Markets remain lackluster in late afternoon session

Indian equity markets continued to trade below their neutral lines despite firm cues from global markets as investors sought more clues on progress of trade deal between US and India following the US President’s announcement of trade deal with Japan and Philippine. Besides, traders reacted to Q1 earnings results of Infosys, Dr Reddy's Labs, Coforge and Tata Consumer Products among others. The persistent selling by Foreign Institutional Investors (FIIs) weighed on the trading sentiments. The FIIs were the net seller on yesterday’s trade, offloading Rs 4,209.11 crore worth of equities. Further, market participants ignored India’s flash PMI data showing that operating conditions across India's private sector continued to improve in the month of July. The HSBC Flash India Manufacturing PMI index rose from 58.4 in June to 59.2 in July, its highest reading in close to 17-and-a-half years and indicative of a robust improvement in the health of the manufacturing industry.

On the global front, all Asian equity markets were trading higher following the broadly positive cues from Wall Street overnight. European equity markets were trading higher as investors digested a slew of earnings and awaited the European Central Bank's interest-rate decision later in the day.

The BSE Sensex is currently trading at 82255.78, down by 470.86 points or 0.57% after trading in a range of 82047.22 and 82784.24. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.47%, while Small cap index was down by 0.47%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.63%, Auto up by 0.11% and Metal up by 0.08%, while IT down by 1.85%, TECK down by 1.45%, Realty down by 1.10%, FMCG down by 1.04%, Energy down by 0.79% were the top losing indices on BSE.

The top gainers on the Sensex were Eternal up by 3.64%, Tata Motors up by 1.39%, Sun Pharmaceutical Industries up by 0.60%, Tata Steel up by 0.49% and Titan Company up by 0.26%. On the flip side, Trent down by 3.55%, Tech Mahindra down by 2.98%, Infosys down by 1.59%, HCL Technologies down by 1.57% and Reliance Industries down by 1.24% were the top losers.

Meanwhile, India’s flash PMI data showed that operating conditions across India's private sector continued to improve in the month of July. Indian manufacturers led the way, recording faster rates of expansion than services for all of the three metrics i.e. total sales, export orders and output levels. The HSBC Flash India Manufacturing PMI index rose from 58.4 in June to 59.2 in July, its highest reading in close to 17-and-a-half years and indicative of a robust improvement in the health of the manufacturing industry. However, the HSBC Flash India Composite Output Index -- a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors -- eased slightly to 60.7 in July from a final reading of 61.0 in June. The figure still remained well above the 50-level that separates growth from contraction and marked sustained expansion for the past four years. 

On the price front, there was a pick-up in cost pressures across the private sector. Aluminium, cotton, foodstuffs (cooking oil, egg, meat, vegetables), rubber, steel and transportation all rose in price. The rate of inflation was solid, but remained below its long-run average. Services companies recorded a faster increase in input prices than their manufacturing counterparts. Charge inflation likewise intensified in July, as private sector companies sought to share additional cost burdens with their clients by lifting selling prices. Moreover, the pace of increase surpassed the series trend, with stronger rates of inflation seen in both the manufacturing and service sectors.

The data report noted that although Indian firms continued to forecast output growth over the course of the coming 12 months, the overall level of positive sentiment fell to its lowest mark since March 2023. Dampening sentiment were concerns around price pressures and heightened competition for new work. Subsequently, job creation eased in July. Employment rose at a moderate pace that was the weakest in 15 months. A notable slowdown in growth was seen in the service economy, where the respective seasonally adjusted index fell by nearly four points. This moderation in job creation, coupled with robust intakes of new business, added to firms' capacity constraints. Outstanding business volumes across the private sector rose at a solid rate that was the fastest in nearly five years. Pressures were more intense in the service economy than in the manufacturing industry.

The CNX Nifty is currently trading at 25086.65, down by 133.25 points or 0.53% after trading in a range of 25018.70 and 25246.25. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Eternal up by 3.69%, Dr. Reddy's Laboratories up by 1.97%, Tata Motors up by 1.40%, Tata Consumer Products up by 1.27% and Grasim Industries up by 1.20%. On the flip side, Nestle down by 5.13%, Trent down by 3.45%, Tech Mahindra down by 2.98%, Shriram Finance down by 2.91% and HCL Technologies down by 1.59% were the top losers.

All Asian markets are trading higher; Hang Seng advanced 88.93 points or 0.35% to 25,627.00, Jakarta Composite gained 58.15 points or 0.78% to 7,527.38, KOSPI increased 6.68 points or 0.21% to 3,190.45, Nikkei 225 surged 655.02 points or 1.57% to 41,826.34, Taiwan Weighted added 55.06 points or 0.24% to 23,373.73, Straits Times rose 36.11 points or 0.85% to 4,267.39 and Shanghai Composite strengthened 23.43 points or 0.65% to 3,605.73.

All European markets were trading higher; UK’s FTSE 100 increased 63.77 points or 0.7% to 9,125.26, France’s CAC rose 26.97 points or 0.34% to 7,877.40 and Germany’s DAX gained 255.88 points or 1.04% to 24,496.70.