BROADER MKT UNDERPERFORMS; IT SHARES RALLY; VIX CLIMBS 4.57%

The headline equity benchmarks traded with modest gains in early afternoon trade. The Nifty hovered near the the 25,300 level. IT shares witnessed buying demand for the sixth consecutive trading session.

At 12:30 IST, the barometer index, the S&P BSE Sensex gained 244.21 points or 0.30% to 82,609.98. The Nifty 50 index added 60.05 points or 0.24% to 25,295.95.

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 0.14% and the S&P BSE Small-Cap index declined 0.54%. The S&P BSE Mid-Cap index hit an all-time high at 49,306.56.

The market breadth was negative. On the BSE, 1,738 shares rose and 2,197 shares fell. A total of 155 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.�

Derivatives:

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, rallied 4.57% to 14.01. The Nifty 29 August 2024 futures were trading at 25,369, at a premium of 73.05 points as compared with the spot at 25,295.95.

The Nifty option chain for the 26 September 2024 expiry showed maximum Call OI of 46 lakh contracts at the 25,000 strike price. Maximum Put OI of 63.9 lakh contracts were seen at 25,000 strike price.

Buzzing Index:

The Nifty IT index rose 1% to 43,215.20. The index rallied 5.17% in six consecutive trading sessions.

HCL Technologies (up 3.02%), L&T Technology Services (up 1.89%), Infosys (up 1.59%), Persistent Systems (up 1.34%), Tech Mahindra (up 1.3%), Mphasis (up 1.13%), Coforge (up 1.06%), Tata Consultancy Services (up 0.29%) advanced.

On the other hand, LTIMindtree (down 0.17%) and Wipro (down 0.08%), edged lower.

Stocks in Spotlight:

Mahindra & Mahindra declined 1.41%. 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.

Tata Motors slipped 1.83% 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.

TVS Motor Company shed 0.79%. 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.

Steel Strips Wheels (SSWL) rose 0.22%. 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.

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