Weak trade persists on Dalal Street

Weak trade continued in late afternoon session, with both the larger peers, Sensex and Nifty plunging more than 200 and 80 points, respectively. Besides, Telecom index declined the most among all other sectoral indices, weighed by fall in Bharti Airtel and IDEA. Following the larger peers, the broader markets too traded sluggish with notable losses. Subdued opening in European markets, weak Services PMI data and fall in heavyweights like Hindustan Unilever and Tata Motors - DVR, kept the trader’s sentiments down in late noon deals. India’s services sector activity fell in the month of August from July’s 21-month peak, primarily due to the weakest growth in new work. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index dropped to 51.5 in August from 54.2 in July, signaling the slowest growth in the current sequence. Besides, the Nikkei India Composite PMI Output Index which measures both manufacturing and services too fell to 51.9 in August from 54.1 in July. Adding some woes, the National Stock Exchange (NSE) raised concern over potential for large-scale cyber attacks on financial market infrastructure and called for setting up the standards to bring about the change through talent empowerment and investment in innovation. Traders failed to get any sense of relief with Commerce and Industry Minister Suresh Prabhu’s statement that the proposed new industrial policy, to be released soon, would help link domestic industry with the global supply chain.

On the global front, European markets were trading in red, as Eurozone producer price inflation accelerated on energy prices in July. The figures from Eurostat showed that producer prices advanced 4% year-on-year in July, following a 3.6% rise in June. Asian markets were trading in red, as fears of a Chinese slowdown and economic turbulence in emerging market economies sapped investors’ appetite for risk. Back home, in scrip specific development, McNally Bharat Engineering Company zoomed after the company received one order from NLC India relating to work of construction of 544 number of colony houses and community hall including internal Electrification - Phase-I for Talabira II & III OCP - proposed R&R colony at Khinda - Odisha worth around Rs 107.97 crore.

The BSE Sensex is currently trading at 37943.84, down by 214.08 points or 0.56% after trading in a range of 37774.42 and 38250.61. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.46%, while Small cap index was down by 1.55%.

The lone gaining sectoral indices on the BSE were Metal up by 0.21%, while Telecom down by 3.12%, Consumer Durables down by 2.63%, Realty down by 2.02%, Capital Goods down by 1.76% and Energy down by 1.67% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 1.68%, Wipro up by 1.55%, Bajaj Auto up by 0.94%, Vedanta up by 0.94% and Sun Pharma up by 0.75%. On the flip side, Hindustan Unilever down by 2.92%, Tata Motors - DVR down by 2.84%, Bharti Airtel down by 2.71%, Reliance Industries down by 2.04% and Kotak Mahindra Bank down by 1.96% were the top losers.

Meanwhile, India’s services sector activity fell in the month of August from July’s 21-month peak, primarily due to the weakest growth in new work. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index dropped to 51.5 in August from 54.2 in July, signaling the slowest growth in the current sequence. However, the index managed to remain above the neutral 50.0 threshold for the third consecutive month in August. Further, the Nikkei India Composite PMI Output Index which measures both manufacturing and services too fell to 51.9 in August from 54.1 in July.

The report also noted that new business placed at Indian service providers rose for the sixth consecutive month in the reported month, owing to strong market demand but the rate of expansion was slight and moderated from July’s 13-month high to the weakest since May. Subsequently, firms raised their staffing levels at the slowest pace since last November.

On the inflation front, Indian service providers faced higher input costs during August, on account of higher oil-related prices. The report further found that the service firms raised their selling prices at a marginal pace that was close to July’s 16-month low, as they could not fully pass higher cost burdens to clients due to competitive conditions. On a positive note, business confidence rose in August to the highest level since May. Besides, positive projections for activity in the next 12 months were rooted in upbeat forecasts of sales, an expected improvement in demand and promotional activities.

The CNX Nifty is currently trading at 11439.25, down by 81.05 points or 0.70% after trading in a range of 11393.85 and 11542.65. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Wipro up by 1.63%, Yes Bank up by 1.54%, Hindalco up by 1.51%, Bajaj Auto up by 0.84% and Vedanta up by 0.80%. On the flip side, Bharti Infratel down by 4.59%, Hindustan Unilever down by 2.98%, Bharti Airtel down by 2.88%, Titan Company down by 2.87% and Zee Entertainment down by 2.82% were the top losers.

All Asian markets were trading in red; Taiwan Weighted decreased 26.25 points or 0.24% to 10,995.13, Hang Seng plunged 729.49 points or 2.68% to 27,243.85, Shanghai Composite lost 46.24 points or 1.71% to 2,704.34, KOSPI fell 23.95 points or 1.05% to 2,291.77, Jakarta Composite declined 216.51 points or 3.81% to 5,688.79, Straits Times dipped 55.66 points or 1.76% to 3,154.85 and Nikkei 225 was down by 116.07 points or 0.51% to 22,580.83. 

All European markets were trading in red; UK’s FTSE 100 decreased 30.24 points or 0.41% to 7,427.62, France’s CAC fell 58.14 points or 1.1% to 5,284.56 and Germany’s DAX was down by 76.01 points or 0.63% to 12,134.20.