INDICES TRADE WITH MINOR LOSSES; BANK SHARES UNDER PRESSURE

The domestic equity benchmarks traded with modest losses in the mid-morning trade. The Nifty traded below the 24,450 mark. Bank shares declined for the two consecutive trading sessions.

At 11:30 IST, the barometer index, the S&P BSE Sensex, was down 293.34 points or 0.37% to 80,132.17. The Nifty 50 index declined 70.75 points or 0.29% to 24,408.30.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.46% and the S&P BSE Small-Cap index added 1.53%.

The market breadth was strong. On the BSE, 2,681 shares rose and 1,003 shares fell. A total of 148 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 Bank index fell 1.08% to 51,221. The index declined 2.02% in the two trading sessions.

Bandhan Bank (down 2.29%), Axis Bank (down 1.42%), ICICI Bank (down 0.92%), Federal Bank (down 0.91%) and State Bank of India (down 0.87%), IndusInd Bank (down 0.83%), IDFC First Bank (down 0.78%), HDFC Bank (down 0.61%), Bank of Baroda (down 0.54%) and Punjab National Bank (down 0.37%) edged lower.

Stocks in Spotlight:

Hindustan Unilever fell 1.55%. The company reported 2.67% rise in standalone net profit to Rs 2,538 crore in Q1 FY25 as compared to Rs 2,472 crore recorded in Q1 FY24. Revenue from operations was at Rs 15,166 crore in Q1 FY25, up 1.57% from Rs 14,931 crore reported in the same period a year ago.

Shilpa Medicare rose 0.47%. The company�s unit manufacturing facility in Karnataka received GMP certification from COPERIS-Mexico. The inspection was conducted from 6 November to 10 November 2024.

Global Markets:

Asian shares tumbled on Wednesday after major US technology companies, including Tesla and Alphabet, released underwhelming earnings reports.

Adding to the negative sentiment, Japanese manufacturing activity unexpectedly contracted in July, according to the au Jibun Bank flash manufacturing PMI. This data, coupled with ongoing frustration over the Bank of Japan`s low-interest-rate policy, is putting pressure on the central bank to address inflation concerns.

In the US, stocks closed slightly lower on Tuesday as investors digested mixed corporate earnings reports and kept a close watch on the evolving presidential election. The broad-based S&P 500 declined 0.16%, while the tech-rich Nasdaq Composite Index dipped 0.06%. The Dow Jones Industrial Average declined 0.14%

The Federal Reserve`s preferred inflation gauge, the PCE data, and US GDP data are both expected to be released later this week, potentially impacting interest rate expectations.

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