Markets face a fall as China PMI hits 6-1/2-year low

Markets are likely to witness a weak opening mirroring declines in the Asian peers after China Caixin PMI fell to a six and a half year low citing fears about the health of China's economy. Meanwhile, US stocks closed on a dismal note as investors remain unnerved regarding the slump in oil prices and global growth concerns.

Despite a positive opening yesterday, the BSE Sensex closed 541.14 points, or 2.07 per cent, lower at 25,651.84. The Nifty 50 ended at 7,812, down 165 points, or 2.07 per cent, the most in two weeks. European stocks posted sharp falls, led by commodity and car companies with the pan-European Stoxx Europe 600 Index dropping over 2.2 per cent at 4.30 pm India time. 

STOCKS ON THE RADAR

Crisil has downgraded its outlook on BHEL long-term bank facilities to 'negative' from 'stable', saying that the company's project execution and profitability will remain vulnerable to structural issues plaguing the power sector.

The North American divisions of AAA Group, and Tech Mahindra have signed a pact to provide full end-to-end solution services to their aerospace and defence customers, according to media reports. 

L&T Halol Shamlaji Tollway, a 100% special purpose vehicle promoted by L&T Infrastructure Development Project, has defaulted on Rs 1014 crore payment to lenders which was due in August due to cash shortage due to low toll collections. 

MindTree has planned to invest nearly Rs 125 crore for the next two phases of expansion at its Bhubaneswar campus which has been built over 20 acres of land. 

Emami’s wholly-owned subsidiary Emami UK Ltd has been dissolved. "Emami UK Limited, a wholly-owned subsidiary of the company, has been dissolved as per the provisions of the laws of United Kingdom.

India's telecom operators have dismissed the government's call for penalising telcos for dropped calls and dismal mobile coverage, and have exhorted the sector regulator not to make such compensation to customers mandatory. Hence, telecom stocks are likely to stay in focus. 

Tata Motors is likely to be in focus on new launch. The company aggressively pushing its small commercial vehicle, the Magic Iris, as a replacement for the passenger three-wheeler. 

Motherson Sumi is likely to remain in focus on issues related to its largest customer Volkswagen, margin concerns in its European subsidiaries, China slowdown and muted growth in India.

GLOBAL STOCKS

Asian stocks declined as fears of global economic slowdown unnerved investors, Further, a weak factory survey from China dampened the sentiments.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 2%, with Australia down 1.8% and South Korea falling 1%. S&P mini futures fell 1% after the weak China PMI. Hong Kong’s Hang Seng dipped 2% while China’s Shanghai dropped 1.5%. Meanwhile, Japanese markets will remain closed today.

China's flash Caixin purchasing managers' index (PMI) fell to a six-and-ah-half-year low of 47.0 in September as aginst compares with a final reading of 47.3 in August.

Overnight on Wall Street, the Dow Jones industrial average fell 1.09%, the S&P 500 lost 1.23%, and the Nasdaq Composite fell 1.5% to 4,756.72.