Market Commentary - End-Session
Indices hit new record highs; Nifty ends at 25,278.70; VIX rises over 14 As on : 02-Sep-24  17:28

The headline equity benchmarks ended with decent gains after hitting fresh record highs on Monday. The Nifty settled above the 25,250 mark.

The barometer index, the S&P BSE Sensex gained 194.07 points or 0.24% to 82,559.84. The Nifty 50 index added 42.80 points or 0.17% to 25,278.70.

The Sensex and Nifty clocked an all-time high of 82,725.28 and 25,333.65, respectively in early trade.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index shed 0.03% and the S&P BSE Small-Cap index fell 0.47%.

The S&P BSE Mid-Cap index hit an all-time high at 49,306.56. The market breadth was negative.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, jumped 4.98% to 14.06.

Economy:

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) stood at 57.5 in August, below July's reading of 58.1 but above its long-run average of 54.0, signalling a substantial improvement in operating conditions.

Pranjul Bhandari, Chief India Economist at HSBC, said: The Indian manufacturing sector continued to expand in August, although the pace of expansion moderated slightly. New orders and output also mirrored the headline trend, with some panellists citing fierce competition as a reason for slowdown.

On a positive note, the rise in input costs slowed sharply. Manufacturers increased their raw material buying activity in order to build safety stocks. In line with input costs, the pace of output price inflation also decelerated, but the deceleration was to a much smaller extent, thereby increasing margins for manufacturers. Business outlook for the year ahead moderated slightly in August, driven by competitive pressures and inflation concerns.'

Cabinet Meeting Outcome:

Union Cabinet gave nod to seven decisions focused on boosting farm-related activities in India.

Union Cabinet announced the launch of Digital Agriculture Mission with an outlay of Rs 2,817 crore to improve farmers' lives through technology. It has also approved Rs 2,291 core for agricultural education.

The government has approved Rs 3,979 crore for food and nutritional security. It also approved Rs 1,702 crore for sustainable livestock health and production.

The Cabinet approved horticulture plan worth Rs 860 crore, it also approved Rs 1,115 crore plan for Natural Resource Management.

The union cabinet has also approved Rs 1,202 crore plan to strengthen Krishi Vigyan Kendra.

In addition to decisions, the union cabinet also approved the proposal of Kaynes Semicon Private Ltd to setup a semiconductor unit in Sanand, Gujarat. The proposed unit will be setup with an investment of Rs 3,300 crore. The capacity of this unit will be 60 Lakh chips per day.

Cabinet has approved approved a 309 KM long new railway line project under Ministry of Railways with total cost of Rs. 18,036 crore (approximately). The proposed new line between Indore and Manmad will provide direct connectivity and improve mobility, providing enhanced efficiency and service reliability for Indian Railways.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 1.89% to 6.993 as compared with previous close 6.863.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.9275, compared with its close of 83.8525 during the previous trading session.

MCX Gold futures for 4 October 2024 settlement added 0.06% to Rs 71,640.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.04% to 101.66.

The United States 10-year bond yield grew 0.75% to 3.938.

In the commodities market, Brent crude for October 2024 settlement shed 2 cents or 0.03% to $76.91 a barrel.

Global Markets:

European market declined while Asian stocks ended mixed on Monday.

The Investors awaited a data-packed week, culminating in the crucial U.S. jobs report. This report could determine whether the anticipated rate cut this month will be a standard or more aggressive reduction.

A Labor Day holiday in the United States and Canada contributed to thin trading conditions. Meanwhile, gains by far-right parties in German state elections added a layer of political uncertainty.

The Caixin China manufacturing PMI fell to a six month low of 49.1, a faster contraction compared to the 49.4 seen in July. This follows the official gauge, which showed a fourth consecutive month of contraction in August, indicating potential challenges in meeting China's annual growth target. The country's residential property market also continued to decline last month.

U.S. stocks rallied on Friday, buoyed by a report of improved consumer sentiment. This was attributed to easing inflation and expectations of Federal Reserve rate cuts, leading to optimism about personal finances. The Fed's preferred measure of underlying U.S. inflation, the core personal consumption expenditures price index, rose 0.2% month-over-month in July and 2.5% year-over-year.

