Post Session: Quick Review

Mirroring weak global cues, Indian equity markets witnessed bloodbath throughout the session and ended with the cut of over two percent on Monday as weak July U.S. jobs report as well as disappointing earnings from Intel and Amazon ignited worries that the world's largest economy could be falling into a recession under the weight of the Federal Reserve's policy of high interest rates. The market breadth was skewed in the favour of sellers during the day. The broader indices, the BSE Mid cap index and Small cap index also ended with deep cuts.

Markets made gap-down opening and extended their losses tracking sell-off in the global markets. Some cautiousness came as data from the central bank showed India's foreign exchange reserves halted a three-week gaining streak and stood at $667.39 billion as of July 26, coming off record highs. Traders overlooked a report that India’s unemployment rate (UR) dropped by 1.3 percentage points in July from an eight-month high of over nine per cent in the previous month. The UR fell to 7.9 per cent in July from 9.2 per cent in June. In afternoon session, indices continued to trade under heavy selling pressure as sentiments got hit after 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. Selling got intensified during the late afternoon session, as investors sold their riskier assets. Finally, Nifty and Sensex settled below the psychological 24,100 and 79,000 levels respectively.

On the global front, 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. All Asian markets ended lower amid fears of a possible U.S. recession and concerns over an escalating Middle East conflict. Back home, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,310 crore on Friday, according to exchange data.

The BSE Sensex ended at 78,759.40, down by 2222.55 points or 2.74% after trading in a range of 78,295.86 and 79,780.61. There were 2 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 3.60%, while Small cap index was down by 4.21%. (Provisional)

The top losing sectoral indices on the BSE were Metal down by 4.73%, Utilities down by 4.30%, Realty down by 4.25%, PSU down by 4.20% and Capital Goods was down by 4.13%, while there were no gaining sectoral indices on the BSE (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 0.83% and Nestle up by 0.61%. On the flip side, Tata Motors down by 7.32%, Adani Ports down by 5.93%, Tata Steel down by 5.31%, SBI down by 4.34% and Power Grid down by 4.19% were the top losers. (Provisional)

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 ended at 24,055.60, down by 662.10 points or 2.68% after trading in a range of 23,893.70 and 24,350.05. There were 4 stocks advancing against 46 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindustan Unilever up by 0.87%, Nestle up by 0.63%, HDFC Life Insurance up by 0.49% and Tata Consumer up by 0.48%. On the flip side, Tata Motors down by 7.31%, ONGC down by 6.01%, Adani Ports down by 5.93%, Tata Steel down by 5.31% and Hindalco down by 5.21% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 155.21 points or 1.94% to 8,019.50, France’s CAC fell 147.24 points or 2.07% to 7,104.56 and Germany’s DAX was down by 419.86 points or 2.44% to 17,241.36.