Market Commentary - Mid-Session
Broader market outperforms; European mkt opens higher As on : 22-Aug-24  13:34

The headline equity indices traded with decent gains in afternoon trade. The Nifty hovered above the 24,800 level. Consumer durables, PSU bank and private bank shares advanced while IT, oil & gas and media stocks declined. Trading was volatile due to weekly F&O series expiry today.

At 13:30 IST, the barometer index, the S&P BSE Sensex, gained 155.19 points or 0.27% to 81,124.04. The Nifty 50 index added 47.10 points or 0.19% to 24,817.30.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index added 0.41% and the S&P BSE Small-Cap index gained 0.42%.

The market breadth was strong. On the BSE, 2,459 shares rose and 1,399 shares fell. A total of 135 shares were unchanged.

Economy:

The latest HSBC 'flash' PMI survey, compiled by S&P Global, also highlighted a sharp upturn in new business intakes, solid job creation and upbeat expectations towards growth prospects. On the price front, there were softer increases in both input costs and selling prices.

The headline 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 ' stood at 60.5 in August, little changed from 60.7 in July and pointing to a sharp rate of expansion that was above its long-run trend level (54.6).

There was a softer increase in manufacturing industry output and a fractionally stronger rise in activity across the service economy. Yet, the former led the upturn.

The HSBC Flash India Manufacturing PMI ' a single-figure snapshot of factory business conditions calculated from measures of new orders, output, employment, supplier delivery times and stocks of purchases ' slipped from 58.1 in July to a three-month low of 57.9 in August.

The latest reading was nevertheless above the historical average (54.0) and signaled a strong improvement in the health of the sector.

Goods producers reported the first decline in outstanding business volumes in just under a year, while service providers indicated a thirty-second consecutive monthly rise. The pace of accumulation was mild among the latter, and the weakest since February.

The HSBC Flash India Services PMI rose to 60.4 in August from 60.3 in July.

Gainers & Losers:

Grasim Industries (up 2.46%), Tata Consumer Products (up 2.09%), Bharti Airtel (up 1.67%), ICICI Bank (up 1.41%) and Hero MotoCorp (up 1.22%) were major Nifty gainers.

Tata Motors (down 1.40%), NTPC (down 1.25%) Mahindra & Mahindra (down 1.24%), Dr Reddy's Laboratories (down 1.20%) and Tata Consultancy Services (down 1.11%) were major Nifty losers.

Stocks in Spotlight:

Procter & Gamble Health slipped 2.42% after the pharma company's net profit tumbled 43.73 % to Rs 16.78 crore in Q4 June 2024 as against Rs 29.82 crore recorded in Q4 June 2023. Revenue from operations slipped 5.74% year on year to Rs 283.88 crore during the quarter, owing to changes in the go-to-market model.

Indian Renewable Energy Development of India (IREDA) surged 9.90 after the company's board said that it will meet on 29 August 2024, to consider raising funds up to Rs 4,500 crore through different modes.

Zomato shed 0.63%. The company said that its board approved to enter into share purchase agreement (SPA) with One97 Communication (Paytm), Wasteland Entertainment (WEPL) and Orbgen Technolgies (WEPL) to acquire their entertainment ticketing business.

Rail Vikas Nigam (RVNL) rose 0.98%. The company said that it has signed a memorandum of understanding (MoU) with Dhaya Maju Infrastructure (Asia) Sdn Berhad (DMIA) to expand its operations into the ASEAN market.

Aarti Drugs jumped 6.49% after the company announced that its board will meet on Monday, 26 August 2024, to consider a proposal for buyback of fully paid-up equity shares of the company.

Welspun Enterprises advanced 1.45% after the company said that its material subsidiary, Welspun Michigan Engineers (WMEL) received letter of acceptance (LOA) from the Brihanmumbai Municipal Corporation (BMC), aggregating to Rs 159.75 crore.

Transformers and Rectifiers (India) (TRIL) was locked in 5% upper circuit after the company announced that it has bagged two export orders worth $16.80 million (approximatelty equal to Rs 141 crore).

Global Markets:

Europeans market advanced while most Asian stocks traded higher on Thursday.

Japan's stock market bucked the regional trend, supported by stronger-than-expected services sector data. The au Jibun Bank flash Japan manufacturing purchasing managers' index (PMI) rose to 49.5 in August from 49.1 in July.

On Wednesday, U.S. stock markets closed higher, extending a positive streak. The S&P 500 and the Nasdaq advanced for the ninth day in the last 10 trading sessions with the former gaining 0.42% and the tech-heavy Nasdaq adding 0.57%. The Dow Jones saw modest gain of 0.14%. The minutes from the Federal Reserve's latest meeting reinforced expectations for a rate cut in September, with a majority of FOMC members indicating that such a move would be appropriate based on current economic indicators.

But optimism over a rate cut was offset by data showing a severe downward revision in U.S. payrolls data in the year to March 2024, drumming up concerns that a slowing labor market could spur a potential recession in the world's biggest economy. The Bureau of Labor Statistics revised down March 2024's employment gains by 818,000 positions earlier in the session, as part of the agency's annual benchmark review of payroll data.

Investors now eagerly await Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium on Friday.

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