Indices trade with small gains; Europe opens higher

The domestic equity benchmarks were trading with minor gains in afternoon trade. Weak domestic economic data dented investors sentiment. At 13:26 IST, the barometer index, the S&P BSE Sensex, was up 46.26 points or 0.12% at 37,734.17. The Nifty 50 index added 21.70 points or 0.20% at 11,116.95.

The broader market was trading higher. The S&P BSE Mid-Cap index gained 0.66% while the S&P BSE Small-Cap index rose 0.83%.

The market breadth was positive. On the BSE, 1510 shares rose and 954 shares fell. A total of 156 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 18,480,000 with 700,647 deaths. India reported 5,86,244 active cases of COVID-19 infection and 39,795 deaths while 12,82,215 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Economy:

The IHS Markit India Services Business Activity Index registered 34.2 in July, and despite rising slightly from 33.7 in June, signalled a further rapid reduction in service sector output. Moreover, the latest reading was among the lowest recorded in nearly 15 years of data collection, surpassed only by the unprecedented falls in the previous three months. With overall demand conditions severely muted, service providers made further job cuts in July

The Composite PMI Output Index, which measures combined services and manufacturing output, signalled a further rapid contraction in private sector business activity in July. Falling from 37.8 in June 2020 to 37.2 in July 2020.

Gainers & Losers:

Hindalco Industries (up 6.25%), Tata Steel (up 4.82%), Adani Ports and Special Economic Zone (up 3.54%), Maruti Suzuki India (up 2.50%) and JSW Steel (up 2.24% ) were the top gainers.

HDFC Life Insurance Company (down 1.11%), HDFC Bank (down 1.05%), Power Grid Corporation of India (down 1.07%), UPL (down 1.03%) and Infosys (down 0.81%) were the top losers.

Stocks in Spotlight:

Axis Bank were rose 2.08% to Rs 437.80. The the private lender on Tuesday launched its qualified institutional placement with a floor price of Rs 442.19 per share. The bank is reportedly targeting a base deal size of Rs 8,000 crore, with an option to up size the deal by Rs 2,000 crore. A committee of board will consider the issue price at its meeting on Monday, 10 August 2020.

Steel Authority of India (SAIL) surged 6.66% to Rs 36.85 after the steel major's sales volume grew about 50% to 15.83 lakh tonnes in July 2020 over July 2019. The company sold 12.73 lakh tonnes in the domestic market while exporting 3.10 lakh tonnes of steel during July 2020, attaining a growth of 29% and 349%, respectively over the corresponding period last year (CPLY).

The consequent improvement in cash collections despite lower prices compared to CPLY coupled with stringent financial measures, the company has been able to bring down its borrowings below psychological level of Rs 50000 crore, SAIL said in a statement.

Global Markets:

Most shares in Europe and Asia advanced on Wednesday. Growth in China's services sector slowed in July from a decade high the previous month. The Caixin/Markit services Purchasing Managers' Index (PMI) fell to 54.1 from June's 58.4, which was the highest reading since April 2010. The 50-mark separates growth from contraction on a monthly basis.

US stock market ended higher after a choppy session on Tuesday, lifted by Apple and energy stocks but limited by declines in AIG and Microsoft.

White House negotiators late Tuesday vowed to work around the clock to reach a spending deal by the end of the week, but the Treasury Secretary warned they were not going anywhere close to the $3.4 trillion Democratic leaders sought.

Meanwhile, senior U.S. and Chinese officials will reportedly review the implementation of their Phase 1 trade deal and likely air mutual grievances in an increasingly tense relationship during an August 15 videoconference. U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, the principal negotiators for the two countries, will participate in the meeting, an initial six-month review of the pact activated on February 15.

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