Nifty above 19,750; European shares slide

Domestic equity benchmarks reversed all the losses and traded with tiny gains in afternoon trade. The Nifty scaled above the 19,750 mark. IT, metal and consumer durable shares advanced while realty, healthcare and banking stocks corrected.

At 13:30 IST, the barometer index, the S&P BSE Sensex, was up 32.64 points or 0.05% to 66,560.31. The Nifty 50 index added 3.45 points or 0.02% to 19,757.25.

In the broader market, the S&P BSE Mid-Cap index declined 0.13% while the S&P BSE Small-Cap index gained 0.47%.

The market breadth was positive. On the BSE, 1,988 shares rose and 1,516 shares fell. A total of 158 shares were unchanged.

Economy:

Backed by new orders, the manufacturing sector continued expanding at almost the same pace in July as in June, a survey-based index prepared by S&P Global released on Tuesday showed. The Purchasing Managers' Index (PMI) dropped a tad to 57.7 in July, as against 57.8 of June.

The Indian manufacturing sector showed little sign of losing growth momentum in July, as production lines continued to motor on the back of strong new order growth,? Andrew Harker, Economics Director at S&P Global Market Intelligence, said. Further, pressure continued to be exerted on capacity, prompting a solid expansion in employment, again, a trend that is likely to continue in the months ahead should demand remain strong.

All in all, the Indian manufacturing sector has maintained its position as one of the star performers globally, bucking the trend of demand weakness seen in other parts of the world,? Harker concluded.

Meanwhile, the combined Index of Eight Core Industries jumped by 8.2% during June 2023 which was the highest in five months. The growth in the core sector however declined from 13.1% during June 2022.

The government's fiscal deficit increased to Rs 4.51 lakh crore in the April-June quarter of fiscal 2023-24, which comes in at 25.3% of the annual target of Rs 17.87 lakh crore.

India Meteorological Department has informed that India is likely to experience normal rainfall during the second half of monsoon in August and September 2023.

Gainers & Losers:

Coal India (up 4.60%), Tech Mahindra (up 3.35%), NTPC (up 3.02%), LTIMindtree (up 1.77%) and Eicher Motors (up 1.47%) were major Nifty gainers.

Power Grid Corporation of India (down 5.60%), Hero MotoCorp (down 4.17%), Apollo Hospitals Enterprise (down 2.70%), Adani Ports and Special Economic Zone (down 1.68%) and IndusInd Bank (down 1.65%) were top Nifty losers.

Coal India (CIL) advanced 4.60% after the company said its production grew 13.4% to 53.6 MTs in July 2023 over last year's July. The output leapt by 6.3 MTs compared to 47.3 MTs production of July 2022.

Power Grid Corporation of India tumbled 5.60%. The company's consolidated net profit fell to Rs 3,597.16 crore in Q1 FY24 as against Rs 3,801.29 crore posted in Q1 FY23. Total income rose to Rs 11,257.60 crore in Q1 FY24 from Rs 11,168.54 crore recorded in Q1 FY23. The company's board recommended issue of bonus shares in the ratio of one bonus share for three shares held.

Stocks in Spotlight:

Reliance Industries (RIL) shed 0.78%. RIL and Brookfield Asset Management have signed a Memorandum of Understanding (MoU) to explore opportunities for manufacturing renewable energy and decarbonization equipment in Australia. The objective of the MoU is to expedite and mitigate risks in Australia's energy transition by facilitating local production of clean energy equipment, including PV modules, long duration battery storage, and wind energy components.

Maruti Suzuki India lost 1.12%. The auto major's standalone net profit zoomed 145.37% to Rs 2,485.1 crore in Q1 FY24 as against Rs 1,012.8 crore in Q1 FY23. The growth in profitability was on account of larger sales volume, improved realization, cost reduction efforts and higher non-operating income. The vehicle manufacturer registered its highest-ever quarterly net sales at Rs 30,845.2 crore in the quarter ended 30 June 2023, up 21.98% YoY.

State Bank of India declined 1.02%. The bank said that it has raised Rs 10,000 crore through issuance infrastructure bonds, bidding for which took place on 31 July 2023.

Bajaj Auto fell 0.09%. The company said that its total sales declined 10% to 3,19,747 units in June 2023 as compared with 3,54,670 units sold in June 2022.

Global markets:

European shares declined while Asian stocks traded mixed on Tuesday, taking cues from Wall Street's and fuelled by a general sense of optimism about the economic outlook.

Bets on the Federal Reserve calling it a day on its interest rate hiking cycle have been a key driver of buying for weeks as inflation continues to drop while the economy remains robust.

That has been compounded by China's recent promises of stimulus measures to kickstart growth, as a string of data showed the country's post-Covid recovery has all but puffed out.

Meanwhile, China's factory activity remained in contraction territory for the fourth straight month, with the purchasing manager's index coming in at 49.3 compared with the market expectation of 49.2. According to the country's national bureau of statistics, the PMI level is also higher than the 49.0 recorded in June.

The PMI for the non-manufacturing sector in July came in at 51.3, compared to June's figure of 53.2.

In US, all major indices ended Monday's main trading session modestly higher, with the S&P 500 at a 16-month high.

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