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Weak market breadth

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Capital Market
Last Updated : Sep 24 2018 | 4:31 PM IST

The market further extended losses and hit fresh intraday low in mid-morning trade. At 11:23 IST, the barometer index, the S&P BSE Sensex, was down 248.23 points or 0.67% at 36,593.37. The Nifty 50 index was down 81.05 points or 0.73% at 11,062.05.

Broader market tumbled. Among secondary barometers, the BSE Mid-Cap index was down 1.86%. The BSE Small-Cap index was down 1.87%.

The market breadth, indicating the overall health of the market, was weak. On BSE, 552 shares rose and 1768 shares fell. A total of 110 shares were unchanged.

Most FMCG shares declined. Godrej Consumer Products (down 2.94%), Dabur India (down 2.43%), Bajaj Corp (down 2.2%), Britannia Industries (down 1.91%), GlaxoSmithKline Consumer Healthcare (down 1.84%), Procter & Gamble Hygiene & Health Care (down 1.32%) and Jyothy Laboratories (down 0.83%), edged lower. Tata Global Beverages (up 0.21%), Hindustan Unilever (up 0.72%), Colgate Palmolive (India) (up 1.02%) and Marico (up 1.25%), edged higher.

Metal shares were mixed. Hindustan Copper (down 1.62%), Jindal Steel & Power (down 1.19%), NMDC (down 0.52%), Hindustan Zinc (down 0.27%) and Steel Authority of India (down 0.26%), edged lower. JSW Steel (up 0.29%), National Aluminium Company (up 0.38%), Hindalco Industries (up 1.50%) and Vedanta (up 2.92%), edged higher.

Tata Steel was down 1.15%. The company announced that it has executed definitive agreements for acquisition of the steel business of Usha Martin (UML) through a slump sale on a going concern basis. The closing of the acquisition is subject to fulfilment of various conditions under the agreements. At the closing, Tata Steel or any of its subsidiaries or affiliates may carry out this acquisition. The parties shall jointly work towards fulfilment of conditions precedent which are largely regulatory approvals required for the transfer of the business undertaking. All the employees pertaining to the steel business will transfer as part of the acquisition.

The steel business undertaking of UML inter-alia comprises of a specialized ~1.0 mtpa alloy based manufacturing capacity in long products segment based in Jamshedpur, a producing iron-ore mine, a coal mine under development and captive power plants. The acquisition is part of the overall strategy to build capability in long products and expand product offerings including high-value added products. The announcement was made on Saturday, 22 September 2018.

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Overseas, most Asian stocks were trading lower. The markets in Japan, South Korea and China are closed for public holidays on Monday.

The US-China trade war remained in focus Monday, with tariffs from both parties due to go into effect. Washington has announced 10% duties on $200 billion of Chinese imports, which prompted Beijing to respond with tariffs on $60 billion of US goods. On Friday, the media reported that China had called off planned trade talks with the US in the wake of a new round of duties.

In US, the Dow Jones Industrial Average on Friday notched a second straight all-time high, but a slump in technology and internet-related stocks weighed on the broader market, pressuring the Nasdaq.

In the latest US data, a reading on the manufacturing sector rose to 55.6 in September from the previous reading of 54.7. A report on the services sector dipped to 52.9 from 54.8. Both are from IHS Markit.

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First Published: Sep 24 2018 | 11:23 AM IST

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