After opening the day in the red, share markets in India witnessed negative trading activity throughout the day and ended the day on a dull note. Losses were seen across most sectors with stocks in the metals sector and stocks in the oil and gas sector, leading the losses.
At the closing bell, the BSE Sensex stood lower by 300 points (down 0.9%) and the NSE Nifty closed down by 100 points (down 1%). The BSE Mid Cap index ended the day down 1%, while the BSE Small Cap index ended the day down by 1.1%.
Asian stock markets finished mixed. As of the most recent closing prices, the Hang Seng was down by 2.2% and the Shanghai Composite was up by 0.1%. The Nikkei 225 was down by 0.7%. Meanwhile, European markets, were trading on a positive note. The FTSE 100 was up by 0.4%, The DAX, was up by 0.7% while the CAC 40 was up by 0.3%.
The rupee was trading at Rs 65.11 against the US$ in the afternoon session. Oil prices were trading at US$ 64.67 at the time of writing.
In news about the economy. India's services sector witnessed contraction in February for the first time since November last year, as rising price pressures led to a decline in new business orders.
India's dominant services industry activity showed signs of weakness as new business continued to suffer. The country's predominant sector witnessed contraction, with new orders falling for the first time since November, according to the Nikkei Services Purchasing Managers' Index (PMI) survey by Markit.
The Services PMI is the reading of the country's services sector output and is updated monthly. A reading above 50 indicates expansion, while any score below the mark denotes contraction.
A marginal rise in new business resulted in monthly increase in activity. The services PMI for February finished at 47.8, from 51.7 in January, and its lowest levels since August 2017.
Services PMI Slumps to Six-Month Low
On the price front, input cost inflation accelerated to the strongest since November, while charges were raised to the greatest extent since July.
Retail inflation rose substantially at an annual pace of 4.8 % in November, above the Reserve Bank of India's medium-term target of 4%.
The data comes as the Reserve Bank of India's (RBI's) Monetary Policy Committee kept interest rates unchanged this month and as minutes of the February RBI meeting released last week showed policymakers were increasingly worried about accelerating inflation.
While retail inflation eased in January from a 17-month high in the prior month, price rises are still above the RBI's medium-term target of 4% on rising energy costs and expectations for an increase in rural spending by the government.
The latest PMI data suggests risks for inflation remain on the upside.
Moving on to news from stocks in the PSU sector. Government owned, BEML share price surged by over 10% in the wee end of today's trading session.
The surge came after various media outlets reported that the government is looking to sell a part of its stake in the company.
Leading financial dailies reported that the government gave in-principle approval to 26% stake sale in BEML. The government holds 54% stake in the firm. In October 2016, the Cabinet had given its in-principle approval to Niti Aayog's proposal for strategic sale in more than a dozen state-owned enterprises, including BEML.
So far, this fiscal, the government has raised Rs 214 billion through disinvestment, which includes buyback offers from marquee firms such as Coal India and NMDC.
Sale of L&T shares held through Specified Undertaking of the Unit Trust of India (SUUTI) had garnered another Rs 20 billion leading to the highest receipts through the share sale process. The government expects to raise Rs 800 billion from PSU disinvestment in this fiscal year, lower than Rs 1 trillion raised in FY17.
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