Stocks hovered in a small range with negative bias in mid-morning trade. At 11:25 IST, the barometer index, the S&P BSE Sensex, was down 48.97 points or 0.13% at 38,108.95. The Nifty 50 index was down 27.70 points or 0.24% at 11,492.60. Cement 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.
The S&P BSE Mid-Cap index was down 0.59%. The S&P BSE Small-Cap index was down 0.57%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 875 shares rose and 1430 shares fell. A total of 139 shares were unchanged.
Cement stocks declined. Ambuja Cements (down 2.35%), ACC (down 1.8%), UltraTech Cement (down 1.43%) and Shree Cement (down 0.35%) fell.
Grasim Industries was off 0.5%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Texmo Pipes & Products rose 12.35% after the company said it received orders of HDPE pipe worth Rs 81.30 crore from Larsen & Toubro, Chennai. The execution period of the order is 9 months. The announcement was made after market hours yesterday, 4 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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