Metal stocks drop on China data

Key benchmark indices languished in the red in mid-morning trade as private survey showed that India's services activity slumped in July. At 11:20 IST, the barometer index, the S&P BSE Sensex, was down 159.68 points or 0.49% at 32,317.06. The Nifty 50 index was down 47.90 points or 0.48% at 10,033.60. Weakness in Asian stocks also weighed on sentiment

Indices opened higher but soon slipped into the red in early trade on weak Asian stocks. Stocks extended losses in morning trade.

The S&P BSE Mid-Cap index fell 0.01%. The S&P BSE Small-Cap index shed 0.37%. The decline in both the indices was lower than the Sensex's fall in percentage terms.

The breadth, indicating the overall health of the market, was weak. On the BSE, 1,415 shares fell and 801 shares rose. A total of 117 shares were unchanged.

Metal and mining stocks declined on negative economic data in China. Bhushan Steel (down 2.36%), Jindal Steel & Power (down 5.98%), Vedanta (down 0.94%), Tata Steel (down 1.73%), NMDC (down 2.06%), Hindalco Industries (down 2.76%), Steel Authority of India (down 2.45%), JSW Steel (down 1.18%), Hindustan Zinc (down 0.58%) and National Aluminium Company (down 4.09%) edged lower. China is the world's largest consumer of steel, copper and aluminum.

Capital goods stocks dropped. BEML (down 1.24%), Bharat Heavy Electricals (Bhel) (down 1.98%), L&T (down 0.43%), Thermax (down 0.61%), and CG Power & Industries (down 1.61%) declined. Havells India rose 0.66%. Siemens gained 0.18%.

State Bank of India declined 1.53%. The bank announced that committee of directors of capital raising accorded its approval to allot 20,000 AT 1 Basel III compliant non-convertible, perpetual, subordinated, bonds of face value of Rs 10 lakh each at par bearing coupon of 8.15% per annum payable annually with call option after 5 years or any anniversary date thereafter totalling Rs 2000 crore to various investors. The announcement was made during market hours today, 3 August 2017.

Ingersoll-Rand (India) fell 2.53% after net profit fell 14.2% to Rs 13.53 crore on 1.5% decline in net sales to Rs 147.01 crore in Q1 June 2017 over Q1 June 2016. The result was announced after market hours yesterday, 2 August 2017.

On the macro front, Markit Economics said today, 3 August 2017, business conditions in India's service economy deteriorated markedly in July following the implementation of the goods and services tax (GST). Output and new work declined for the first time since January, with rates of reduction the quickest since September 2013. This had an adverse effect on the labour market, with employment contracting over the month.

The seasonally adjusted Nikkei India Services PMI Business Activity Index plunged from June's eight-month high of 53.1 to 45.9 in July, its lowest level since September 2013. The headline figure signalled the first downturn in output since the start of the year, and one that was marked. The seasonally adjusted Nikkei India Composite PMI Output Index fell sharply from 52.7 in June to 46.

Overseas, Asian stocks declined after surging to the highest level in almost 10 years, with investors assessing the strength of company earnings before American labor-market data provides the latest clues on the health of global growth.

China's services sector expanded at a slightly slower pace in July as new business growth eased, a private business survey showed. The Caixin/Markit services purchasing managers' index (PMI) dropped to 51.5 in July from 51.6 in June.

Japan's services sector expanded at a slower pace in July as new orders eased, a private survey showed. The Markit/Nikkei Japan Services PMI fell to a seasonally adjusted 52 from 53.3 in June.

In US, the Dow Jones Industrials Average broke above the 22,000 threshold for the first time ever yesterday, 2 August 2017, putting the blue-chip index on track for its seventh straight daily risk, though the broader market pulled back on weakness in energy shares. Private sector hiring remained strong in July as employers added 178,000 jobs, ADP reported. ADP revised June's gain to 191,000.

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