Key equity indices witnessed selling pressure in early afternoon trade. At 12:23 IST, the barometer index, the S&P BSE Sensex, tumbled 448.52 points or 1.19% at 37,158.31. The Nifty 50 index lost 112.7 points or 1.02% at 10,960.10.
Weak domestic economic data and negative global cues weighed on sentiment. A surge in fresh coronavirus cases and intensifying US-China tensions also put pressure on stocks.
The broader market outperformed the benchmarks. The S&P BSE Mid-Cap index was up 0.43% while the S&P BSE Small-Cap index was gained 1.16%.
The market breadth was positive. On the BSE, 1,344 shares rose and 1,043 shares fell. A total of 166 shares were unchanged.
Foreign portfolio investors (FPIs) sold shares worth Rs 958.64 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 442.73 crore in the Indian equity market on 31 July, provisional data showed.
COVID-19 Update:
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Total COVID-19 confirmed cases worldwide stood at 18,080,067 with 689,370 deaths. India reported 5,79,357 active cases of COVID-19 infection and 38,135 deaths while 11,86,203 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, gained 2.91% to 24.8975. The Nifty August 2020 futures were trading at 10,976.70, at a premium of 6 points compared with the spot at 10,970.90.
On the weekly index options front, the Nifty option chain for 6 August 2020 expiry showed maximum Call OI of 33.60 lakh contracts at the 11,200 strike price. Maximum Put OI of 25.30 lakh contracts was seen at 11,000 strike price.
On the monthly index options front, the Nifty option chain for 27 August 2020 expiry showed maximum Call OI of 20.67 lakh contracts at the 11,500 strike price. Maximum Put OI of 35.21 lakh contracts was seen at 11,000 strike price.
Economy:
The seasonally adjusted IHS Markit India Manufacturing PMI fell to 46 in July, from 47.2 in June, and pointed to a marked deterioration in business conditions across the Indian manufacturing sector.
Commenting on the latest survey results, Eliot Kerr, Economist at IHS Markit, said: "Latest PMI data from Indian manufacturers shed more light on the state of economic conditions in one of the countries worst affected by the COVID-19 pandemic. The survey results showed a re-acceleration of declines in the key indices of output and new orders, undermining the trend towards stabilisation seen over the past two months. Anecdotal evidence indicated that firms were struggling to obtain work, with some of their clients remaining in lockdown, suggesting that we won't see a pick-up in activity until infection rates are quelled and restrictions can be further removed."However, on a more positive note, firms remained optimistic, with confidence towards future activity continuing to strengthen during July."
India's fiscal deficit reached Rs 6.62 lakh crore, or 83.2% of the budgeted estimate in the quarter ended June. The gap between the revenue and expenditure during the same period in 2019-20 stood at 61.4% of the budgeted target.
GST collections in July fell to Rs 87,422 crore from Rs 90,917 crore in June, according to a Finance Ministry statement. However, July collections are higher than Rs 62,009 crore in May and Rs 32,294 crore in April.
India's infrastructure output contracted 15% in June from a year earlier, government data released on Friday showed, as a lockdown in response to COVID-19 weighed on economic activities. Infrastructure output, which comprises eight sectors including coal, crude oil and electricity and accounts for nearly 40% of industrial output, contracted 24.6% in the three months through June - the first quarter of the fiscal year - from a year earlier, the data showed.
Buzzing Index:
The Nifty Pharma index extended gained 1.9% to 11,360.50. The index is up about 13% in five trading sessions.
Divi's Laboratories (up 4.14%), Alkem Laboratories (up 3.96%), Torrent Pharmaceuticals (up 3.05%), Dr. Reddy's Laboratories (up 2.95%), Cadila Healthcare (up 2.14%), Lupin (up 2.12%) and Biocon (up 1.28%) were top gainers in pharmaceutical space.
Stocks in Spotlight:
The state-run coal major reported 3% decline in production to 37.36 million tonnes in July 2020 as against 38.51 million tonnes in July 2019. Coal offtake declined 6.9% to 43.39 million tonnes in July 2020 compared with 46.59 million tonnes in July 2019. On a month-on-month basis, coal production slipped 4.69% and coal offtake advanced 4.27% compared with last month. The disclosure was made on Saturday, 1 August 2020.
NMDC up 1.43%. The state miner's total production was up 13% year on year to 2.19 million tonne (MT) while total sales in July were up 7% YoY to 2.57 MT.
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