Indices hit fresh intraday low

Key benchmark indices declined further and hit an intraday low in morning trade. Bank stocks slumped after FM Nirmala Sitharaman announced merger of PSU Banks. The Nifty slipped below 10,900 mark. The domestic equity market reacted negatively to India's gross domestic product (GDP) data which grew at slowest pace since 2013. Merger of banks failed to support investors' sentiment.

At 10:20 IST, the barometer index, the S&P BSE Sensex, was down 424.75 points or 1.14% at 36,908.61. The Nifty 50 index was down 125.05 points or 1.14% at 10,894.20.

The S&P BSE Mid-Cap index was down 0.79%. The S&P BSE Small-Cap index was down 0.36%.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 683 shares rose and 1052 shares fell. A total of 112 shares were unchanged.

PSU banks stocks slumped after the government unveiled mega merger of select state-run banks. In a press briefing on Friday, 30 August 2019, finance minister announced that Punjab National Bank (down 7.31%), Oriental Bank of Commerce (down 4.76%) and United Bank of India (up 3.17%) will be merged. The combined entity will be second largest PSU bank in India with business of Rs 17.94 lakh crore. It will have second largest banking network in India with 11,437 branches.

Union Bank of India (up 3.17%), Andhra Bank (up 4.3%) and Corporation Bank (down 1.33%) will be also merged. The entity will be fifth largest public sector bank with business of Rs 14.59 lakh crore. Canara bank and Syndicate Bank will be merged. The entity will be fourth largest public sector bank with business of Rs 15.20 lakh crore. Finance minister also announced that Indian Bank and Allahabad Bank will be merged. The entity will be seventh largest public sector bank with business of Rs 8.08 lakh crore.

The S&P BSE Bankex was down 1.78% at 30,398.87.

Alkem Laboratories was marginally up by 0.09% after the company reported that it has received two observations for Daman manufacturing facility from USFDA. The company assured that it will give a detailed response with adequate corrective and preventive measures to address the US FDA observations.

Divi's Laboratories gained 1.37% to Rs 1649.6 after the company announced that Health Products Regulatory Authority (HPRA) and JAZMP, Slovenia have concluded the inspection of Unit-2 Vishakhapatnam on 30 August 2019. The inspection was concluded successfully with no critical observations.

Drugs manufacturer Aurobindo Pharma rose 1.71% after the company announced that it has entered into a joint venture agreement. The company reported that Helix Healthcare S.V, Netherlands company's wholly owned entered into an agreement with Shanghai LongJin Investment Company and Sveva Capitals to establish a Joint Venture Company in China. The new joint venture company will deal in development, manufacturing, marketing and sale of pharmaceutical products. Helix Healthcare holds 57% in the new joint venture company.

The S&P BSE Healthcare was up 0.3% at 12,914.46

On domestic macro front, India's gross domestic product (GDP) growth moderated to 25-quarters low of 5% in Q1 of 2019-20 from 5.8% growth recorded in the previous quarter and 8% improvement in the corresponding quarter last year. Quarterly Gross Value Added (GVA) growth also eased to 4.9% in Q1 of 2019-20 from 5.7% in Q4 of 2018-19 and 7.7% in Q1 of 2018-19. The data was announced after market hours on Friday, 30 August 2019.

Growth of eight core industries dropped to 2.1% in July 2019. The eight core sector industries - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity had expanded by 7.3% in July 2018.The data was announced after market hours on Friday, 30 August 2019.

The fiscal deficit of central government increased 1.4% to Rs 547605 crore in April-July 2019-20. The fiscal deficit as a percentage of full year estimate stood at 77.8% in April-July 2019-20 compared with 86.5% touched in the corresponding period of last year.

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