DEEP CUT

The Indian equity markets extended early losses and currently trading at the low point of the day on weak inflation numbers and amid concerns about the global economic situations. Benchmark Sensex dropped more than 100 points, while Nifty holding 5,200 mark. Meanwhile, primary articles inflation for week ended October 22 increased at 12.08% versus 11.75%, food articles inflation is at 12.21% versus 11.43%, while fuel group inflation is at 14.5% versus 14.7%. Investors tracking cues from Asian bourses, which remained quite bearish today on lasting uncertainties about the financial situation in Europe following the Greek government seeking a referendum on the bailout package proposed by the European leaders early last week. On sectoral front, information technology, metal and banking stocks were mostly subdued. Automobile, healthcare and oil stocks too were mostly seen struggling for support. Realty and capital goods stocks erased its early gains whereas only power stocks were edged higher. On the global front, Asian markets extended losses on the back of European debt crisis.  Back home, the market breadth favoring the negative trend; there were 1,028 shares on the gaining side against 1,297 shares on the losing side while 130 shares remained unchanged.
The BSE Sensex is currently trading at 17,327.74, down by 137.11 points or 0.79%. The index has touched a high and low of 17,447.32 and 17,322.10 respectively. There were 9 stocks advancing against 21 declines on the index.
The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices down by 0.28% and 0.21% respectively.
The only gaining sector on the BSE was, Power up by 0.33%. On the flip side, Information Technology down by 1.29%, Metal down by 1.14%, Bankex down by 1.09%, TECk down by 0.79% and Consumer Durables (CD) down by 0.70% were the top losers on the index.
The top gainers on the Sensex were BHEL up by 2.28%, Cipla up by 0.73%, Tata Power up by 0.69%, Bharti Airtel up by 0.57% and Maruti Suzuki up by 0.53%.
On the flip side, Sterlite Industries down by 2.11%, HUL down by 2.05%, HDFC Bank down by 2.04%, ONGC down by 1.90% and Tata Steel down by 1.89% were the top losers on the Sensex.
Meanwhile, India's service sector Purchasing Managers' Index (PMI) moderated for the second successive month in October, as new business grew at its slowest pace since May 2009, on the back of slowdown in the global economy and tight monetary policy. The seasonally adjusted HSBC Markit Business Activity Index declined to 49.1 in October from 49.8 in September. October's reading is the lowest reading in last two and half years and below the 50-mark which separates growth from contraction. On the other hand, manufacturing output improved slightly from September's 30-month low. 
Commenting on India services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said, 'the momentum in the services sector eased further in October with business activity declining sequentially and new orders expanding at a slower clip. This reflects the lagged impact of the monetary policy tightening undertaken so far, although partly also reported strike action. By sector, the deceleration was led by financial services, renting and business services, and the broader 'other services' category.
The Reserve Bank of India (RBI), in order to control inflation, increased its key policy rates by 350 basis points or 3.5% since March 2010, which has increased the interest rates hence the cost of capital. However, headline inflation measured by Wholesale Price Index (WPI) has been hovering around two digit mark, for September inflation stood at 9.72% compared to 9.78% in August. 
'On the inflation front, there was some relief with both prices charged and input costs rising less rapidly, although the former are still climbing fast by historical standards. The numbers confirm some re-balancing between growth and inflation risks, supporting RBI's decision to signal a pause in the near term,' Leif Eskesen said.

However, banks have been slow on passing the interest rate increase to borrowers, in a bid to help businesses which is worried that the debt crises in Europe which is one of the important export destination.  However, in spite of slowdown in western economies, the survey showed that Indian service providers were more optimistic regarding coming year than last month as business expectations saw a rebound. 

The S&P CNX Nifty is currently trading at 5,213.55, lower by 44.90 points or 0.85%. The index has touched a high and low of 5,253.25 and 5,211.75 respectively. There were 14 stocks advancing against 36 declines on the index.
The top gainers of the Nifty were BHEL up by 2.36%, GAIL up by 0.73%, PowerGrid up by 0.73%, Tata Power up by 0.69% and Bharti Airtel up by 0.62%.
On the flip side, SAIL down by 2.75%, IDFC down by 2.64%, RPower down by 2.58%, Sterlite Industries down by 2.28% and HDFC Bank down by 2.13%, were the major losers on the index.
Most of the Asian counterparts were trading in the red; Hang Seng down by  1.91%, Jakarta Composite down by 1.17%, KLSE Composite down by 0.65%, Straits Times down by 1.35%, Seoul Composite down by 1.47% and Taiwan Weighted down by 1.82%.
On the other hand, Shanghai Composite up by 0.37% remained the lone gainer among the Asian peers. However, Stock markets in Japan remained closed for trade today in observance of a national holiday.