Nifty hovers below 7,900; BSE Small-cap index up 0.5%

Broader markets continue to outperform with BSE Midcap and Smallcap indices up between 0.3%-0.6%

Benchmark shares indices continued to trade in a narrow range in late morning deals with Sensex and Nifty swinging between negative and positive zone.

At 11:30 am, the S&P BSE Sensex was down 20 points to quote at 25,560 and the Nifty50 shed 6 points to trade at 7,782.

However, the broader markets continued to outperform the benchmark indices with BSE Mid-cap and Small-cap indices up between 0.3%-0.6%.

"Lately the rupture of the trading support at 7,860 saw Nifty synchronizing with the medium term trend. As the medium term trend remains weak momentum could accelerate below 7,700 while the upside remains capped around 8,000 for the ongoing week, pullbacks could be utilized to create shorts," says Motilal Oswal Securities in a market outlook report.

The report further adds, "Large additions 7,500 makes it the heaviest strike, failure to sustain 7,800 could push Nifty towards the same. On the higher side recent writing pushes the immediate hurdle on the down to 8,000.”

Besides, growth in India's services firms rose at its fastest pace in 10 months in December as demand picked up, a business survey showed today.

The Nikkei/Markit Services Purchasing Managers' Index (PMI) surged to 53.6 in December from November's 50.1, marking a sixth month above the 50-level that separates growth from contraction.

In the currency front, the rupee pared its initial losses but was still down by 10 paise at 66.70 against the American currency in late-morning deals on sustained bouts of dollar demand from importers amid volatile equities..

Among overseas markets, Asian stocks fell on Wednesday as Beijing continued guiding the yuan lower and a survey pointed to weakness in China's services sector, while the Japanese yen drew support from risk aversion.

Talk of a possible nuclear test in North Korea further soured sentiment in Asia. South Korea's KOSPI and the won both lost about 0.6%. MSCI's broadest index of Asia-Pacific shares outside Japan lost 1%. Australian shares lost 1.3%. Japan's Nikkei dropped 1.1%.

Back home, Reliance Inds, Bharti Airtel, GAIL, Cipla and HDFC Bank are the top five Sensex gainers, all surging between 1%-3%.

Telecom stocks like Bharti Airtel, RCom and Idea Cellular are trading nearly 1% higher each as the Delhi High Court is likely to pronounce its order on compensation for call drops later today. The Telecom Regulatory Authority of India (Trai) has asked operators to pay a compensation of Re one for every call drop, maximum three calls per day per mobile user, starting January 1.

On the losing side, ITC, ICICI Bank, Tata Steel, Tata Motors and Sun Pharma are down 1%-2%.

Metal stocks are weak after a monthly survey pointed to weakness in China's services sector.

Tata Motors is down over 1%. Jaguar Land Rover (JLR) said its US sales rose 30% to 9,638 units in December 2015 over December 2014. Land Rover sales rose 47% to 8,441 units in December 2015 over December 2014. Jaguar sales fell 29% to 1,197 units in December 2015 over December 2014.

SMART MOVERS

Narayana Hrudayalaya listed today at Rs 291, a 16% premium against its issue price of Rs 250 per share on the National Stock Exchange (NSE) and BSE.

Shares of Sanghvi Forging and Engineering were up over 7% at Rs 66 after the company said it has received fresh orders from the oil & gas and power sectors.

Premier Explosives has surged 15% to Rs 475 on the BSE after the company announced that it has signed, a Memorandum of Understanding (MOU) with Israel Aerospace Industries Limited for exploring potential business opportunities.

Shares of Bharati Shipyard has locked in upper circuit for fourth straight trading sessions, up 5% at Rs 33.85 on the BSE ahead of board meeting tomorrow to consider issue of convertible warrants to non-promoters on preferential basis.