Bourses trade deep in red in late afternoon session

Tracing weak global cues, Indian equity markets continued to trade with hefty losses in late afternoon session on fears of US recession after weaker than expected jobs data for July. The market breadth was skewed in the favour of sellers. Sentiments continued to hit as India’s services sector growth eased during the month of July as higher wage and material costs continued to push up business expenses, with the overall rate of inflation quickening from June. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index eased to 60.3 in July from 60.5 in June. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also fell to 60.7 in July as against 60.9 in June. 

On the global front, all Asian markets were trading lower amid fears of a possible U.S. recession and concerns over an escalating Middle East conflict. European markets were trading lower as a global stock market rout intensified on concerns that a U.S. recession might be imminent. Weak service sector activity data and the threat of a wider conflict in the Middle East also kept investors nervous.

The BSE Sensex is currently trading at 78650.82, down by 2331.13 points or 2.88% after trading in a range of 78295.86 and 79780.61. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 3.79%, while Small cap index was down by 4.20%.

The top losing sectoral indices on the BSE were Realty down by 4.76%, Metal down by 4.70%, PSU down by 4.50%, Utilities down by 4.33% and Oil & Gas was down by 4.24%, while there were no gaining sectoral indices on the BSE. 

The top gainers on the Sensex were Hindustan Unilever up by 0.87% and Nestle up by 0.80%. On the flip side, Tata Motors down by 6.92%, Adani Ports down by 6.18%, Tata Steel down by 5.12%, SBI down by 4.78% and Power Grid down by 4.59% were the only losers.

Meanwhile, India’s services sector growth eased during the month of July as higher wage and material costs continued to push up business expenses, with the overall rate of inflation quickening from June, however it remained above the neutral mark of 50.0 for the thirty-sixth straight month. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index eased to 60.3 in July from 60.5 in June. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also fell to 60.7 in July as against 60.9 in June.

The report noted that the rise in output reflected a sustained increase in sales volumes in July, amid buoyant demand, tech investment and a growing online presence. Total new orders expanded at a historically sharp pace. New export orders increased at the third-strongest pace since the inception of the series in September 2014, amid strengthening demand for Indian services from across the world. Some of the sources of rising export orders included Austria, Brazil, China, Japan, Singapore, the Netherlands and US.

However, a pick-up in cost pressures and stronger pipelines of new business encouraged firms to hike their selling prices again in July. The overall rate of charge inflation climbed to a seven-year high. Further, favourable economic conditions and optimistic expectations for output supported recruitment among services firms. The latest rise in employment levels was among the strongest in close to two years. Job creation was achieved via the hiring of full- and part-time staff.

The CNX Nifty is currently trading at 24028.20, down by 689.50 points or 2.79% after trading in a range of 23893.70 and 24350.05. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 0.98%, Nestle up by 0.65%, Tata Consumer up by 0.28%, Britannia up by 0.19% and Apollo Hospital Ent. up by 0.18%. On the flip side, Tata Motors down by 6.88%, Adani Ports down by 6.24%, ONGC down by 6.04%, Hindalco down by 5.16% and Tata Steel down by 5.15% were the top losers.

All Asian markets were trading lower; Shanghai Composite weakened 44.64 points or 1.56% to 2,860.70, Straits Times fell 138.17 points or 4.26% to 3,243.28, KOSPI dropped 234.64 points or 9.61% to 2,441.55, Hang Seng declined 247.15 points or 1.48% to 16,698.36, Jakarta Composite plunged 249.79 points or 3.54% to 7,058.33, Taiwan Weighted lost 1807.21 points or 9.11% to 19,830.88 and Nikkei 225 was down by 4451.28 points or 14.15% to 31,458.42.

European markets were trading lower; UK’s FTSE 100 decreased 183.45 points or 2.24% to 7,991.26, France’s CAC fell 152.58 points or 2.1% to 7,099.22 and Germany’s DAX was down by 416.23 points or 2.36% to 17,244.99.