Key benchmark indices languished in negative terrain in afternoon trade as private survey showed that India's services activity slumped in July. At 13:24 IST, the barometer index, the S&P BSE Sensex, was down 166.52 points or 0.51% at 32,310.22. The Nifty 50 index declined 44.75 points or 0.44% at 10,036.75. Weakness in global stocks also weighed on sentiment.
Indices opened higher but soon slipped into the red in early trade on weak Asian stocks. Stocks languished in the red after extending losses in morning trade after private survey showed that India's services activity slumped in July.
The S&P BSE Mid-Cap index rose 0.16%, outperforming the Sensex. The S&P BSE Small-Cap index shed 0.3%. The decline in this index was lower than the Sensex's fall in percentage terms.
The breadth, indicating the overall health of the market, was weak. On the BSE, 1,533 shares fell and 950 shares rose. A total of 130 shares were unchanged.
Realty stocks were mixed. Prestige Estates Projects (up 0.83%), DLF (up 0.8%), Indiabulls Real Estate (up 0.61%), Oberoi Realty (up 0.37%) and Sobha (up 0.08%) gained. D B Realty (down 3.66%), Unitech (down 2.8%), HDIL (down 1.05%) and Godrej Properties (down 0.64%) declined.
Aviation stocks edged higher. Jet Airways (India) (up 0.77%) and InterGlobe Aviation (up 0.18%) gained. SpiceJet (down 0.17%) declined.
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Navin Fluorine International lost 3.19% at Rs 733.80, with the stock sliding on profit booking after recent rally. Shares of Navin Fluorine International had rallied 20.58% in the preceding six trading sessions to settle at Rs 758 yesterday, 2 August 2017, from its close of Rs 628.65 on 25 July 2017.
On the macro front, Markit Economics said today, 3 August 2017, business conditions in India's service economy deteriorated markedly in July following the implementation of the goods and services tax (GST). Output and new work declined for the first time since January, with rates of reduction the quickest since September 2013. This had an adverse effect on the labour market, with employment contracting over the month.
The seasonally adjusted Nikkei India Services PMI Business Activity Index plunged from June's eight-month high of 53.1 to 45.9 in July, its lowest level since September 2013. The headline figure signalled the first downturn in output since the start of the year, and one that was marked. The seasonally adjusted Nikkei India Composite PMI Output Index fell sharply from 52.7 in June to 46.
Overseas, European stocks edged lower in early trade as investors monitored further earnings reports.
Asian stocks declined after surging to the highest level in almost 10 years, with investors assessing the strength of company earnings before American labor-market data provides the latest clues on the health of global growth. China's services sector expanded at a slightly slower pace in July as new business growth eased, a private business survey showed. The Caixin/Markit services purchasing managers' index (PMI) dropped to 51.5 in July from 51.6 in June.
Japan's services sector expanded at a slower pace in July as new orders eased, a private survey showed. The Markit/Nikkei Japan Services PMI fell to a seasonally adjusted 52 from 53.3 in June.
In US, the Dow Jones Industrials Average broke above the 22,000 threshold for the first time ever yesterday, 2 August 2017, putting the blue-chip index on track for its seventh straight daily risk, though the broader market pulled back on weakness in energy shares. Private sector hiring remained strong in July as employers added 178,000 jobs, ADP reported. ADP revised June's gain to 191,000.
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