters were holding the benchmark’s neck in green, those from Metal, Capital Goods and Auto counters were restricting the gains of markets. Meanwhile, airline stocks, namely Jet Airways, Spicejet and Global Vectra were trading mixed after ATF prices were slashed by 1% after decline in international rates. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1145:689; while 28 shares remained unchanged. The BSE Sensex is currently trading at 22447.98, up by 30.18 points or 0.13% after trading in a range of 22575.62 and 22417.94. There were 16 stocks advancing against 14 stocks declining on the index. The broader indices too pared gains; the BSE Mid cap index was up by 0.42%, while Small cap index was up by 0.69%. The gaining sectoral indices on the BSE were Healthcare up by 0.96%, IT up by 0.92%, Teck up by 0.74% Realty up by 0.70%, and Consumer Durables up by 0.52%. While, Metal down by 1.31%, Capital Goods down by 1.18%, Auto down by 0.32% and Power down by 0.04% were the losing indices on BSE.    The top gainers on the Sensex were Tata Power up by 2.50%, Cipla up by 1.39%, Infosys up by 1.22%, HDFC up by 1.05% and DR Reddy’s Lab up by 0.97%. On the flip side, Hindalco Inds down by 2.67%, Tata Steel down by 2.45%, L&T down by 1.74%, M&M down by 1.52% and Maruti Suzuki down by 1.47%. Meanwhile, marking the second reduction since April, Jet fuel or ATF prices were slashed by 1% on Thursday tracing a decline in international rates. ATF prices were reduced by 4%, or Rs 3,025.34 per kl, on April 1. According to Indian Oil Corporation (IOC) the nation’s largest fuel retailer, the price of aviation turbine fuel (ATF) in Delhi was lowered by Rs 766.34 per kilolitre, or 1%, to Rs71,033.87 per kl, while in Mumbai it costs Rs 73,306.89 per kl as against Rs74,105.16 per kl previously. Rates vary at different airports because of local sales tax or VAT. The price cut is expected to reduce the financial burden of the cash-strapped carriers, since Jet fuel comprises about 50% of airline expenditure. Further, this fall has been complemented by the strengthening of rupee against the dollar in the last couple of months. Despite the fall in fuel prices, especially for the fourth quarter of FY 14, it is unlikely that airlines will come out of the red. According to a Center for Asia Pacific Aviation (CAPA) report, Indian airlines, Air India, Jet Airways and Spice Jet, are expected to post a combined loss of $ 1.2 billion (about R7,500 crore) for FY 2014. The CNX Nifty is currently trading at 6,705.20, up by 8.80 points or 0.13% after trading in a range of 6,737.65 and 6,697.10. There were only 29 stocks advancing against 21 declining on the index. The top gainers of the Nifty were NMDC up by 2.86%, Tata Power up by 2.50%, Lupin up by 2.40%, BPCL up by 2.17% and Ambuja Cements up by 2.05%. On the flip side, Jindal Steel down by 5.58%, Tata Steel down by 2.53%, Hindalco Inds down by 2.49%, Maruti Suzuki down by 1.75% and SSLT down by 1.70% were the major losers on the index. Asian equity indices were trading mixed; Jakarta Composite up by 0.24%, Hang Seng added 0.52% and Taiwan Weighted advanced 0.86%. While, Nikkei 225 and Straits Times down by 0.19% and 0.43% respectively were the only losers amongst Asian pack.