SENSEX SLIDES 493 PTS; EUROPEAN MKT DECLINES

The frontline indices continued to trade with significant losses in afternoon trade. The Nifty traded below the 24,350 mark after hitting the day�s high of 24,504.25 in early trade. Banking, financial services and FMCG shares declined while media, oil & gas and consumer durables shares advanced.

At 13:27 IST, the barometer index, the S&P BSE Sensex, was down 493.33 points or 0.63% to 79,918.92. The Nifty 50 index declined 133.40 points or 0.54% to 24,345.65.

The broader market outperformed the headline indices. The S&P BSE Mid-Cap index rose 0.56% and the S&P BSE Small-Cap index gained 1.59%.

The market breadth was strong. On the BSE, 2,650 shares rose and 1,149 shares fell. A total of 127 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.�

Gainers & Losers:

HDFC Life Insurance Company (up 3.59%), Oil & Natural Gas Corporation (up 2.16%), Coal India (up 2.08%), Tata Motors (up 1.98%) and Tech Mahindra (up 1.86%) were major Nifty gainers.

Bajaj Finserv (down 3.05%), Bajaj Finance (down 2.28%), Axis Bank (down 2.20%), Tata Consumer Products (down 2.01%) and Britannia Industries (down 1.78%) were major Nifty losers.

Stocks in Spotlight:

ICICI Securities shed 0.48%. The broking firm�s consolidated net profit zoomed 94.55% to Rs 526.91 crore in Q1 FY25 as against Rs 270.84 crore recorded in Q1 FY24. Total income was at Rs 1,644.11 crore in the quarter ended 30 June 2024, registering a growth of 75.95% year on year (YoY).

Schaeffler India rallied 5.91% after the company reported 6.82% increase in standalone net profit to Rs 253.54 crore in Q2 CY24 as against Rs 237.2 crore posted in Q2 CY23. Revenue from operations jumped 13.27% year on year (YoY) to Rs 2,071.9 crore in Q2 CY24.

Tata Teleservices (Maharashtra) advanced 1.76%. The company reported a net loss of Rs 323.40 crore in Q1 FY25 as against a net loss of Rs 301.18 crore recorded in Q1 FY24. Revenue from operations during the period under review increased by 13.31% year-over-year (YoY) to Rs 323.50 crore.

United Spirits rallied 5.40% after the spirits maker`s standalone net profit jumped 25.63% to Rs 299 crore in Q1 FY25 as against Rs 238 crore posted in Q1 FY24. Revenue from operations (excluding excise duty) stood at Rs 2,352 crore in Q1 FY25, up 8.29% from Rs 2,172 crore recorded in the same period a year ago.

Bajel Projects surged 8.11% after the company announced that it has secured a Rs 586.28 crore contract from Power Grid Corporation of India for the supply of goods and services.

Global Markets:

European and 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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