Market Commentary - Mid-Session
Nifty holds 25,200 level; PSU bank stocks rally for 3rd day As on : 02-Sep-24  14:32

The key equity benchmarks pared some gains and traded with small gains in the mid-afternoon trade. The Nifty traded above the 25,200 level. PSU bank stocks advanced for the three consecutive trading sessions.

At 14:30 IST, the barometer index, the S&P BSE Sensex rose 145.47 points or 0.18% to 82,513.24. The Nifty 50 index rose 26.10 points or 0.10% to 25,226.20.

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 0.08% and the S&P BSE Small-Cap index declined 0.55%. The S&P BSE Mid-Cap index hit an all-time high at 49,306.56.

The market breadth was negative. On the BSE, 1,694 shares rose and 2,309 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.'

Buzzing Index:

The Nifty PSU Bank index rose 0.77% to 7,039.30. The index added 1.22% in the three consecutive trading sessions.

Indian Bank (down 2.26%), UCO Bank (down 1.18%), Central Bank of India (down 1.15%), Bank of Maharashtra (down 1.04%), Punjab & Sind Bank (down 0.91%), Indian Overseas Bank (down 0.71%), Canara Bank (down 0.56%), Bank of India (down 0.53%), Punjab National Bank (down 0.34%) declined.

On the other hand, Bank of Baroda (up 0.68%) ,State Bank of India (up 0.32%) and Union Bank of India (up 0.22%) advanced.

Numbers to Track:

The yield on India's 10-year benchmark federal advanced 1.92% to 6.995 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 83.9150, compared with its close of 83.8582 during the previous trading session.

MCX Gold futures for 4 October 2024 settlement rose 0.15% to Rs 71,715.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.07% to 101.63.

The United States 10-year bond yield jumped 0.80% to 3.940.

In the commodities market, Brent crude for November 2024 settlement added 5 cent or 0.06% to $76.98 a barrel.

Stocks in Spotlight:

NBCC (India) added 1.23% after the PSU company informed that it has bagged orders worth Rs 182.50 crore from Oil India and Indian Statistical Institute Delhi Centre, Delhi. The project involves execution of new works relating to construction of two multi-stories residential building G+6 office building and recreation center with auditorium facility at oil pipeline headquarters (PHQ) at Guwahati, Assam.

Sandur Manganese & Iron Ores fell 2.62%. The company announced that the Ministry of Environment, Forest, and Climate Change (MoEFCC) has granted Environmental Clearance (EC) for its Ramghad Manganese & Iron Ore Mines. The EC permits iron ore production of 0.216 million tonnes per annum (MTPA) from the Ramghad mine. Existing manganese ore production of 0.05 MTPA will remain unchanged, with a total excavation of 1.297 MTPA including waste.

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