BROADER MKT OUTPERFORMS; FINANCIAL SERVICES SHARES UNDER PRESSURE

The key equity indices traded with limited losses in the mid-afternoon trade. The Nifty traded below the 24,400 level after hitting the day�s high of 24,504.25 in early trade. Financial services shares extended loss for the two consecutive trading sessions.

At 14:30 IST, the barometer index, the S&P BSE Sensex, was down 358.86 points or 0.44% to 80,088.97. The Nifty 50 index declined 91 points or 0.37% 24,392.75.

The broader market outperformed the headline indices. The S&P BSE Mid-Cap index rose 0.60% and the S&P BSE Small-Cap index added 1.60%.

The market breadth was strong. On the BSE, 2,703 shares rose and 1,136 shares fell. A total of 120 shares were unchanged.

Economy:

Seasonally adjusted index, HSBC Flash India Composite Output Index rose from 60.9 in June to 61.4 at the start of the second fiscal quarter. Growth strengthened at goods producers and service providers, with the former leading the upturn, the strongest rate of expansion for three months.

HSBC Flash India Manufacturing PMI stood at 58.5 in July as against 58.3 in June, signalling a historically strong improvement in the health of the sector. Anecdotal evidence suggested that favourable market conditions and new business gains underpinned the upturn in private sector activity.

HSBC Flash India Services PMI Business Activity Index stood at 61.1 in July as compared with 60.5 in June while HSBC Flash India Manufacturing PMI Output Index increased to 62.2 in July from 61.9 in June.

The latest results also revealed that rising material and labour costs added to inflationary pressures. In particular, selling prices rose to the greatest extent since February 2013.

Pranjul Bhandari, Chief India Economist at HSBC, said: �The Flash Composite Output Index signalled continued robust growth in India�s private sector. The rise in output in July was led by a further increase in business activity in the manufacturing sector, while the pace of expansion in services output also accelerated and remained well above its long-run average. As a result, companies turned more optimistic in July, following a moderation in business confidence in June. We note that the rate of input cost inflation continued to trend higher in both sectors, which has driven firms to keep raising sales prices.�

Buzzing Index:

The Nifty Financial Services index fell 1.16% to 23,034.75. The index declined 2.50% in the two trading sessions.

Bajaj Finserv (down 3.03%), Axis Bank (down 2.58%), Bajaj Finance (down 2.07%), Shriram Finance (down 1.72%) and State Bank of India (down 1.55%), Kotak Mahindra Bank (down 1.53%), HDFC Bank (down 1.29%), ICICI Bank (down 1.14%), Cholamandalam Investment & Finance Company (down 0.82%) and IDFC (down 0.77%) slipped.

On the other hand, ICICI Prudential Life Insurance Company (up 7.57%) ,HDFC Life Insurance Company (up 3.61%) and LIC Housing Finance (up 2.41%) advanced.

Numbers to Track:

The yield on India`s 10-year benchmark federal rallied 1.65% to 7.085 as compared with previous close 6.970.

In the foreign exchange market, the rupee lower against the dollar. The partially convertible rupee was hovering at 83.7125, compared with its close of 83.6950 during the previous trading session.

MCX Gold futures for 5 August 2024 settlement rose 0.42% to Rs 68,794.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.06% to 104.51.

The United States 10-year bond yield shed 0.02% to 4.238.

In the commodities market, Brent crude for September 2024 settlement added 59 cents or 0.73% to $81.60 a barrel.

Stocks in Spotlight:

Thyrocare Technologies zoomed 16% after the healthcare service provider reported 39.71% increase in consolidated net profit to Rs 24.17 crore in Q1 FY25 from Rs 17.30 crore posted in Q1 FY24. Revenue from operations grew by 16.32% year on year (YoY) to Rs 156.91 crore in the quarter ended 30 June 2024.

Schaeffler India rallied 5.87% after the company reported 6.82% increase in standalone net profit to Rs 253.54 crore in Q2 CY24 as against Rs 237.2 crore posted in Q2 CY23. Revenue from operations jumped 13.27% year on year (YoY) to Rs 2,071.9 crore in Q2 CY24.

Bajaj Finserv declined 2.53%. The company�s consolidated net profit jumped 10.04% to Rs 2,137.70 crore on a 35.22% increase in total income to Rs 31,480.14 crore in Q1 FY25 over Q1 FY24.

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