Benchmarks trade with limited losses; IT shares decline

The key equity benchmarks continued to trade with limited losses in mid-morning trade. The Nifty continued to hold above the 18,600 mark. IT shares, however, witnessed some bit of selling pressure for second day in a row.

At 11:29 IST, the barometer index, the S&P BSE Sensex, was down 211.39 points or 0.34% to 62,657.11. The Nifty 50 index lost 59.65 points or 0.32% to 18,636.45.

In the broader market, the S&P BSE Mid-Cap index slipped 0.05% while the S&P BSE Small-Cap index added 0.52%.

The market breadth was strong. On the BSE, 2067 shares rose and 1318 shares fell. A total of 214 shares were unchanged.

Investor sentiment took a hit after November US payrolls report instilled expectations that the US Fed would stick to its rate hike path to combat the high inflation. Nonfarm payrolls climbed more than anticipated by 263,000, while wage growth ran higher despite recessionary pressures ahead.

Meanwhile, oil prices rose sharply on Monday, thanks to relaxations of strict Covid measures in China, while the OPEC kept production steady at its latest meeting.

The Reserve Bank of India (RBI) is all set for its bi-monthly policy review with the Monetary Policy Committee (MPC) meeting starting today. The bi-monthly policy review is expected to come out on 7 December 2022. More than the quantum of rate hikes, domestic investors would watch out for the Central Bank's commentary as it ramps up its efforts to curb inflation and push growth.

On the political front, Gujarat Assembly Elections will be closely watched. The second phase of polling is being held today, 5 December 2022. The first phase of assembly polls in Gujarat was held on 1 December 2022. The results will be declared on 8 December 2022.

Buzzing Index:

The Nifty IT index shed 0.78% to 30,810.65. The index has slipped 0.99% in two sessions.

Persistent Systems (down 2.56%), L&T Technology Services (down 1.36%), LTIMindtree (down 1.34%), Mphasis (down 1.31%) and Tech Mahindra (down 1.01%) were the top losers.

Among the other losers were Tata Consultancy Services (down 0.85%), Infosys (down 0.77%), HCL Technologies (down 0.47%), Coforge (down 0.42%) and Wipro (down 0.36%).

Stocks in Spotlight:

Dilip Buildcon gained 2.42%. The company announced that it has executed a contract agreement with the Gujarat Metro Rail Corporation (GMRC) for Phase-1 of Surat Metro Rail proiect in the state of Gujrat. The cost of project is Rs 702.02 crore. The period of completion of the project is 26 months.

Inox Green Energy Services shed 0.66%. The company reported a net loss of Rs 11.87 crore in Q2 FY23 as against a net loss of Rs 11.58 crore posted in Q1 FY23. Total Income from operations rose 4.3% quarter on quarter (QoQ) to Rs 65.87 crore in Q2 FY23.

Quint Digital Media rose 2.75%. The company announced that its board approved raising Rs 125 crore through right issue of equity shares.

Global Markets:

Asian stocks traded mostly higher on Monday as China relaxed virus testing rules in some cities, signaling more easing may come in the nation, which has been under strict Covid-related restrictions for more than two years.

China's services activity shrank to six-month lows in November as widening COVID containment measures weighed on demand and operations, a private-sector business survey showed on Monday, pointing to a further hit to economic growth.

The Caixin/S&P Global services Purchasing Managers' Index for November came in at 46.7, representing the lowest reading in six months. The print also marks the third consecutive month of contraction in output and new work, after October's reading came in at 48.4, while September's print was 49.3.

The figure echoed weak data in a larger official survey on Wednesday, which showed services activity fell to seven-month lows.

US stocks cut much of their earlier losses Friday as investors looked past hotter-than-expected labor data to the upcoming Federal Reserve meeting.

Job growth was stronger than expected in November despite the Federal Reserve's efforts to cool the labor market. Nonfarm payrolls grew by 263,000 last month while the unemployment rate was unchanged at 3.7%, according to the Labor Department on Friday.

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