April PMI, US Jobs report, Ukraine halt markets
Markets concluded Friday's rangebound trades by registering marginal losses as sentiment turned sombre after data released today showed that manufacturing activity remained stagnant in April in world's third biggest economy.
It was a fifth consecutive session of weak closes as market consolidates ahead of poll results slated to be released on May 16.
Investors also remained cautious over escalating tensions in Ukraine and the looming US April jobs report, slated to be released later.
Key indices remained choppy in a narrow range during the day, swinging between gains and losses. Investors turned defensive and lapped up information technology and healthcare stocks due to factors states earlier.
The 30-share Bombay Stock Exchange (BSE) Sensex closed 14 points lower at 22,404 levels while 50-unit Nifty index of the National Stock Exchange (NSE) shed 2 points to close at 6,694 levels.
Gains in Infosys, TCS, HDFC, ICICI Bank and ONGC were offset by heavy losses in Larsen & Toubro, Reliance Industries, State Bank of India, Tata Steel and Sesa Sterlite.
Sharing his views on key strategies and market technicals, Nitin Murarka-Head-Derivatives at SMC Global, said, "Nifty has strong support in the range of 6650 to 6700 levels.
"We are also seeing open interest is building up in 6800 call options. "Looking at election results on 16 May 6800 call option can be bought. Friday data indicates that short positions were getting covered. Hence there are fair chances of market going up towards 7000 levels. "I would recommend buying Nifty Futures with the target of 7000 and stop loss should be placed around 6650 spot level. Even 6800 or 6900 calls can also be bought.
Fundamentally, manufacturing activity remained stagnant in the first month of the current financial year, according to HSBC purchasing managers' index (PMI). PMI stayed put at 51.3 points in April, same as March.
A reading above 50 denotes expansion and the one below implies contraction.
Both manufacturing output and new order growth eased further in the month, even as factories across the country continued to report improving operating conditions, said Markit Economics, a financial information firm which compiles the data.
Globally stocks remained lackluster as investors remained wary of the US April nonfarm payrolls report slated to released late Friday.
Economists forecasted jobs growth of 210,000 and a fall in the unemployment rate to 6.6%.
Meanwhile a reuters poll predicted that hiring in the world's largest economy increased at its quickest pace in five months in April.
This would bolster hopes of a strong rebound in economic activity in the second quarter. While, first quarter growth estimates are likely to be cut owing to weak construction data released Thursday, which could mean that US economy contracted in the first quarter.
Also, escalating violence in eastern Ukraine between warring pro-Russian seperatists and government forces, weighed on the sentiment.
London-based FTSE was up 0.1% at 1009.93 points and Germany's DAX was down 0.1% at 9602 points and France's CAC 40 was down marginally at 4472.
In Asia, the MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4%.
China's markets were closed on Friday.
Asian markets remained mixed; Hang Seng was up 0.5% while Nikkei and Straits Times were down 0.1-0.3% each.
Back home, in the currency market, the partially convertible rupee was trading higher at 60.20-a-dollar, compared with its previous close of 60.31 on Wednesday, after earlier rising as high as 60.09.
The pressure on the rupee eased after month-end dollar buying by oil companies in recent sessions faded while firm equity markets also helped sentiment.
Among BSE indices that track stocks of different industrial sectors, BSE capital goods and metals lost between 1.4-1.8% while BSE Bankex, FMCG and Auto indices lost between 0.1-0.5%.
Among winners, BSE IT and healthcare were up 1% followed by consumer durables index.
Four-wheeler majors Maruti and M&M were down 1.1-1.6% each on weak April sales.
The company reported 11.4% year-on-year (yoy) decline in volumes at 86,196 units during the month of April, against 97,302 units, led by weakness in domestic sales.
The domestic sales declined 12.6% yoy as the company witnessed slowdown across all the segments post the seasonally strong month of March.
M&M reported 11% decline in total tractor sales at 20,731 units in April.
The company had sold 23,202 units in the same month last year, Mahindra & Mahindra said in a statement.
Among other shares, Fulford India is locked in upper circuit for fourth day in a row, up 10% at Rs 1,195 on the BSE, after its promoter Dashtag has made voluntary delisting offer at an indicative price of Rs 1,150.
The pharmaceutical stock has rallied 74% in past four trading sessions from Rs 686 on April 25, after the company made announcement after market hours.
In the broader market, the BSE Mid-cap and Small-cap indices were up 0.4-0.5% each, outperforming the benchmark Sensex.
Market breadth was strong with 1,291 gainers and 921 losers on the BSE.
Image: Bombay Stock Exchange.