But Nifty is falling on lower and lower volumes
We had mentioned in Monday’s closing report that Nifty, Sensex look weak again and that as long as Nifty closes below 7,980, the trend is down. Most of the indices in the Indian stock market suffered a decline of more than 2% down on Tuesday. Almost all the sectors were trading in the red. Heavy selling pressure was seen in metal, banking, realty and consumer durables sectors.
The slide in Asian markets and below-expected macro data sobered investor sentiments in the Indian equities markets on Tuesday, leading the Sensex to close 2.23% down.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) tanked by 586.65 points or 2.23%. Bearish sentiments were also witnessed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). It ended the day's trade at 185.45 points or 2.33 percent down at 7,785.85 points.
Analysts cited negative cues emanating out of Asian markets, especially the continuous slide in the Chinese exchanges to be the catalyst for the sharp fall in the domestic bourse.
Among the Asian markets, Japan's Nikkei plunged by 3.84%. Hong Kong's Hang Seng plummeted by 2.24%. China's Shanghai Composite Index dropped by 1.28%.
The massive implosion in the Chinese markets which has by some estimates eroded 40%-45% of the entire stock value coupled with yuan devaluation and lower factory output has spooked the world markets.
Other factors which subdued the markets were below-expected first quarter (Q1) gross domestic product (GDP), eight core industries (ECI) and purchasing manager’s index (PMI) figures. All these macro data points were below market's estimates.
The Q1 GDP came in at 7%, showing signs of slowing vis-a-vis the 7.5% expansion in the quarter before. But the growth was much higher than 6.7% registered in the first quarter of the last fiscal.
The ECI for select factory output slowed to 1.1% growth in July from an increase of 3% in the previous month, mainly due to a fall in steel production and marginal growth in coal. The select factory output index rose by 4.1% in July 2014.
The Nikkei India Manufacturing PMI (Purchasing Manufacturer’s Index) for the last month stood at 52.3. This is marginally down from July's 52.7. An index reading of above 50 indicates an overall increase in the manufacturing sector, below 50 an overall decrease.
Sector-wise, all 12 sub-indices of the BSE ended the day's trade in the red. The S&P BSE banking, automobile, capital goods, consumer durables and healthcare indices came under intense selling pressure.
The S&P BSE banking index plunged by 713.55 points, the automobile index receded by 472.84 points, the capital goods index contracted by 442.05 points, the consumer durables index declined by 272.67 points and healthcare index decreased by 263.78 points.
Major Sensex gainers during Tuesday's trade were: Sun Pharma, up 0.34% at Rs.900.75.
The major Sensex losers were: Axis Bank, down 5.24% at Rs.480.15; Hindalco Industries, down 5.18% at Rs.75.90; Tata Steel, down 3.93% at Rs.216.20; BHEL, down 3.91% at Rs.217.65; and Vedanta, down 3.80% at Rs.94.85.
The top gainers and top losers in the major indices are given in the table below:
The closing values of the major Asian indices are given below:
Among European indices, the DAX was at 9,964.45, down 2.88%, and the FTSE 100 was at 9,964.45 2, down 3.08%