Bears hold tight grip over markets

Bears held their tight grip over Indian equity markets in late afternoon session, despite firm cues from European markets. Sentiments remained dampened after Global analytical firm CRISIL sliced its estimate of India's gross domestic product (GDP) growth by 20 basis points to 6.9 per cent for the current fiscal 2019-20 following a triangulation of downside risks: weak monsoon, slowing global growth and sluggish high-frequency data for the first quarter. Traders were also pessimistic with report that the growth of eight core infrastructure industries fell to its lowest in more than four years in June 2019. The index of eight core industries rose 0.2% in June, down from 7.8% in same month last year, mainly due to a contraction in oil-related sectors as well as in cement production.

On the global front, European markets were trading in green, even though the euro area manufacturing sector contracted the most since the end of 2012 in July but at a slower than initially estimated pace. The final data from IHS Markit showed that the manufacturing Purchasing Managers' Index fell to 46.5 in July from 47.6 in June. The score signaled the sharpest deterioration in operating conditions since December 2012. Asian markets were trading in red.

The BSE Sensex is currently trading at 36749.46, down by 731.66 points or 1.95% after trading in a range of 36745.83 and 37387.18. There were 2 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.52%, while Small cap index was down by 1.58%.

The top losing sectoral indices on the BSE were Metal down by 3.93%, Basic Materials down by 3.19%, Bankex down by 2.64%, PSU down by 2.62% and Capital Goods down by 2.54%, while there were no gaining sectoral indices on the BSE.

The only gainers on the Sensex were Power Grid up by 1.37% and Maruti Suzuki up by 0.14%. On the flip side, Vedanta down by 6.33%, SBI down by 5.74%, Tata Motors down by 5.20%, Tata Motors - DVR down by 4.68% and Yes Bank down by 4.16% were the top losers.

Meanwhile, India's manufacturing activity strengthened in the month of July, on the back of quicker upturn in factory orders. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 52.5 in July from 52.1 in June.

As per the survey report, consumer goods producers led the upturn in July for the third month in a row, although there was also a stronger improvement in business conditions at intermediate goods makers. The capital goods sub-sector dipped into contraction, with lower sales causing reductions in output & quantities of purchases.

Besides, new export orders also continued to rise, but a slowdown in growth was noted. Besides, external sales rose to the least extent since April 2018 as factories took a hit from subdued global trade flows. Hiring continued in July and additional inputs were purchased.

On the price front, input costs increased slightly in July as higher prices for steel, chemicals, cotton and freight were partly offset by lower charges for base oil, copper and plastics. The overall rate of inflation was at a three-month low and well below its long-run average. Output charges rose marginally in July, following reductions in each of the two previous months.

The CNX Nifty is currently trading at 10896.15, down by 221.85 points or 2.00% after trading in a range of 10881.00 and 11076.75. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 1.87%, Power Grid up by 1.52%, Wipro up by 1.51% and Maruti Suzuki up by 0.28%. On the flip side, Vedanta down by 6.16%, SBI down by 5.96%, JSW Steel down by 5.62%, Tata Motors down by 5.42% and Zee Entertainment down by 4.84% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 260.83 points or 0.94% to 27,516.92, Taiwan Weighted dropped 92.06 points or 0.85% to 10,731.75, Shanghai Composite declined 23.50 points or 0.8% to 2,909.01, Straits Times trembled 11.39 points or 0.35% to 3,289.36, KOSPI fell 7.21 points or 0.36% to 2,017.34 and Jakarta Composite was down by 2.12 points or 0.03% to 6,388.39. On the flip side, Nikkei 225 surged 19.46 points or 0.09% to 21,540.99.

European markets were trading mostly in green; DAX gained 31.06 points or 0.25% to 12,220.10 and CAC was up by 26.87 points or 0.49% to 5,545.77, while FTSE was down by 7.39 points or 0.10% to 7,579.39.