Market Commentary - Mid-Session
Barometers trade with minor gains; European mkt decline As on : 02-Sep-24  13:38

The domestic equity benchmarks trimmed gains in afternoon trade. The Nifty traded above the 25,250 mark. IT, FMCG and financial services shares advanced while metal, media and auto stocks declined.

At 13:30 IST, the barometer index, the S&P BSE Sensex rose 129.84 points or 0.16% to 82,490.41. The Nifty 50 index added 21.30 points or 0.08% to 25,257.20.

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 fell 0.12% and the S&P BSE Small-Cap index declined 0.62%. The S&P BSE Mid-Cap index hit an all-time high at 49,306.56.

The market breadth was negative. On the BSE, 1,650 shares rose and 2,331 shares fell. A total of 146 shares were unchanged.

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.

Indian manufacturers registered softer increases in new business and output during August, albeit with rates of expansion remaining elevated by historical standards. One factor that supported the rise in purchasing activity was a moderation in cost pressures. Concurrently, demand resilience meant that firms were comfortably able to share additional cost burdens with their clients by lifting selling prices.

New business rose sharply midway through the second fiscal quarter, but the pace of expansion eased to a seven-month low. Panel members attributed the increase to advertising, brand recognition and healthy demand trends. Competitive conditions reportedly dampened growth.

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.'

Gainers & Losers:

Bajaj Finserv (up 3.42%), HCL Technologies (up 3.11%), Bajaj Finance (up 2.94%), Bajaj Auto (up 1.89%) and Hero MotoCorp (up 1.51%) were major Nifty gainers.

Dr Reddy's Laboratories (down 2.44%), Hindalco Industries (down 2.39%), Tata Motors (down 1.69%), NTPC (down 1.62%) and Mahindra & Mahindra (down 1.37%) were major Nifty losers.

Tata Motors slipped 1.69% 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.

Mahindra & Mahindra declined 1.37%. 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.

Bajaj Auto advanced 1.89% 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.

Hero MotoCorp rose 1.51% 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.

Stocks in Spotlight:

Maruti Suzuki India shed 0.33%. The auto major 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.

Ashok Leyland declined 1.81% after the company 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.

TVS Motor Company shed 0.73%. 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.

Escorts Kubota fell 2.10%. 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.

Coal India (CIL) slipped 1.16% after 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.

Global Markets:

European market declined while Most Asian stocks traded higher 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.

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