Post Session: Quick Review

Benchmarks snapped their three straight sessions winning run amid volatile trade as markets witnessed broad based selling in the last hour of trade. Indian equity benchmarks which started the trade on cautious note gradually added gains and were trading in green on reports that manufacturing activity in India rose more-than-expected in the last quarter. India’s manufacturing activity expanded at its fastest pace in 13 months in August, with pickup in demand from domestic and external markets. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 52.6 in August from 51.8 in July. Buying was witnessed by foreign funds and retail investors despite the fact that Indian rupee opened weaker but soon erased most of its losses and was trading with minor change against the US dollar at the Interbank Foreign Exchange market following rising demand of the American currency among banks and importers. Pessimism crept in with report that economic growth slowed to 7.1% in the April-June quarter. India’s economic growth rate slipped to 6-quarter low of 7.1% in April-June, as compared to 7.9% in the previous quarter, mainly due to subdued performance of mining, construction and farm sectors. The economy had expanded at 7.5% in the April-June quarter of last financial year, 2015-16. Also, the Core Sector growth slowed to 3.2% in July, compared to 5.2% recorded in June. However, India Inc expects economy to grow at a healthier pace in coming quarters on the back of a good monsoon even as a pick-up in investments remains elusive. FICCI President Harshvardhan Neotia stated that he expects growth to gain momentum in the second half of the current fiscal year. The good monsoon is a huge positive and an improvement has been noted in the kharif acreage.

On the global front, Asian shares ended mostly in red, as torpid activity in the region’s biggest economies, China and Japan, suggested world demand remained fitful at best even as global policymakers scrambled to restore momentum. An official survey showed, activity in China’s manufacturing sector picked up unexpectedly in August but gains were modest, suggesting the world’s second-largest economy is steadying but still sluggish. European shares mostly rose buoyed by a rally in banks and a recovery by commodity stocks after recent falls.

Back home, selected cement counters were trading under pressure after Competition Commission of India (CCI) imposed more than Rs 6,700 crore penalty on 11 cement companies besides Cement Manufacturers’ Association (CMA) for cartelisation. Penalties of Rs 1,147.59 crore on ACC, Rs 1,163.91 crore on ACL, Rs 167.32 crore on Binani, Rs 274.02 crore on Century, Rs 187.48 crore on India Cements, Rs 128.54 crore on JK Cement, Rs 490.01 crore on Lafarge, Rs 258.63 crore on Ramco, Rs 1,175.49 crore on UltraTech and Rs 1,323.60 crore on Jaiprakash Associates were imposed by CCI. Telecom stock like Bharti Airtel, Reliance Communications and Idea Cellular plunged on RJio’s lower tariff orders. RIL Chairman Mukesh Ambani today announced free voice calling and cheaper data tariffs for Jio customers.

The BSE Sensex ended at 28448.99, down by 3.18 points or 0.01% after trading in a range of 28386.61 and 28548.85. There were 14 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.28%, while Small cap index was down by 0.31%. (Provisional)

The top gaining sectoral indices on the BSE were Auto up by 0.42%, Metal up by 0.41%, FMCG up by 0.38% and Bankex up by 0.24%, while Realty down by 1.85%, TECK down by 0.93%, Power down by 0.87%, Oil & Gas down by 0.66% and Capital Goods down by 0.61% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were GAIL India up by 2.16%, ICICI Bank up by 1.38%, Tata Motors up by 1.37%, Lupin up by 1.32% and Coal India up by 1.30%. (Provisional)

On the flip side, Bharti Airtel down by 6.13%, Reliance Industries down by 2.84%, Wipro down by 1.34%, Adani Ports & Special Economic zone down by 1.08% and NTPC down by 0.53% were the top losers. (Provisional)

Meanwhile, India’s manufacturing activity expanded at its fastest pace in 13 months in August, with pickup in demand from domestic and external markets. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 52.6 in August from 51.8 in July.

Manufacturing PMI showed positive momentum at the beginning of second semester, carried over into August, with expansion rates for new work, buying levels and production accelerating further. The new orders sub-index, which takes into account both domestic and external demand, was 54.8 in August - its highest since December 2014 and indicating robust demand for Indian manufactured goods. Buying levels were also raised, as companies attempted to build inventory levels. The upturn in purchasing activity was moderate, but the rate of growth was at a 12-month high.

According to survey, higher prices paid for petrol and other raw materials led overall cost burdens faced by Indian manufacturers to rise further. Further survey highlighted an increasing degree of pressure on the capacity of manufacturers’ operations as backlogs rose to the greatest extent since December 2013. On the price front, softer increases in input costs and output charges and, in both cases, inflation rates were below their respective trends.

Sharp upturn was seen in new business inflows, which expanded at the fastest pace since December 2014. Consumer goods producers led the increase, and solid growth was also seen in the intermediate and capital goods categories.

The CNX Nifty ended at 8779.20, down by 7.00 points or 0.08% after trading in a range of 8759.95 and 8813.25. There were 27 stocks advancing against 24 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 2.37%, Lupin up by 1.67%, Mahindra & Mahindra up by 1.49%, HDFC up by 1.46% and Ultratech Cement up by 1.40%. (Provisional)

On the flip side, Idea Cellular down by 10.86%, Bharti Airtel down by 6.29%, Reliance Industries down by 2.97%, BHEL down by 2.88% and Aurobindo Pharma down by 2.32% were the top losers. (Provisional)

The European markets were trading mostly in green; Germany’s DAX increased 45.83 points or 0.43% to 10,638.52 and France’s CAC increased 38.13 points or 0.86% to 4,476.35, while UK’s FTSE 100 decreased 8.76 points or 0.13% to 6,772.75.

The Asian markets ended mostly in red on Thursday as investors cautiously awaited US jobs data, due Friday, for clues on the timing of a possible interest rate hike by the Federal Reserve. A recent report from payroll processor ADP, showed that private US employers continued to hire at a solid clip in August, adding 177,000 workers, raised expectations for strong nonfarm-payroll numbers. Chinese shares ended a tad lower, dragged down by financials and property developers as better-than-expected manufacturing data reinforced growing views among investors that China's central bank will be in no hurry to inject further stimulus. However, Japanese shares hit a three-month closing high, as the dollar/yen paid held above 103 and latest survey data signaled an increase in Japanese manufacturing output for the first time in six months.