Nifty ends below 7,800 on global growth concerns; Midcaps outperform

The broader markets displayed divergent trend with BSE Midcap index closed up by 0.6% and Smallcap index closed down by 0.4%, respectively

Benchmark share indices snapped a two-day winning streak on Thursday after weak economic data from Japan and China rekindled global growth concerns.

The barometer S&P BSE Sensex closed the day at 25,622, down by 97 points or 0.38% after opening while the CNX Nifty settled at 7,788, down by 30 points or 0.39%

The broader markets, however, displayed divergent trend with BSE Midcap index closed up by 0.6% and Smallcap index closed down by 0.4%, respectively. The health of the market was weak with 1,478 declines against 1,118 advances on the BSE.

According to Reuters poll, India's consumer inflation for the month of August is expected to have cooled off, which forms a ground for the rate-cut by the central bank.

Meanwhile, the government is set to announce the Industrial Index of Production (IIP) data tomorrow.

On the currency front, the Indian rupee recovered to quote at 66.47, up by 7 paise on account of foreign fund outflows amid appreciation in the US currency overseas.

EXPERT VIEWS

According to Mudit Goyal, Technical Analyst, SMC Global Securities, "Nifty showed a decent recovery in last three sessions, as expected according to Charts. Nifty made a yearly low of 7540 levels, which was the support of August, 2014.Apart from this, Nifty has also completed the target of “Head and Shoulder pattern” during this fall, so bounce back was expected."

He also added that, "From current levels, 7900-7940 levels may act as a resistance zone for near term and on the lower side, 7680-7650 can be the near term support zone."

GLOBAL ECONOMY & MARKETS

Standard & Poor's downgraded Brazil's credit rating to junk grade on Wednesday, further hampering President Dilma Rousseff's efforts to regain investors' trust and pull Latin America's largest economy out of recession.

World stocks and commodities moved back into reverse on Thursday after four straight days of gains following a heavy overnight tumble by oil and more uncertain news from China and Japan but also from Brazil and New Zealand.

Chinese stocks also ended between 1.2% and 1.4% in the red. Hong Kong and Australian stocks both lost more than 2%.

European equities are also trading lower between 0.2-0.6%

SECTORS&STOCKS

Out of 12 sectors, barring BSE Capital Goods and BSE Auto indices, all other indices closed in red.

Metal shares ended lower on weak Chinese economic data. Vedanta (0.2%), Hindalco (2.6%), NMDC (2.8%), JSWSteel (0.5%), Jindal Steel (2.5%) , all edged lower.

Tata Motors is in the process of renegotiating the terms of the State Support Agreement (SSA) it had signed with the Gujarat government in 2008 to set up a factory at Sanand, near Ahmedabad. The stock ended as the highest gainer with 2.7% gains.

Financials and banking shares recovered in the last hour of trading on account of short-covering.  ICICI Bank gained 1.1% while HDFC Bank, Axis Bank, SBI all closed down between 0.4-1.8%

Auto pack also showed potency on the back of a mixed bag August sales. Domestic cars sales increased 6% while two-wheeler sales were down by 3%. Bajaj Auto ended up by 1.1%, Maruti Suzuki ended 0.1% up, Hero Motocorp ended flat.

Mahindra & Mahindra launched the TUV300 sports utility vehicle at Rs 6.9 lakh. The stock ended with 0.6% gains.

Larsen& Toubro is set to work on two or three infrastructural projects worth Rs 3,000 crore in Sri Lanka. The stock jumped nearly 2%

Tata Steel has started production from its coke oven unit at Kalinga Nagar plant, which is targeted to commission integrated steel production in December this year. The stock gained 0.44%

S&P downgraded Brazil’s status to junk rating following which companies such as Lupin, Glenmark Pharma, Torrent Pharma, Havells that have maximum exposure to the country got affected as they shed 1-5% on the Sensex.


With Reuters input