Sensex drops 360 pts; Nifty hovers above 17,650

The key equity barometers continued to trade with minor losses in the mid-morning trade. Negative global cues dented the sentiments. The Nifty hovered above the 17,650 mark after hitting day`s low of 17,485.55 in the early trade. Realty, PSU bank and auto shares advanced while IT, oil & gas and FMCG stocks declined.

At 11:26 IST, the barometer index, the S&P BSE Sensex, was down 360.1 points or 0.60% to 59,176.97. The Nifty 50 index lost 95.65 points or 0.54% to 17,663.65.

In the broader market, the S&P BSE Mid-Cap index rose 0.53% while the S&P BSE Small-Cap index advanced 0.60%.

The market breadth was strong. On the BSE, 2,043 shares rose and 1,212 shares fell. A total of 164 shares were unchanged.

Economy:

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers` Index (PMI) was little-changed from July`s reading of 56.4, posting 56.2 in August 2022. It signalled the second-strongest improvement in operating conditions since last November.

The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted.

Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: �Indian manufacturers continued to benefit from the absence of COVID-19 restrictions, with rates of growth for both output and new orders picking up yet again to the strongest since last November.

"This robust performance was complemented by a fourth successive monthly slowdown in the rate of input cost inflation, which slipped to the lowest in a year amid softer pressures from commodity prices. Factory gate charges rose at the second-weakest pace since the start of fiscal year 2022/23, one that was similar to July.

"Firms welcomed the weaker increase in input costs with and upward revision to output forecasts amid renewed hopes that contained price pressures will help boost demand. Inflation concerns, which had dampened sentiment around mid-year, appear to have completely dissipated in August as seen by a jump in business confidence to a six-year high."

Buzzing Index:

The Nifty FMCG index declined 0.78% to 43,477.80. The index rose 2.5% in two trading sessions.

Among the components of the Nifty FMCG index, Dabur India (down 2.3%), Hindustan Unilever (down 1.64%), Nestle India (down 0.99%), Godrej Consumer Products (down 0.94%), ITC (down 0.92%), Procter & Gamble Hygiene and Health Care (down 0.74%), Britannia Industries (down 0.49%) and Colgate-Palmolive (India) (down 0.49%) were the losers.

On the other hand, Tata Consumer Products (up 2.54%), Emami (up 1.04%) and Marico (up 0.94%) edged higher.

Stocks in Spotlight:

Zee Entertainment Enterprises declined 2.78%. The media major said that it has entered into a strategic licensing agreement with Disney Star, by way of which it will gain licensing of the television broadcasting rights of the International Cricket Council`s Men`s and Under 19 global events. The company entered into this agreement for the period of four years.

SpiceJet dropped 4.20% after India`s low-cost carrier said that chief financial officer Sanjeev Taneja resigned amid widening losses. The company`s board on Wednesday (31 August) took note of resignation of Sanjeev Taneja, chief financial officer with effect from 31 August 2022. The board has also identified the candidate for appointment as chief financial officer of the company. The vacancy shall be filled in the month of September 2022 and the necessary disclosure regarding such appointment shall be made upon completion of all formalities.

M M Forgings (MMF) rallied 6.15% after the company announced that it has entered into a share subscription and shareholders` agreement (SSHA) with Abhinava Rizel to acquire 88% of the issued and paid up share capital of the company. The company said that it is investing in a start-up to produce EV powertrain components. The indicative time period for completion of acquisition is on or prior to 30 September 2022, it added.

Global markets:

Asian stocks declined on Thursday on concerns about aggressive rate hikes from global policymakers.

The results of a private survey showed China`s factory activity contracted in August. The Caixin/Markit manufacturing Purchasing Managers` Index came in at 49.5 for August, compared to 50.4 in July.

U.S. stocks ended lower on Wednesday as worries about aggressive interest rate hikes from the Federal Reserve persist.

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