Negative market breadth

Key benchmark indices continued to hover in negative terrain in early afternoon trade as private survey showed that India's services activity slumped in July. At 12:25 IST, the barometer index, the S&P BSE Sensex, was down 136.41 points or 0.42% at 32,340.33. The Nifty 50 index was down 38.80 points or 0.37% at 10,044.05. Weakness in Asian stocks also weighed on sentiment

Indices opened higher but soon slipped into the red in early trade on weak Asian stocks. Stocks languished in the red after extending losses in morning trade after private survey showed that India's services activity slumped in July.

 

The S&P BSE Mid-Cap index rose 0.22%, outperforming the Sensex. The S&P BSE Small-Cap index shed 0.27%. The decline in this index was lower than the Sensex's fall in percentage terms.

The breadth, indicating the overall health of the market, was negative. On the BSE, 1,464 shares fell and 927 shares rose. A total of 122 shares were unchanged.

Pharma stocks bucked weak trend on bargain hunting after recent losses. Sun Pharmaceutical Industries (up 1.1%), Aurobindo Pharma (up 2.29%), Cipla (up 0.57%), Lupin (up 2.15%), Wockhardt (up 2.17%), Dr Reddy's Laboratories (up 0.34%), Divi's Laboratories (up 1.44%), Glenmark Pharmaceuticals (up 0.94%) and Cadila Healthcare (up 1.77%) gained.

IT stocks were mixed. Tech Mahindra (up 1.57%) and TCS (up 0.96%) gained. HCL Technologies (down 0.87%) and Infosys (down 0.25%) declined.

Wipro dropped 0.22%. The company and Tricentis announced a partnership for quality engineering. This partnership with Tricentis will strengthen Wipro's quality engineering and testing services capabilities, by integrating Tricentis Tosca, a continuous testing platform, with Wipro AssureNXT, a managed services QA platform combined with the capabilities of Wipro HOLMES Artificial Intelligence Platform as a part of the broader automaton ecosystem. The announcement was made after market hours yesterday, 2 August 2017.

Kirloskar Ferrous Industries lost 2.14% after net profit fell 96.75% to Rs 1.23 crore on 11.31% increase in total income to Rs 378.24 crore in Q1 June 2017 over Q1 June 2016. The result was announced during market hours today, 3 August 2017.

Entertainment Network (India) lost 3.46% after consolidated net profit dropped 72.57% to Rs 4.57 crore on 9.56% fall in net sales to Rs 98.67 crore in Q1 June 2017 over Q1 June 2016. The result was announced after market hours yesterday, 2 August 2017.

Prashant Panday, Managing Director and Chief Executive Officer, Entertainment Network (India) (ENIL) said that all the top advertising categories on radio recorded de-growth in Q1 June 2017. The biggest advertiser - the Central Government - cut its advertising by nearly 35% compared to last year, Prashant Panday said.

On the macro front, Markit Economics said today, 3 August 2017, business conditions in India's service economy deteriorated markedly in July following the implementation of the goods and services tax (GST). Output and new work declined for the first time since January, with rates of reduction the quickest since September 2013. This had an adverse effect on the labour market, with employment contracting over the month.

The seasonally adjusted Nikkei India Services PMI Business Activity Index plunged from June's eight-month high of 53.1 to 45.9 in July, its lowest level since September 2013. The headline figure signalled the first downturn in output since the start of the year, and one that was marked. The seasonally adjusted Nikkei India Composite PMI Output Index fell sharply from 52.7 in June to 46.

Overseas, Asian stocks declined after surging to the highest level in almost 10 years, with investors assessing the strength of company earnings before American labor-market data provides the latest clues on the health of global growth.

China's services sector expanded at a slightly slower pace in July as new business growth eased, a private business survey showed. The Caixin/Markit services purchasing managers' index (PMI) dropped to 51.5 in July from 51.6 in June.

Japan's services sector expanded at a slower pace in July as new orders eased, a private survey showed. The Markit/Nikkei Japan Services PMI fell to a seasonally adjusted 52 from 53.3 in June.

In US, the Dow Jones Industrials Average broke above the 22,000 threshold for the first time ever yesterday, 2 August 2017, putting the blue-chip index on track for its seventh straight daily risk, though the broader market pulled back on weakness in energy shares. Private sector hiring remained strong in July as employers added 178,000 jobs, ADP reported. ADP revised June's gain to 191,000.

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