A bout of volatility was witnessed as key benchmark indices languished in negative zone in 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 down 223.63 points or 0.85% at 26,059.46. 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.
Shares of public sector oil marketing companies (PSU OMCs) fell as crude oil prices surged sharply overnight.
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 10:21 IST, the S&P BSE Sensex was down 223.63 points or 0.85% at 26,059.46. 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 in The index fell 142.02 points at the day's high of 26,141.07 in early trade.
The CNX Nifty was down points or 0.92% at 7,898.30. The index hit a high of 7,929.10 in intraday trade. The index hit a low of 7,886.65 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. 1,297 shares declined and 598 shares rose. A total of 71 shares were unchanged.
The BSE Mid-Cap index was off 92.62 points or 0.86% at 10,641.80. The fall in the index was higher than Sensex's decline in percentage terms. The BSE Small-Cap index was off 51.66 points or 0.47% at 10,919.61. The fall in the index was lower than Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 566 crore by 10:15 IST compared with turnover of Rs 185 crore by 09:25 IST.
Index heavyweight and engineering and construction major L&T fell 1.96% to Rs 1,573.05. The stock hit high of Rs 1,588 and low of Rs 1,564 so far during the day. L&T during market hours today, 1 September 2015, announced that it has won a major railway order worth Rs 1070 crore in Saudi Arabia.
Shares of public sector oil marketing companies (PSU OMCs) fell as crude oil prices surged sharply overnight. HPCL (down 1.98%), BPCL (down 1.46%) and Indian Oil Corporation (down 0.09%) edged lower. Higher crude oil prices will raise under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already freed pricing of petrol and diesel.
Meanwhile, Indian Oil Corporation (IOCL) after market hours yesterday, 31 August 2015, announced reduction in petrol and diesel prices with effect from 1 September 2015. The retail selling price of petrol was decreased by Rs 2 per litre at Delhi (including state levies) with corresponding price revision in other states. With the latest revision, the price of petrol in Delhi has become Rs 61.20 per litre. The retail selling price of diesel was reduced by Rs 0.50 per litre at Delhi (including state levies) with corresponding price revision in other states. With the latest revision, the price of diesel in Delhi has become Rs 44.45 per litre. PSU OMCs review fuel prices twice a month based on the trend in international oil market and currency movement.
In the global commodities markets, Brent crude oil futures edged lower after a sharp surge overnight. Brent for October settlement was currently off $1.48 a barrel at $52.67 a barrel. The contract had jumped $4.10 a barrel or 8.19% to settle at $54.15 a barrel during the previous trading session.
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%.
Meanwhile, investors continue to watch the performance of the monsoon rains which will have a bearing on food prices and rural income. India's weather office India Meteorological Department (IMD), said in a daily report issued yesterday, 31 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 11% below the Long Period Average (LPA) until 31 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 15% below the LPA in Central India, 10% below the LPA in Northwest India and 2% below the LPA in East & Northeast India until 31 August 2015.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
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 0.34% to 1.54%.
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 1.06%. In Hong Kong, the Hang Seng index was off 0.47%.
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.
US stocks declined yesterday, 31 August 2015, reflecting continuing concerns about the Chinese economy and uncertainty over US interest rates.
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