After range bound movement in morning trade, key benchmark indices trimmed losses in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently hovering above the psychological 26,000 level. Earlier, the Sensex regained the psychological 26,000 level after falling below that level in early trade. The Sensex was currently off 189.62 points or 0.72% at 26,093.47. The broad market depicted weakness. There were more than two losers against every gainer on BSE.
Data showing slowdown in growth in India's gross domestic product (GDP) growth to 7% in Q1 June 2015 from 7.5% in Q4 March 2015 weighed on investor sentiment. Weakness in Asian stocks also weighed on domestic bourses. Trading in US index futures indicated a weak opening of US stocks later in the global day.
Bank stocks declined. Maruti Suzuki India fell after declaring monthly sales volume data for August 2015.
In overseas markets, Asian stocks edged lower after twin surveys showed China's manufacturing sector in the grip of its worst slump in several years, raising fresh fears about the health of its economy. US stocks declined yesterday, 31 August 2015, reflecting continuing concerns about the Chinese economy and uncertainty over US interest rates.
At 11:21 IST, the S&P BSE Sensex was down 189.62 points or 0.72% at 26,093.47. The index lost 298.81 points at the day's low of 25,984.28 in early trade, its lowest level since 27 August 2015. The index fell 142.02 points at the day's high of 26,141.07 at the onset of the trading session.
The CNX Nifty was down 58.75 points or 0.74% at 7,912.55. The index hit a high of 7,929.10 in intraday trade. The index hit a low of 7,886.15 in intraday trade, its lowest level since 27 August 2015.
The market breadth indicating the overall health of the market was quite weak. There were more than two losers against every gainer on BSE. 1,466 shares declined and 703 shares rose. A total of 66 shares were unchanged.
The BSE Mid-Cap index was off 72.84 points or 0.68% at 10,661.58. The BSE Small-Cap index was off 28.63 points or 0.26% at 10,942.64. The fall in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 778 crore by 11:15 IST compared with turnover of Rs 566 crore by 10:15 IST.
Maruti Suzuki India shed 0.9%. Maruti Suzuki India during market hours today, 1 September 2015, announced that total vehicle sales rose 6.4% to 1.17 lakh units in August 2015 over August 2014. Domestic sales rose 8.6% to 1.06 lakh units in August 2015 over August 2014. Exports fell 11.1% to 11,083 units in August 2015 over August 2014.
Bank stocks declined. ICICI Bank shed 0.68%. State Bank of India (SBI) declined 1.78%. The Reserve Bank of India (RBI) after market hours yesterday, 31 August 2015, announced the designation of SBI and ICICI Bank as Domestic Systemically Important Banks (D-SIBs). Under this framework, the additional Common Equity Tier 1 (CET1) requirements as a percentage of Risk Weighted Assets (RWAs) applicable to ICICI Bank is 0.2% while for State Bank of India (SBI) it is 0.6%. The additional Common Equity Tier 1 (CET1) requirements applicable to D-SIBs will be applicable from 1 April 2016 in a phased manner and would become fully effective from 1 April 2019. The additional CET1 requirement will be in addition to the capital conservation buffer.
This is the first time that the RBI has named D-SIBs. The RBI will release the list of D-SIBs every year.
Among private bank stocks, Kotak Mahindra Bank (down 1.84%), Axis Bank (down 1.91%), IndusInd Bank (down 2.27%) and Yes Bank (down 2.83%) declined.
HDFC Bank lost 1.62% on reports the bank has slashed base rate by 35 basis points to 9.35% from 9.7% earlier.
Among PSU bank stocks, Punjab National Bank (down 3%), IDBI Bank (down 2.06%), Bank of India (down 2.32%) and Union Bank of India (down 2.23%) dropped.
Canara Bank fell 2.55% after the bank said its board of directors approved reduction in the base rate by 10 basis points to 9.9% from 10% with effect from 3 September 2015. The announcement was made after market hours yesterday, 31 August 2015.
Bank of Baroda lost 1.71% to Rs 181.50 after the bank said it has fixed issue price at Rs 192.74 per share for preferential allotment of shares to the Government of India (GoI). GoI will infuse capital funds to the tune of Rs 1786 crore in Bank of Baroda through the preferential allotment of equity shares.
On the macro front, India's gross domestic product (GDP) growth at constant (2011-12) prices slowed down to 7% in Q1 June 2015 from 7.5% growth recorded in Q4 March 2015, government data released after market hours yesterday, 31 August 2015 showed. Quarterly gross value added (GVA) at Basic Price at constant (2011-2012) prices exhibited recovery in growth to 7.1% in Q1 June 2015 from 6.1% growth recorded in Q4 March 2015.
Another data released by government after market hours yesterday, 31 August 2015 showed that the Eight Core Industries, carrying 38% weight in the Index of Industrial Production (IIP), recorded 1.1% growth in July 2015, showing moderation from 3% growth recorded in the previous month. Its cumulative growth during April to July, 2015-16 was 2.1%.
In overseas markets, Asian stocks edged lower today, 1 September 2015, after activity in China's manufacturing sector slowed markedly in August, twin surveys showed today, 1 September 2015, the latest sign that the world's second largest economy is fast losing momentum. Key benchmark indices in Singapore, Taiwan, Japan, Indonesia and South Korea fell by 0.51% to 1.75%.
Chinese shares declined after twin surveys showed China's manufacturing sector in the grip of its worst slump in several years, raising fresh fears about the health of its economy. In mainland China, the Shanghai Composite was off 1.75%. In Hong Kong, the Hang Seng index was off 0.79%.
The final Caixin/Markit manufacturing purchasing managers' index (PMI) slipped to 47.3 in August, the lowest reading since March 2009 and down from 47.8 in July. The reading, however, was a slightly better than the flash reading of 47.1. A reading above 50 indicates an expansion in manufacturing activity, while a reading below points to a contraction.
China's official manufacturing purchasing managers index (PMI) slipped to 49.7 in August, the weakest level since August 2012, down from 50 in July. This is the first time the official PMI has fallen below 50 in six months. China's official nonmanufacturing PMI, also released today, 1 September 2015 fell to 53.4 in August from 53.9 in July.
Chinese markets will be closed on 3 and 4 September 2015 when China will stage a parade to display its military prowess, despite a deteriorating economy.
Trading in US index futures indicated that the Dow could slide 243 points at the opening bell today, 1 September 2015. There is uncertainty in global markets as to the timing of the first interest rate hike in a decade from the US Federal Reserve.
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