Weakness persists on Dalal Street

Weakness persisted on Indian equity markets in late afternoon session, tracking lackluster European markets. In line with the larger peers, the broader markets were too crumbling under pressure, while Utilities stocks hit worst among all sectoral indices on the BSE. Domestic sentiments were pessimistic, as the Federation of Automobile Dealers Associations (FADA) feared that the job cuts may continue across automobile dealerships with more showrooms being shut in the near future and sought immediate government intervention such as reduction of GST to provide relief to the auto industry. It said that around two lakh jobs have been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump.

On the global front, European markets were trading in red, as Euro area investor confidence deteriorated sharply in August to its lowest level in nearly five years, amid a steep drop in the current situation assessment and expectations. The survey data from the behavioral research institute Sentix showed that the investor confidence index of the survey tumbled to -13.7 from -5.8 in July, marking its lowest level since October 2014. Asian markets were also trading in red.

The BSE Sensex is currently trading at 36635.75, down by 482.47 points or 1.30% after trading in a range of 36416.79 and 36844.05. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.43%, while Small cap index was down by 1.67%.

The few gaining sectoral indices on the BSE were IT up by 0.70%, Telecom up by 0.63% and TECK up by 0.61%, while Utilities down by 2.71%, Power down by 2.59%, Energy down by 2.57%, PSU down by 2.25% and Realty down by 2.24% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.58%, TCS up by 1.63%, Tech Mahindra up by 1.50%, Bajaj Auto up by 0.67% and Infosys up by 0.53%. On the flip side, Yes Bank down by 6.63%, Tata Motors - DVR down by 5.46%, Tata Motors down by 4.44%, Power Grid down by 4.42% and Reliance Industries down by 3.31% were the top losers.

Meanwhile, India’s services sector activity bounced back in the month of July, aided by rising new work intakes. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index jumped to 53.8 in July from 49.6 in June. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services – surged to an eight-month high of 53.9 in July as against 50.8 in June.

The survey showed that new export work rose for the fifth straight month in July. Moreover, job creation picked up to the strongest since early-2011 in response to strengthening demand conditions and upbeat predictions for the economic outlook. The report found that unfinished business across the Indian service sector increased at the slowest pace in 2019 so far. The rise was marginal and broadly in line with the long-run series average.

Another positive development in July included the continuation of subdued input cost inflation. This led to only a marginal increase in output prices over the month. Besides, companies expect advertising efforts and strengthening market conditions to support growth in the coming 12-month period.

The CNX Nifty is currently trading at 10845.15, down by 152.20 points or 1.38% after trading in a range of 10782.60 and 10895.80. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.37%, Coal India up by 1.83%, TCS up by 1.61%, Tech Mahindra up by 1.42% and Bajaj Auto up by 0.58%. On the flip side, Yes Bank down by 6.68%, Tata Motors down by 4.67%, Power Grid down by 4.56%, Zee Entertainment down by 3.87% and JSW Steel down by 3.78% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 752.23 points or 2.79% to 26,166.35, Taiwan Weighted dropped 125.63 points or 1.19% to 10,423.41, Shanghai Composite declined 37.14 points or 1.3% to 2,830.70, Straits Times trembled 61.02 points or 1.87% to 3,200.09, KOSPI fell 51.15 points or 2.56% to 1,946.98, Jakarta Composite lost 106.86 points or 1.69% to 6,233.32 and Nikkei 225 slipped 366.87 points or 1.74% to 20,720.29.

All European markets were trading in red; FTSE lost 152.17 points or 2.05% to 7,254.89, CAC fell 116.42 points or 2.17% to 5,242.58 and DAX was down by 179.40 points or 1.51% to 11,693.04.