INDICES TRADE WITH SMALL GAINS; EUROPEAN MKT OPENS HIGHER

The key equity indices traded with minor gains in early-afternoon trade. The Nifty hovered above the 25,400 level. Media, PSU bank and auto shares declined while consumer durables, IT and private bank stocks advanced.

At 13:28 IST, the barometer index, the S&P BSE Sensex advanced 90.87 points or 0.11% to 83,079.65. The Nifty 50 index rose 38.65 points or 0.15% to 25,422.40.

In the broader market, the S&P BSE Mid-Cap index fell 0.01% and the S&P BSE Small-Cap index shed 0.40%.

The market breadth was weak. On the BSE, 1,582 shares rose and 2,298 shares fell. A total of 114 shares were unchanged.

Economy:

The annual rate of inflation based on all India Wholesale Price Index (WPI) number is 1.31% (Provisional) for the month of August, 2024 (over August, 2023). Positive rate of inflation in August, 2024 is primarily due to increase in prices of food articles, processed food products, other manufacturing, manufacture of textiles and manufacture of machinery & equipment etc. However, this is the lowest WPI inflation in last four months.

Gainers & Losers:

Hero Motocorp (up 2.95%), Bajaj Auto (up 1.93%), Britannia Industries (up 1.68%), Bharti Airtel(up 1.50%) and NTPC(up 1.05%) were major Nifty gainers.

Tata Motors (down 2.39%), Bharat Petroleum Corporation (down 1.12%), Eicher Motors (down 1.11%), Asian Paints (down 0.85%) and Maruti Suzuki India (down 0.84%) were major Nifty losers.

Stocks in Spotlight:

Droneacharya Aerial Innovations declined 2.54%. The company said that it has secured an export order for the supply of Drone components for heavy payload logistic drones, valued at USD 240,000.

Carborundum Universal (CUMI) rallied 3.28% after the company entered into share purchase agreement (SPA) to acquire 100% stake in Silicon Carbide Products (SCP), Inc. USA for total consideration of Rs 56 crore.

Firstsource Solutions added 1.12% after the company announced collaboration with Microsoft to deliver cutting-edge digital transformation services to clients worldwide.

JBM Auto shed 0.28%. The company informed that its wholly-owned subsidiary, JBM Ecolife Mobility has successfully secured a $100 million strategic funding from the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB).

Global markets:

European market advanced as investors will keep an eye on upcoming central bank meetings.

Most of Asia-Pacific markets traded higher on Tuesday as investors waiting for the Federal Reserve to kick off its monetary loosening cycle.

Regional markets were influenced by a mixed performance on Wall Street, where technology stocks pulled down the Nasdaq Composite. Conversely, the Dow Jones Industrial Average reached a new high, driven by optimism about lower interest rates.

Trading volumes were subdued due to market holidays in China and South Korea. Sentiment towards China was dampened by concerns about a potential escalation in trade tensions with the West.

The Fed is set to meet Tuesday and Wednesday and is widely anticipated to lower rates for the first time since it began its hiking cycle in March 2022. Markets are pricing in at least 100 basis points of cuts this year.

In the United States, the S&P 500 gained 0.13%, while the Dow Jones Industrial Average rose 0.55%, notching a record close. The tech-heavy Nasdaq Composite declined by 0.52%.

Apple shares fell by 2.8% following analyst reports suggesting weaker demand for iPhone 16 Pro models compared to the previous year. Chip stocks, such as Nvidia, which led the market rebound last week, also faced selling pressure as investors took profits.

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