The Dow Jones Industrial Average closed at a new all-time high, up 0.55%. The S&P 500 gained 1.01%, reaching 5,648.40, and the tech-heavy Nasdaq Composite rose 1.13% to 17,713.62.

Stocks in Spotlight:

Maruti Suzuki India rose 0.18%. The company has recorded total auto sales of 181,782 units in August 2024, which is lower by 4% as compared with 189,082 units sold in August 2023.

Tata Motors declined 1.65% after the auto major's domestic and international vehicle sales declined 8.1% to 71,693 units in August 2024 as against 78,010 units sold in August 2023.

Bajaj Auto advanced 1.97% after the company reported 16.43% jump in total auto sales to 3,97,804 units in August 2024 as against 3,41,648 units in August 2023.

Ashok Leyland fell 1.89% after the company has reported total commercial vehicle sales of 14,463 units for the month of August 2024, which is lower by 7% as compared with the sales of 15,576 units sold in August 2023.

Escorts Kubota declined 1.79%. The tractor manufacturer announced that its agri machinery business division sales grew marginally to 5,614 units in August 2024 as against 5,593 units sold in August 2023. Further, the company's construction equipment business division sold 355 machines in August 2024, registering de-growth of 31.73% from 520 machines sold in August 2023.

Hero MotoCorp advanced 2.19% after the two-wheeler major's total motorcycle and scooter sales rose 4.84% to 512,360 units of in August 2024 as compared with sales of 488,717 units recorded in August 2023.

Steel Strips Wheels (SSWL) rose 0.55%. The company achieved net turnover of Rs 363.10 crore in August 2024, down 6.84% from Rs 389.77 crore posted in August 2023.

TVS Motor fell 0.83%. The two-wheeler maker's total sales jumped 13.23% to 391,588 units in August 2024 as compared with 345,848 units in August 2023.

Mahindra And Mahindra slipped 1.06%. The auto major announced that its overall auto sales grew by 9.1% to 76,755 vehicles sold in August 2024 as against 70,350 vehicles sold in August 2023. Further, the company's Farm Equipment Sector (FES) announced that its total tractor sales (domestic + exports) during August 2024 was at 21,917 units, up 1.11% from 21,676 units in August 2023.

Eicher Motors fell 0.82%. The company's unlisted subsidiary, VE Commercial Vehicles (VECV) rose marginally to 6,543 units in August 2024 from 6,476 units sold in the same period last year. Further, it has sold 73,629 motorcycle units in August 2024, which is lower by 5.1% as compared with 77,583 units in August 2023.

Coal India (CIL) slipped 0.74%. The company recorded 11.9% decrease in coal production to 46.1 million tones (MT) in August 2024 from 52.3 million tones in August 2023.

Adani Ports and Special Economic Zone (APSEZ) rose 0.85%. The company clocked 36.1 million metric tons (MMT) of cargo volume in August 2024, registering a growth of 5% YoY.

IPO Update :

The initial public offer (IPO) of Baazar Style Retail received 6,96,80,144 bids for shares as against 1,50,30,116 shares on offer, according to stock exchange data at 17:00 IST on Monday (2 September 2024). The issue was subscribed 4.64 times.

The issue opened for bidding on 30 August 2024 and it will close on 3 September 2024. The price band of the IPO was fixed between Rs 370 to 389 per share. An investor can bid for a minimum of 38 equity shares and in multiples thereof.

The initial public offer (IPO) of Gala Precision Engineering received 2,40,82,044 bids for shares as against 22,23,830 shares on offer, according to stock exchange data at 17:00 IST on Monday (2 September 2024). The issue was subscribed 10.83 times.

The issue opened for bidding on Monday (2 September 2024) and it will close on Wednesday (4 September 2024). The price band of the IPO is fixed between Rs 503 to Rs 529 per share. An investor can bid for a minimum of 28 equity shares and in multiples thereof.

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