Post Session: Quick Review

Indian equity benchmarks witnessed a heavy fall on Thursday, with both Sensex and Nifty ending over a percent lower. After a negative start, markets remained lower during the entire day, as the disappointing gross domestic product (GDP) numbers weighted down on investors’ sentiment. India's gross domestic product (GDP) rose 13.5% year-on-year (y-o-y) in the April-June period. Though, it is the fastest annual expansion in a year, it was lower than the predictions made by the Reserve Bank of India (RBI; 16.2 per cent) and other market participants. Traders remained concerned as the data of the Department for Promotion of Industry and Internal Trade (DPIIT) showed that Foreign Direct Investment (FDI) equity inflows into India contracted by 6% to $16.59 billion during the April-June quarter this fiscal.

Bears held a tight grip over the Dalal Street during the day. Market participants  remained cautious as Moody’s Investors Service has lowered its gross domestic product (GDP) growth forecast for India to 7.7 percent for the calendar year 2022 (CY22). The global credit rating agency also lowered India's GDP forecast for CY23 to 5.2 percent from 5.4 percent. Some concern also came with the Reserve Bank data showed India Inc's foreign direct investment in July declined over 50 per cent to $1.11 billion in July 2022. Market participants failed to take any support after India collected Rs 1.44 lakh crore in Goods and Services Tax (GST) in August, registering an increase of 28 percent from the mop-up a year back.

In the second half of the trading session, key indices added more losses, as domestic sentiments got cautious, after India's manufacturing activity improved again in August, although S&P Global's Purchasing Managers' Index (PMI) edged down to 56.2 from the eight-month high of 56.4 recorded in July. Adding more worries, the output of eight core infrastructure sectors contracted to six-month low of 4.5 per cent in July 2022 against 9.9 per cent in the year-ago period. The production growth of eight infrastructure sectors was 13.2 per cent in June 2022. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity - comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).

On the global front, European markets were trading lower starting the new month on a negative note as investors fretted about the combination of tightening monetary policy and slowing global growth. Asian markets finished mostly in red, after the manufacturing sector in China fell into contraction territory in August, the latest survey from Caixin showed on Thursday with a manufacturing PMI score of 49.5. That's down from 50.4 in July, and it moves beneath the boom-or-bust line of 50 that separates expansion from contraction. Though only slight, it marked the first drop in sales for three months.

The BSE Sensex ended at 58766.59, down by 770.48 points or 1.29% after trading in a range of 58522.57 and 59309.79. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.57%, while Small cap index up by 0.48%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 2.20%, Realty up by 1.07%, Industrials up by 0.90%, Capital Goods up by 0.70% and Consumer Disc up by 0.32%, while Energy down by 1.99%, Oil & Gas down by 1.77%, IT down by 1.68%, Metal down by 1.56% and TECK down by 1.41% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bajaj Finserv up by 2.58%, Asian Paints up by 1.63%, Bharti Airtel up by 1.18%, Titan Co up by 0.78% and SBI up by 0.40%. On the flip side, Reliance Industries down by 2.99%, TCS down by 2.49%, Sun Pharma down by 2.42%, Tech Mahindra down by 2.15% and Hindustan Unilever down by 1.99% were the top losers. (Provisional)

Meanwhile, Indian manufacturing activity growth eased in the month of August, but it remains above the boom-or-bust line of 50 that separates expansion from contraction, as a sustained improvement in demand conditions boosted new order intakes at Indian manufacturers during August, which in turn pushed output growth to a nine-month high. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 56.2 in August from 56.4 in July.

The report further noted that production volumes were also supported by a pick-up in exports and upbeat projections for the year-ahead outlook. Firms were at their most optimistic for six years. Besides, international markets gave impetus to total sales, as seen by a marked and quicker increase in new export orders halfway through the second fiscal quarter.

On the inflation front, although manufacturers continued to signal higher prices for a wide range of materials in August, the overall rate of cost inflation softened to a one-year low as commodity prices (particularly aluminium and steel) moderated. There was a moderate upturn in factory gate charges in August as monitored companies lifted their fees in line with the passing on of higher freight, labour and material costs to clients.

The CNX Nifty ended at 17542.80, down by 216.50 points or 1.22% after trading in a range of 17468.45 and 17695.60. There were 13 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Consumer Products up by 3.55%, Bajaj Finserv up by 2.62%, Asian Paints up by 1.62%, Eicher Motors up by 1.57% and Hero MotoCorp up by 1.37%. On the flip side, Hindalco down by 3.88%, Reliance Industries down by 2.94%, ONGC down by 2.81%, TCS down by 2.47% and SBI Life Insurance down by 2.45% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 108.97 points or 1.5% to 7,175.18, France’s CAC decreased 96.35 points or 1.57% to 6,028.75 and Germany’s DAX was down by 195.52 points or 1.52% to 12,639.44.

Most of the Asian markets finished in red on Thursday, as the hawkish interest rate outlook to tackle inflation spurred fears about global economic slowdown. Moreover, lingering war in Ukraine, foreign demand dwindling, peaking energy crisis and China's COVID curbs also dampened the investor sentiments. Japan’s Nikkei tumbled marking sharpest dip in a month with the bearish global indices and on woes over depreciation of local currency to a 24-year low level. Hang Seng settled lower for the fourth consecutive session. Shanghai also finished in red amid dismal Chinese manufacturing data, and as official PMI figures pointed to a further slowdown in the Chinese economy.