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Market is trading flat with positive bias as losses in capital goods, metals and banking stocks was offset by gains in defensive IT and healthcare stocks.
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 in today's trade after latest numbers data released today indicated that manufacturing activity remained stagnant in April, 2014.
Manufacturing activities remained stagnant in the first month of the current financial year, as per the widely tracked HSBC purchasing managers' index (PMI). PMI stood intact 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.
At 02:30pm, the 30-share BSE Sensex index was trading flat with a negative bias at 22,417 levels and the 50-unit Nifty index of NSE slipped below the key psycological levels of 6700, to trade at 6,697 mark currently.
Infosys up 1.34% Rs 3,219.65, TCS up 1.21% at 2,215.95, HDFC up 1.11% at Rs 907.50, ICICI Bank up 0.82% at Rs 1,255. and ONGC up 1.35% at Rs 330.20, are the top Sensex gainers at this hour.
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."
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.
Asian markets were trading mixed as investors remained cautious ahead of the US jobs data to be released later today. Hang Seng was up 0.5% while Nikkei and Straits Times were down 0.2-0.5% each.
Among BSE indices that track stocks of different industrial sectors, BSE capital goods and metals lost between 1.1-1.4% other than BSE auto that lost 0.6%. Other sectoral indices traded with gains BSE IT, healthcare and consumer durables were up.
Pipavav Defence from the capital goods index lost almost 5% followed by Punj Lloyd, L&T IL&FS transport which shed between 1.6-2% on the BSE.
From It space Mindtree surged 2% to Rs 1449.45 followed by Infosys up 1.3% at Rs 3219.15 and HCL Tech, which was up 1.2% at Rs 1421.20.
Pharma shares firmed up on defensive buying. Sun Pharma, Dr Reddy's Labs, Cipla were up 1% each.
Reliance Ind which had firmed up in early trades witnessed profit taking and was down 0.1%.
In the capital goods space, both L&T and BHEL were down 1% after dismal factory growth in April.
Four-wheeler majors Maruti and M&M were down 1.1-1.4% 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 0.6-0.7% each, outperforming the benchmark Sensex's 0.1% upmove .
Market breadth was strong with 1,291 gainers and 921 losers on the BSE
