Post Session: Quick Review

Bears took full control on Indian equity benchmarks on Wednesday with concerns about an imminent slowdown in the United States. Weakness in global markets pressurized the domestic markets to trade lower during the day. In last leg of trade, markets recovered from some losses. As for broader indices, the BSE Mid cap index ended in red, while Small cap index concluded in green. Sector wise, Metal and IT sector’s stocks witnessed selling pressure.

Markets made negative start and remained lower tracking sell-off on the Wall Street overnight. Traders overlooked the government data showing that foreign direct investment in India jumped 47.8 per cent to $16.17 billion in April-June this fiscal on healthy inflows in services, computer, telecom and pharma sectors. FDI inflows were at $10.94 billion in April-June 2023-24. Investors were cautious with Credit rating agency ICRA’s report stated that the increasing delinquencies in the microfinance sector, which is likely to push up the Non-banking finance companies - microfinance institutions (NBFC-MFI) credit costs to 320-340 bps in FY2025 from 220 bps in FY2024. The evolving asset quality risks will dampen sectoral growth and earnings in the current fiscal. ICRA expects NBFC-MFIs’ AUM growth to dip to 17-19% in FY2025 from 29% in FY2024. Markets continued to reel under pressure in afternoon session even after India's services sector experienced its fastest growth in five months this August, driven by resilient demand and easing inflationary pressures, according to HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P Global. India's PMI climbed to 60.9 in August, up from July's 60.3, surpassing the preliminary estimate of 60.4. In late afternoon session, markets come off from day’s lows but ended in red amid global growth concerns. 

On the global front, European markets were trading lower as investors awaited more economic readings this week for clues on the Federal Reserve's rate-cutting cycle. Asian markets ended mostly in red as China's service sector continued to expand but the pace of expansion eased since July on softening incoming new business. The headline Caixin services Purchasing Managers' Index posted 51.6 in August, down from 52.1 in July and forecast of 51.9. The index has remained above the threshold of 50.0 for the 20th straight month but growth in activity was among the lowest in the year-to-date. Back home, think tank GTRI said that the World Bank's suggestion for India to reconsider joining RCEP (Regional Comprehensive Economic Partnership) is based on flawed assumptions and outdated projections.

The BSE Sensex ended at 82,352.64, down by 202.80 points or 0.25% after trading in a range of 81,833.69 and 82,408.54. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.15%, while Small cap index was up by 0.26%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 0.94%, Realty up by 0.60%, FMCG up by 0.40%, Basic Materials up by 0.25% and Consumer Disc was up by 0.07%, while Metal down by 1.11%, IT down by 0.91%, PSU down by 0.88%, Telecom down by 0.82%, TECK down by 0.71% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Asian Paints up by 2.39%, Hindustan Unilever up by 1.74%, Ultratech Cement up by 1.31%, Sun Pharma up by 1.18% and Bajaj Finserv up by 0.43%. On the flip side, Mahindra & Mahindra down by 1.29%, Axis Bank down by 1.20%, SBI down by 1.00%, ICICI Bank down by 0.97% and Infosys down by 0.94% were the top losers. (Provisional)

Meanwhile, India’s services sector activity expanded in the month of August to the greatest extent since March as growth of incoming new business ticked higher. Moreover, payroll numbers rose solidly as companies remained upbeat regarding the economic outlook. Another positive development included a slowdown in output charge inflation, which was helped by cost pressures retreating to their lowest in four years.

According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index jumped to 60.9 in August from 60.3 in July, aided by productivity gains and positive demand trends. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- remained steady at 60.7 in August as against same figure of 60.7 in July.

The report further noted that the pick-up in total sales growth was centred on the domestic market, as new export business increased at a slower pace in August. The rise was still marked, despite easing to a six-month low. Beside, service providers signaled a further increase in their operating expenses, amid greater food, labour and transportation costs. The overall rate of inflation was, however, modest and the weakest since August 2020.

The CNX Nifty ended at 25,198.70, down by 81.15 points or 0.32% after trading in a range of 25,083.80 and 25,216.00. There were 18 stocks advancing against 31 stocks declining on the index, while 1 stock remained unchanged.  (Provisional)

The top gainers on Nifty were Asian Paints up by 2.43%, Grasim Industries up by 1.88%, Hindustan Unilever up by 1.68%, Apollo Hospital up by 1.26% and Sun Pharma up by 1.18%. On the flip side, Wipro down by 3.15%, Coal India down by 3.07%, ONGC down by 2.42%, Hindalco down by 1.78% and Mahindra & Mahindra down by 1.27% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 52.63 points or 0.64% to 8,245.83, France’s CAC fell 58.53 points or 0.78% to 7,516.57 and Germany’s DAX was down by 109.1 points or 0.59% to 18,638.01. 

Asian markets settled mostly down on Wednesday. Taiwan and South Korean shares plummeted after an overnight rout in Wall Street tech shares following a steep drop for AI investor darling Nvidia and other chip shares. Japanese shares dented by tracking weak US manufacturing data that fuelled concerns that the American economy could be headed to a recession. Traders were cautiously awaiting Friday's upcoming US payrolls data for more clues on the economic and rate outlook. Meanwhile, Chinese and Hong Kong shares fell after a private survey showed growth in China's services sector activity slowed in August.