INDICES NUDGE LOWER IN EARLY TRADE; BREADTH WEAK

The domestic equity benchmarks traded with modest losses in early trade. The Nifty traded below the 25,800 level. Media, metal and oil & gas shares declined while FMCG, private bank, IT shares edged higher.

At 09:30 IST, the barometer index, the S&P BSE Sensex, slipped 223.59 points or 0.29% to 80,946.61. The Nifty 50 index fell 75.30 points or 0.30% to 24,776.85.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index fell 0.96% and the S&P BSE Small-Cap index declined 1.30%.

The market breadth was weak. On the BSE, 1,020 shares rose and 2,173 shares fell. A total of 151 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 620.95 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 2,121.53 crore in the Indian equity market on 6 September 2024, provisional data showed.

Stocks in Spotlight:

Nazara Technologies advanced 1.30% after the company informed that it has acquired a 48.42% stake in Paperboat for Rs 300 crore. The company has paid Rs 225 core in first tranche. The remaining balance will be paid in the manner outlined in the agreement.

Suzlon Energy declined 1.27%. The company has completed the acquisition of 51% of the equity capital of Renom. With the said acquisition, Renom has now become subsidiary of the company.

Spicejet rallied 4.78% after the company informed that it has entered into a term sheet agreement with Carlyle Aviation management to restructure its aircraft lease obligations. The company will issue shares to Carlyle Aviation to convert dues into equity. Carlyle Aviation to purchase SpiceJet shares to settle a part of its dues worth $137.68 million. Restructuring deal with Carlyle Aviation to cut SpiceJet`s dues from $137.68 million to $97.51 million. With this, SpiceJet will convert Carlyle Aviation`s dues worth $40 million into equity.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper jumped 1.69% to 6.970 as compared with previous close 6.854.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.9600, compared with its close of 83.9525 during the previous trading session.

MCX Gold futures for 4 October 2024 settlement rose 0.16% to Rs 71,520.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.08% to 101.26

The United States 10-year bond yield gained 0.93% to 3.740.

In the commodities market, Brent crude for November 2024 settlement added 84 cent or 1.18% to $71.90 a barrel.

Global Markets:

Most Asian stocks declined on Monday as selling pressure intensified, triggered by a weaker-than-expected US jobs report and the looming Fed meeting. Concerns about a slowdown in China and Germany further fueled the decline in stocks, which were already volatile due to anticipated Fed rate cuts.

The US non-farm payrolls increased by only 142,000 in August, falling short of the expected 165,000. This marked the lowest three-month average since mid-2020. Although the unemployment rate decreased to 4.2%, it was the first drop in five months.

In China, the consumer price index rose by 0.6% year-on-year in August, primarily due to declines in transportation, home goods prices, and rents.

Meanwhile, US markets suffered a significant setback on Friday. The S&P 500 experienced its worst week since March 2023, as investors grappled with the implications of the weak jobs report and abandoned leading technology stocks. The broad index declined by 1.73%, while the Nasdaq Composite shed 2.55%. The Dow Jones Industrial Average fell 1.01%. Megacap tech stocks took a particularly hard hit as investors dumped risk assets amidst growing concerns about the US economy`s health.

Investors widely anticipate the Fed to lower interest rates by at least a quarter-percentage point at its upcoming policy meeting. However, the softening labor market trends have increased speculation that the central bank might opt for a more aggressive cut. Traders remain divided on whether the Fed will cut by a quarter- or half-percentage point.

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