The market ended steeply lower on Tuesday, after data last week showed India's gross domestic product (GDP) growth moderated to 5% in Q1 June 2019.
The barometer index, the S&P BSE Sensex, fell 769.88 points or 2.06% to 36,562.91. The Nifty 50 index fell 225.35 points or 2.04% to 10,797.90.
The Nifty opened below 11,000 mark and extended losses as the session progressed. Selling exacerbated in the last hour of the trade, which dragged the barometer below 10,800 mark.
The S&P BSE Small-Cap index fell 1.65%. The S&P BSE Mid-Cap index fell 1.32%.
The market breadth was weak. On the BSE, 817 shares rose and 1613 shares fell. A total of 178 shares were unchanged.
India's gross domestic product (GDP) growth moderated to 25-quarters low of 5% in Q1 of 2019-20 from 5.8% growth recorded in the previous quarter and 8% improvement in the corresponding quarter last year.
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The IHS Markit India Manufacturing PMI was reported at 51.4 in August from 52.5 in July.
Meanwhile, growth of eight core industries dropped to 2.1% in July 2019 compared with 7.3% in July 2018. The data was announced after market hours on Friday, 30 August 2019.
The fiscal deficit of central government increased 1.4% to Rs 547605 crore in April-July 2019-20. The fiscal deficit as a percentage of full year estimate stood at 77.8% in April-July 2019-20 compared with 86.5% touched in the corresponding period of last year.
Overseas, European shares were trading lower on Tuesday, with British opposition lawmakers bidding to seize control of the House of Commons and stop the UK leaving the European Union without a deal on October 31.
Asian markets closed on a mixed note. The US-China trade tensions continue to rise after China lodged a complaint against the United States at the World Trade Organization over US import duties.
US stock exchanges were closed on Monday for Labor Day holiday. US stocks ended with a lackluster session on Friday as investors were cautious ahead of a holiday weekend in which a fresh round of US tariffs on Chinese imports were due to be levied.
US President Donald Trump said the sides would still meet for talks later this month. Trump said his goal was to reduce US reliance on China and he again urged American companies to find alternate suppliers outside China.
The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - as China began imposing new duties on US crude, the latest escalation in a bruising trade war.
On the equity front back home, ICICI Bank (down 4.45%), HDFC (down 3.67%), Reliance Industries (down 3.40%), Larsen & Toubro (down 2.56%) and HDFC Bank (down 0.88%) declined.
Shares of PSU banks were in action after Finance Minister Nirmala Sitharaman announced on Friday, 30 August 2019, that ten public sector banks will be merged into four.
Punjab National Bank (PNB) (down 8.55%), Oriental Bank of Commerce (OBC) (down 8.10%) and United Bank of India (up 0.38%), will be merged to create second largest PSU bank in India with business of Rs 17.94 lakh crore. It will have second largest banking network in India with 11,437 branches.
Canara Bank (down 10.59%) and Syndicate Bank (down 1.08%) will be merged to create fourth largest public sector bank with business of Rs 15.20 lakh crore. The entity will have third largest branch network in India with 10,342 branches.
Union Bank of India (down 9.08%), Corporation Bank (down 3.98%) and Andhra Bank (up 0.51%) will be merged to create fifth largest public sector bank with business of Rs 14.59 lakh crore. The entity will have fourth largest branch network in India with 9,609 branches.
Indian Bank (down 12.26%) and Allahabad Bank (down 5.67%) will be merged to create seventh largest public sector bank with business of Rs 8.08 lakh crore. The entity will have nationwide presence with strong networks in the South, North and East.
IDBI Bank surged 7.66% to settle at Rs 28.80 after the Union Cabinet approved an infusion of Rs 4,557 crore in the bank by the government. IDBI Bank needs a one time infusion of capital to complete the exercise of dealing with its legacy book. Of the Rs 9,300 crore needed, LIC would meet 51% (Rs 4,743 crore). Remaining 49%, amounting to Rs 4,557 crore, is proposed from government as its share on one time basis.
The said capital infusion will help in completing the process of IDBI Bank's turnaround and enable it to return to profitability and normal lending, and giving government the option of recovering its investment at an opportune time.
Private sector lender Yes Bank fell 1.18% to Rs 58.80. The bank's board has approved a proposal to increase the bank's authorised share capital to Rs 1,100 crore from Rs 800 crore.
Most auto shares declined after weak sales in August. Tata Motors fell 3.51%. The company's total sales fell 48.41% to 32,343 units in August 2019 over August 2018.
Maruti Suzuki India fell 1.28%. The company's total sales fell 32.7% to 106,413 units in August 2019 over August 2018. Its total production fell 33.99% to Rs 1,11,370 crore in August 2019 over August 2018.
Eicher Motors fell 2.75%. VE Commercial Vehicles, an unlisted subsidiary of Eicher Motors, reported 41.7% decline in total sales to 3538 units in August 2019 over August 2018.
Royal Enfield, the two-wheeler division of Eicher Motors, reported 24% decline in total sales to 52,904 units in August 2019 over August 2018.
Bajaj Auto fell 0.70%. The company's total sales fell 5% to 381,530 units in August 2019 over August 2018.
Hero Motocorp fell 0.58%. The company's total sales fell 20.68% to 5,43,406 units in August 2019 over August 2018.
TVS Motor Company rose 1.97%. The total sales rose 3.93% to 2.9 lakh units in August 2019 as against sales of 2.79 lakh in July 2019. Total sales declined 15.37% to 2.90 lakh units in August 2019 compared with 3.43 lakh units in August 2018.
Mahindra & Mahindra (M&M) fell 2.52%. The company's total auto sector sales fell 25% to 36,085 units in August 2019 over August 2018.
M&M's Farm Equipment Sector (FES) reported 17% decline in total sales to 14,817 units in August 2019 over August 2018.
Ashok Leyland rose 1.40%. The auto makers' total vehicle sales declined 47% in August 2019 compared with 17,386 units in August 2018.
IT shares advanced on weak domestic currency. Tech Mahindra (up 1.24%) and HCL Technologies (up 0.75%) rose.
Infosys ended almost flat at Rs 814.30. The stock hit a record high of Rs 822.30 in intraday today.
TCS fell 0.26% to Rs 2252.25. The stock hit a record high of Rs 2296 in intraday today.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 72.38, compared with its close of 71.42 during the previous trading session.
A weak rupee boosts revenues of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Shares of HDFC Asset Management Company (HDFC AMC) jumped 3.57% to Rs 2649.75. The stock hit an intraday high of Rs 2697.35 which is also a record high for the counter.
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