Nifty slips below 7,900; financials & metal shares weigh

Hindalco, HDFC, L&T, Axis Bank and Bharti Airtel are the top five Sensex losers, falling between 2-3%

Markets have edged lower tracking weak global cues along with consistent sell-off among metal and financial shares leading the downfall.

At 10:32 AM, the Sensex was lower by 240 points at 26,043 and the Nifty has slipped 75 points at 7,896.

Among broader markets, BSE Midcap and Smallcap indices have slipped between 0.5-1%.

The top losers from the Sensex pack are Hindalco, HDFC, L&T, Axis Bank, Bharti Airtel, HDFC, SBI and RIL, all slumping between 2-3%.


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Updated at 9:30

Markets have commenced lower tracking weak trend in the global peers over persistent China woes and prospects of a rate hike by the US fed.

Meanwhile, China's official Purchasing Managers' Index (PMI) stood at 3-year low at 49.7 raising fears of the health of the world’s second largest economy.

At 10:00 AM, the Sensex was lower by 173 points at 26,110 and the Nifty has slipped 55 points at 7,917.

According to Angel Broking's report, "The trend deciding level for the day is 26,334 / 7,988 levels. If Nifty trades above this level during the first half-an-hour of trade then we may witness a further rally up to 26,453 – 26,624 / 8,027 – 8,083 levels. However, if Nifty trades below 26,334 / 7,988 levels for the first half-an-hour of trade then it may correct towards 26,045 – 26,164 / 7,932 – 7,892 levels."

MACRO-ECONOMIC DATA

India's economy grew 7% during the first quarter of the current financial year, slower than 7.5% in the previous quarter but faster than 6.7% in the year-ago quarter. 

Adds Debopam Chaudhuri, Chief Economist & Vice President of Research at ZyFin Research,“The GDP growth estimates are in line with expectations. We don’t see any significant recovery over the next two quarters with economic activity slumping further. Private consumption continues to remain less than 60% of the GDP suggesting low aggregate demand conditions.”
 

Growth in the eight core sectors — coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — slowed to 1.1% in July after a growth of three per cent in June, mainly on account of low expansion in coal output and contraction in steel, crude oil and natural gas production  that hinted at a weak industrial recovery.

RUPEE

The rupee depreciated 3.6% in August to end at 66.48. The rupee had ended at 64.14 per dollar on July 31. This was the second worst fall for the rupee and the last one was recorded in August 2013 when during the month the rupee had depreciated by 8.83%.

GLOBAL MARKET

Asian shares fell on Tuesday and the dollar struggled 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.

China's official Purchasing Managers' Index (PMI) fell to 49.7 in August from the previous month's reading of 50.0, the weakest showing in three years.

Japan’s Nikkei, Straits Times, China’s Shanghai Composite and Hong Kong’s Hang Seng are down between 1-3%. The early indicator SGX Nifty has slumped 1% at 7,914 levels.

Losses on Wall Street also soured Asian sentiment after comments from Federal Reserve Vice Chairman Stanley Fischer heightened fears among investors of a potential US interest hike in September. US stock futures in Asia were down 1.5%.

SECTORS & STOCKS

Sectors like Banks, Capital Goods and Metal have slumped by almost 2% followed by counters like FMCG, Auto, Consumer Durables, Oil & Gas, Power and Realty, all dipping by 1% each. Apart from IT, all the sectoral indices are trading in negative zone.

The top losers from the Sensex pack are SBI, HDFC, HDFC Bank, Tata Steel, Coal India, L&T, ICICI Bank, Axis Bank and Vedanta.

Metal shares have plunged in trades on China worries after China's official Purchasing Managers' Index (PMI) stood at 3-year low.

SBI and ICICI Bank have been given the status of domestic systemically important banks (D-SIBs) by the central bank yesterday.

Axis Bank has cut its deposit rates by up to 0.50% across maturities. HDFC Bank has cut its base rate or minimum lending rate by 35 basis points to 9.35% effective September 1.

The auto stocks are in focus as August auto sales data will be released today.

Due to raw material crisis faced by Vedanta to run its Lanjigarh alumina refinery, the state government has decided to push aluminium producers like National Aluminium Company (Nalco) and Aditya Birla Group promoted Hindalco Industries to make arrangements for interim bauxite supplies.