Sensex, Nifty off day’s high

Indian equity benchmarks witnessed a sharp correction in early afternoon deals, with both Sensex and Nifty coming off their intraday high points, on the back of mixed cues from other Asian markets along with selling at Realty and Capital Goods counters. Sentiments got hit, as India's manufacturing sector growth eased in the month of July, amid slightly softer increases in new orders and output. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 58.1 in July 2024 as against 58.3 in June 2024. However, the latest reading was above the series long-run average and one of the highest seen in recent years.

Adding more concern among traders, the Ministry of Commerce & Industry in its latest data showed that the output of eight core industries slowed down to 4 percent in June 2024 from 8.4 percent in the same period last year, due to a decline in the output of crude oil, and refinery products. The core sectors' production grew by 6.4 percent in May 2024. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity - comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).

On the global front, Asian markets were trading mixed, as China's manufacturing sector fell into the contraction zone in July on renewed decline in new work and weak output growth. The survey data from S&P Global showed that the Caixin manufacturing Purchasing Managers' Index fell to 49.8 in July from 51.8 in June. The reading was expected to drop moderately to 51.5. The score suggested that conditions in the manufacturing sector deteriorated for the first time in nine months.

The BSE Sensex is currently trading at 81780.35, up by 39.01 points or 0.05% after trading in a range of 81726.40 and 82129.49. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.69%, while Small cap index was down by 0.65%.

The top gaining sectoral indices on the BSE were Utilities up by 1.41%, Power up by 0.43%, Energy up by 0.35%, Healthcare up by 0.21% and Bankex up by 0.13%, while Realty down by 1.79%, Capital Goods down by 1.20%, Industrials down by 1.04%, Auto down by 0.91% and Consumer discretionary down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.11%, NTPC up by 1.49%, Bharti Airtel up by 1.13%, Nestle up by 0.94% and HDFC Bank up by 0.84%. On the flip side, Mahindra & Mahindra down by 2.56%, Tata Steel down by 2.51%, Tata Motors down by 1.15%, Kotak Mahindra Bank down by 0.92% and Larsen & Toubro down by 0.83% were the top losers.

Meanwhile, India Ratings & Research (Ind-Ra) has upped India's Gross domestic product (GDP) growth forecast for the current fiscal (FY25) to 7.5 per cent from 7.1 per cent projected earlier on expectation of improved consumption demand. It said the ongoing growth momentum led by government capex, deleveraged balance sheets of corporates/banks, and incipient private corporate capex cycle has now found support from the union government budget.

The rating agency said the budget promises to bolster agricultural/rural spending, improve credit delivery to MSMEs and incentivise employment creation in the economy. It believes these measures would help in broad basing the consumption demand. Ind-Ra's growth projection is higher than that of RBI which projected FY25 growth at 7.2 per cent and Finance Ministry's Economic Survey which estimated GDP expansion between 6.5-7 per cent. It expects Private Final Consumption Expenditure (PFCE) to grow to a 3-year high of 7.4 per cent in FY25, from 4 per cent in FY24. 

Ind-Ra stated that the consumption demand is highly skewed, as it is driven by the goods and services largely consumed by households belonging to the upper-income bracket. However, an above-normal monsoon coupled with the measures announced in the union budget FY25 is expected to correct it, by boosting the demand of goods and services consumed by the rural and households belonging to the lower income bracket. Although food inflation continues to be a risk, the expectation of retail inflation in FY25 averaging lower than in FY24 will support the real wage growth.

The CNX Nifty is currently trading at 24983.30, up by 32.15 points or 0.13% after trading in a range of 24964.35 and 25078.30. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 3.27%, Coal India up by 3.19%, Dr. Reddy's Lab up by 1.89%, Apollo Hospital up by 1.68% and NTPC up by 1.54%. On the flip side, Mahindra & Mahindra down by 2.63%, Tata Steel down by 2.49%, Hero MotoCorp down by 1.54%, Tata Motors down by 1.15% and Kotak Mahindra Bank down by 0.97% were the top losers.

Asian markets were trading mixed; Hang Seng declined 5.64 points or 0.03% to 17,338.96, Shanghai Composite weakened 4.94 points or 0.17% to 2,933.81, Straits Times fell 30.48 points or 0.89% to 3,425.46 and Nikkei 225 slipped 975.49 points or 2.56% to 38,126.33, while Jakarta Composite gained 54.32 points or 0.74% to 7,310.08, KOSPI increased 6.99 points or 0.25% to 2,777.68 and Taiwan Weighted added 442.75 points or 1.96% to 22,642.10.