Capital goods, telecom stocks decline

Fresh selling in index pivotals pulled the key benchmark indices to intraday low in early afternoon trade. At 12:21 IST, the barometer index, the S&P BSE Sensex, was down 181.20 points or 0.47% at 37,976.72. The Nifty 50 index was down 65.85 points or 0.57% at 11,454.45. Capital goods stocks fell. Telecom stocks declined. Sentiment was hurt by data showing that India's Services PMI has rose at slower pace in August.

Domestic stocks nudged higher in early trade. Volatility struck bourses in morning trade as the key benchmark indices cut losses soon after reversing intraday gains. Stocks hovered in a small range with negative bias in mid-morning trade.

The S&P BSE Mid-Cap index was down 1.34%. The S&P BSE Small-Cap index was down 1.25%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 725 shares rose and 1729 shares fell. A total of 144 shares were unchanged.

Capital goods stocks fell. Bharat Electronics (down 12.47%), ABB India (down 1.11%), Bharat Heavy Electricals (Bhel) (down 3.31%), BEML (down 4.78%), L&T (down 0.88%), Punj Lloyd (down 3.77%), Siemens (down 2.1%) and Thermax (down 2.06%) edged lower.

Telecom stocks declined. Idea Cellular (down 4.34%), MTNL (down 2.26%), Bharti Airtel (down 1.14%), Tata Teleservices (Maharashtra) (down 0.99%) and Reliance Communications (down 3.45%) fell.

Shares of Bharti Infratel fell 2.45%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.

Cadila Healthcare shed 0.45%. Zydus Cadila has received the final approval from the US Food and Drug Administration (USFDA) to market Acyclovir Sodium injection, 500 mg (base)/ 10 mL (50 mg (base)/mL) and 1,000 mg (base)/20 mL (50 mg (base)/mL) single-dose vials (US RLD Zovirax for injection). Acyclovir is an antiviral drug. It will be manufactured at the group's formulations manufacturing facility at Moraiya, Ahmedabad. The announcement was made during trading hours today, 5 September 2018.

On the macro front, August survey data signalled a slower rise in business activity across India's service sector, primarily driven by the weakest growth in new work in three months. The seasonally adjusted Nikkei India Services Business Activity Index fell from July's 21-month peak of 54.2 to 51.5 in August, signalling the slowest growth in the current sequence. The data was released during market hours today, 5 September 2018.

Overseas, Asian stocks were trading lower amid continued pressure in many emerging markets and as trade tensions persisted. US stocks fell yesterday, 4 September 2018, with all major indexes finishing lower, as investors looked ahead to a busy week of trade negotiations and economic data.

Trade tensions were a key focus for investors, with the US reportedly scheduled to restart tense negotiations with Canada that could lead to way to revising the North American Free Trade Agreement. Over the weekend, President Donald Trump threatened to leave Canada out of any new Nafta pact. The president of the country's largest group of labor unions said that Nafta won't work if it doesn't include Canada.

On the macro front, the Institute for Supply Management's manufacturing survey rose to 61.3 in August, its highest level since May 2004. Separately, the IHS Markit reading on August manufacturing came in at 54.7, compared with 55.3 in July.

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