Benchmarks make gap-down opening; Nifty slips below 7950 level

With a gap-down opening Indian equity markets have enlarged their previous session losses and are now trading with a cut of more than half a percent, tracking weak trend in the global peers amid persistent China woes. Sentiment remained under pressure on weak economic reports as GDP growth slowed to 7 percent in the April-June quarter, from 7.5 percent in the previous quarter, amid deceleration in farm, services and manufacturing sectors. Also, the index of eight core industries fell again to 1.1 per cent in July compared to 3 per cent in the previous month. Additionally, foreign portfolio investors (FPIs) sold shares worth a net Rs 551.19 crore on 31 August 2015, as per provisional data released by the stock exchanges that too kept pressurizing the markets. In scrip specific development, Dishman Pharmaceuticals & Chemicals surged 5%, extending its previous day’s 6% surge on the BSE, after reporting a strong 59% year-on-year (Y-o-Y) growth in consolidated net profit at Rs 37.76 crore for the quarter ended June 30, 2015 (Q1), on account of lower raw material cost.

On the global front, US markets ended lower on renewed concerns about the Chinese economy. Asian markets were trading mostly in red as losses on Wall Street overnight and new manufacturing data out of the world's second-largest economy curbed risk appetite.

Closer home, most of the sectoral indices on BSE were trading in red, with prominent losers being the stocks from Banking, Capital Goods, Metal and Consumer Durables counters. On the flip side, stocks from IT and TECK, Healthcare counters were the few gainers of the session. The market breadth on BSE was negative in the ratio of 538:105, while 50 scrips remained unchanged. 

The BSE Sensex is currently trading at 26114.24, down by 168.85 points or 0.64% after trading in a range of 25984.28 and 26127.04. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.53%, while Small cap index declined by 0.36%.

The gaining sectoral indices on the BSE were IT up by 0.83%, TECK up by 0.63% and Healthcare up by 0.17%, while Bankex down by 1.43%, Capital Goods down by 0.94%, Metal down by 0.88%, Consumer Durables down by 0.62% and Power down by 0.58% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.32%, Infosys up by 1.25%, Sun Pharma Inds. up by 1.05%, ONGC up by 0.60% and NTPC up by 0.41%. On the flip side, HDFC down by 2.34%, HDFC Bank down by 2.01%, SBI down by 1.58%, Lupin down by 1.39% and Axis Bank down by 1.32% were the top losers.

Meanwhile, showing signs of deceleration, gross domestic product (GDP) growth at market prices (at constant prices), in the April-June 2015 quarter saw growth at 7%, lower than the 7.5% notched up during the previous quarter. The expectation was that growth in GDP would be higher than growth in gross value-added (GVA) , simply because indirect taxes have gone up and subsidies have fallen. In the March quarter, GDP growth at constant prices was well above GVA growth. But at constant prices, GVA growth this time was higher than GDP growth.

As per the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation data, GDP at constant (2011-12) prices in Q1 of 2015-16 is estimated at Rs 27.13 lakh crore, as against Rs 25.35 lakh crore in Q1 of 2014-15, showing a growth rate of 7.0 percent. Quarterly GVA at Basic Price at constant (2011-2012) prices for Q1 of 2015-16 is estimated at Rs 25.80 lakh crore, as against Rs 24.10 lakh crore in Q1 of 2014-15, showing a growth rate of 7.1 per cent over the corresponding quarter of previous year. GDP, which is derived by adding taxes on products net of subsidies on products to GVA at basic prices at current prices in Q1 of 2015-16 is estimated at Rs 32.43 lakh crore, as against Rs 29.80 lakh crore in Q1 of 2014-15, showing a growth rate of 8.8 percent. GVA at Basic Price at current prices in Q1 of 2015-16, is estimated at Rs 30.30 lakh crore, as against Rs 28.28 lakh crore in Q1, 2014-15, showing an increase of 7.1 per cent.

The economic activities which registered growth of over 7 percent in Q1 of 2015-16 over Q1 of 2014-15 are ‘manufacturing’, ‘trade, hotels and transport & communication and services related to broadcasting’ and 'financial, insurance, real estate and professional services'. Industry wise, Quarterly GVA at basic prices for Q1 2015-16 from ‘agriculture, forestry and fishing’ sector grew by 1.9 percent as compared to growth of 2.6 percent in Q1 2014-15. Quarterly GVA from ‘mining and quarrying’ sector grew by 4.0 percent as compared to growth of 4.3 percent in Q1 2014-15. From ‘manufacturing’ sector grew by 7.2 percent as compared to growth of 8.4 percent in Q1 2014-15. From ‘Electricity ,Gas, water supply and other utility services’ sector grew by 3.2 percent as compared to growth of 10.1 percent. From ‘Construction’ sector grew by 6.9 percent as compared to growth of 6.5 percent. From Trade, hotels and Transport & communication and services related to broadcasting Quarterly GVA at basic prices for Q1 2015-16 grew by 12.8 percent as compared to growth of 12.1 percent in Q1 2014-15. From Financial, insurance, real estate and professional services grew by 8.9 percent as compared to growth of 9.3 percent in Q1 2014-15. From Public administration and defence and other services Quarterly GVA at basic prices for Q1 2015-16 from this sector grew by 2.7 percent as compared to growth of 2.8 percent in Q1 2014-15.

On expenditure front, Private Final Consumption Expenditure (PFCE) at current prices is estimated at Rs 19.89 lakh crore in Q1 of 2015-16 as against Rs 18.10 lakh crore in Q1 of 2014-15. At constant (2011-12) prices, the PFCE is estimated at Rs 15.93 lakh crore in Q1 of 2015-16 as against Rs 14.84 lakh crore in Q1 of 2014-15. Government Final Consumption Expenditure (GFCE) at current prices is estimated at Rs 3.86 lakh crore in Q1 of 2015-16 as against Rs 3.71 lakh crore in Q1 of 2014-15. At constant (2011-2012) prices, the GFCE is estimated at Rs 3.10 lakh crore in Q1 of 2015-16 as against Rs 3.06 lakh crore in Q1 of 2014-15.

The CNX Nifty is currently trading at 7911.55, down by 59.75 points or 0.75% after trading in a range of 7886.65 and 7920.20. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 1.44%, Infosys up by 1.35%, TCS up by 1.26%, Sun Pharma Inds. up by 0.81% and ONGC up by 0.81%. On the flip side, Yes Bank down by 2.78%, PNB down by 2.69%, HDFC Bank down by 2.26%, HDFC down by 2.11% and Lupin down by 1.93% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 380.98 points or 2.02% to 18,509.50, Taiwan Weighted decreased 122.58 points or 1.5% to 8,052.34, Hang Seng decreased 112.53 points or 0.52% to 21,558.05, Jakarta Composite decreased 61.82 points or 1.37% to 4,447.79, Shanghai Composite decreased 33.96 points or 1.06% to 3,172.03, KOSPI Index decreased 19.03 points or 0.98% to 1,922.46 and Straits Times decreased 10.94 points or 0.37% to 2,910.50.

On the flip side, FTSE Bursa Malaysia KLCI increased 11.42 points or 0.71% to 1,624.16.