SOMBER MOOD

Indian stock markets prolonged the miserable run in Thursday afternoon trades as the benchmark equity indices continued to reel under severe selling pressure with large cuts of over a percentage points. Sentiments remained pessimistic since the start of trade as investors lacked conviction to open fresh positions amid increasing uncertainty over the outlook. In addition, the weak manufacturing PMI data which indicated that factory activity slowed in February from the previous month when it had accelerated at its fastest pace in eight months, weighed on investors' mood. Meanwhile, stocks like SAIL Neyveli Lingnite, Coal India, NMDC, Oil India, NTPC saw some recovery in the session after reports that Cabinet has given its nod to the share buyback proposal of public sector companies. Besides, a group of ministers on coal, headed by Finance Minister Pranab Mukherjee, held meeting to decide the fate of eight coal blocks linked to power plants of major companies including Reliance Power, Adani Power, Aditya Birla Group and Essar Energy, among others. Market's mood also remained weak as sentiments also remained influenced by pessimistic global cues. Apart from the overnight decline in US markets after Fed Chairman's comments, markets in Asia too drifted lower despite the encouraging Chinese and Taiwanese manufacturing PMI reports which indicated that factory activity expanded in February. European stock futures too are indicating a lower opening for the markets there as investors awaited the release of Euro-zone manufacturing PMI data.

Moreover, the broader markets after showing some resilience slipped into the negative terrain and traded with marginal losses but outperformed their larger peers. The bourses plunged on good volumes while market breadth on BSE was in favor of declines in the ratio of 1370:1116 while 126 scrips remained unchanged.

The BSE Sensex is currently trading at 17,568.08 down by 184.60 points or 1.04% after trading as high as 17,717.53 and as low as 17,513.76. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading on a negative note; the BSE Mid cap index declined 0.25% and Small cap eased 0.15%.

On the BSE sectoral space, Healthcare up 0.30% and PSU up 0.07%, were the only gainers while Realty down 2.30%, Capital Goods down 1.93%, Bankex down 1.52%, Consumer Durables down 1.44% and Oil & Gas down 1.06% were the major losers in the space.

Maruti up 3.90%, Coal India up 1.19%, Sun Pharma up 0.91%, Hero Moto up 0.82% and Tata Power up 0.74% were the major gainers on the Sensex, while DLF down 3.56%, BHEL down 2.89%, ICICI Bank down 2.30%, L&T down 2.30% and Wipro down 2.11% were the major losers in the index.

Meanwhile, HSBC Purchasing Managers' Index (PMI), prepared by Markit, showed a firm trend in new orders for the manufacturing sector signaling a marked improvement in business conditions.  Though, as per the data, the seasonally adjusted HSBC Purchasing Managers' Index slowed a bit in February to 56.6 from 57.5 in January, however Indian manufacturers reported a substantial increase in new business during February and improvement in overall business conditions. As per the seasonally adjusted HSBC Purchasing Managers' Index, the 50 mark separates growth from contraction and India has held above it for the past three years, showing continued strength. A rise in new export business too was recorded for the fourth successive month, although the increase weakened since January.

However, the data signaled a reduction of employment in the Indian manufacturing sector, adding pressure on operating capacity. The lack of suitable labour to fill vacant positions had led to the fall in staffing levels. Although purchasing activity strengthened in February, in line with a faster expansion of new orders, input prices continued to rise. As a result output price inflation accelerated to the fastest since March 2011.

The PMI data has came in contrast with the official data which points to a prolonged slowdown in the manufacturing sector as the government announced Index of Industrial Production (IIP) showed factory activity slowing down sharply in December, which impacted the Indian economic growth in the third quarter, coming at a slower-than-expected 6.1%, slowest in last three years.

The S&P CNX Nifty is currently trading at 5,330.30, lower by 54.90 points or 1.02% after trading as high as 5,372.45 and as low as 5,310.30. There were 15 stocks advancing against 35 declines on the index.

The top gainers on the Nifty were Maruti up 4.16%, R Infra up 1.63%, R Power up 1.26%, Cairn India up 1.14% and Hero Moto up 0.88%.

DLF down 3.60%, BHEL down 2.78%, L&T down 2.72%, ICICI Bank down 2.37% and Bajaj Auto down 2.19% were the major losers on the index.

In the Asian space, Shanghai Composite down 0.19%, Hang Seng plunged 1.14%, Jakarta Composite declined 0.54%, Nikkei 225 inched eased 0.16%, Straits Times sank 0.50%, and Taiwan Weighted inched down 0.04%.

On the other hand only KLSE Composite gained 0.26%.

Stock markets in South Korea remained closed on Thursday on account of Independence (Declaration) Day holiday