Market loses its nerve on weak GDP, Sensex tumbles 587 pts

A set of weak GDP numbers, along with downbeat global macros, sent markets reeling today, with the benchmark BSE Sensex plunging a steep 587 points to close at over 1-year low as selling spread.
The growth data, which came in after market hours on Monday, showed the economy grew at 7 per cent in April-June, from 7.5 per cent in the preceding quarter.
Not just that, Nikkei India Manufacturing PMI stood at 52.3 in August, as against 52.7 in July, a sign that the sector grew at a slower pace.
Things were no better in China, with two manufacturing PMIs, including a government one, reinforcing fears that the Chinese economy is cooling more sharply than expected.

The BSE 30-share was bound for south, hitting a low of 25,579.88 before ending at 25,696.44, down 586.65 points, or 2.23 per cent.
The NSE Nifty too ended below the key 7,800-mark, tumbling 185.45 points, or 2.33 per cent, at 7,785.85.

Sentiment stayed decidedly muted after IMF MD Christine Lagarde's predicted a moderate global growth. "This reflects two forces: a weaker than expected recovery in advanced economies, and a further slowdown in emerging economies, especially in Latin America," Lagarde, on a trip to Indonesia, added.
"Markets shut the day with severe cuts on the back of weak global and domestic macro data. China's weak PMI and India's lower GDP growth dampened sentiment. Sell-off was mainly triggered by banks, especially PSU ones, on concerns of pressure on margins," said Gaurav Jain, Director, Hem Securities.

Chances of a possible interest rate hike by the US Fed and global crude showing signs of a tick-up ensured there was more pain for already battered Asian stocks.
The selling was across the board, with banking taking a big hit after HDFC Bank lowered its base rate, sparking fears that others may follow suit, which could pressure margins.
Other than banking, metal, realty, capital goods, PSU, auto and consumer durables took severe beating.
Axis Bank lost heavily, down 5.24 per cent, followed by Hindalco, Tata Steel and BHEL.
The BSE small-cap and mid-cap indices were not left untouched, losing 2.17 per cent and 1.96 per cent, respectively.

China's Shanghai Composite dived 1.23 per cent.
European markets too were down in their opening trade.