Nifty takes support at 10,950; breadth positive

Benchmarks traded sideways near the day's low in mid-morning trade. Weak domestic economic data and negative global cues weighed on sentiment. A surge in fresh coronavirus cases and intensifying US-China tensions also put pressure on stocks.

At 11:27 IST, the barometer index, the S&P BSE Sensex, tumbled 406.58 points or 1.08% at 37,200.31. The Nifty 50 index was down 105.35 points or 0.95% at 10,968.10.

The Nifty took a support at 10,950 level and traded above that level. The index was hovering around its 20 days simple moving average placed at 10,962.70. This level will act as a crucial support in near term.

The broader market outperformed the benchmarks. The S&P BSE Mid-Cap index was up 0.45% while the S&P BSE Small-Cap index was gained 1.09%.

The market breadth was positive. On the BSE, 1244 shares rose and 1024 shares fell. A total of 152 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 958.64 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 442.73 crore in the Indian equity market on 31 July, provisional data showed.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 18,019,472 with 688,369 deaths. India reported 5,79,357 active cases of COVID-19 infection and 38,135 deaths while 11,86,203 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

July Auto sales:

Escorts fell 2.34%. The tractor maker on Saturday (1 August) said it sold 5,322 tractors, registering a growth of 9.5% against 4,860 tractors sold in July 2019. Sequentially, however, tractor sales slumped 51% as against 10,851 units sold in June 2020.

Hero MotoCorp fell 0.79%. The company said its month-on-month sales growth saw rapid recovery for the third consecutive month in July 2020 since operations resumed. Hero MotoCorp sold 514,509 units of motorcycles and scooters in July 2020, registering a sequential growth of 14% over 450,744 sold in June 2020. Sales fell 4% in July 2020 compared with 535,810 units sold in July 2019. The two-wheeler manufacturer said sales figures reached more than 95% of wholesale dispatch numbers of the corresponding month in the previous year (July 2019). More than 95% of Hero MotoCorp customer touch-points are currently operational.

Maruti Suzuki declined 0.67%. The car major reported total sales of 108,064 units in July 2020, up 88.2% as against 57,428 units sold in June 2020. Annually, the total sales have fallen 1.1% from 109,264 units sold in July 2019. While total domestic sales rose 1.3% to 101,307 units, total exports sales have fallen 27% to 6,757 units in July 2020 over July 2019.

Mahindra & Mahindra (M&M) rose 0.23%. M&M's total tractor sales during July 2020 were at 25,402 units, up by 27% from 19,992 units sold in the same period last year. It reported 36% decline in total automobile sales to 25,678 units in July 2020 from 40,142 units in July 2019. Sequentially, the total auto sales have jumped 32.6% as compared to 19,358 units sold in June 2020.

TVS Motor Company gained 1.29%. The two-wheeler manufacturer registered a sales growth of 27% in July 2020 at 252,744 units compared with 198,387 units in June 2020. The total sales are, however, lower by 9.6% compared with 2,79,465 units sold in July 2019.

Global Markets:

Asian stocks were trading mixed on Monday as US lawmakers struggled to hammer out a new stimulus plan and a global surge of new coronavirus cases showed no sign of abating.

A private survey released Monday showed China's manufacturing activity expanded in July. The Caixin/Markit manufacturing Purchasing Manager's Index came in at 52.8 for July as compared to 51.2 for June.

Japan's economy shrank an annualised 2.2% in January-March, unchanged after a second revision, data from the Cabinet Office showed on Monday. On a quarter-on-quarter basis GDP shrank 0.6%, unchanged from the second preliminary reading.

South Korea's manufacturing activity shrank at a much slower pace in July, signalling that a gradual recovery in demand is gaining momentum on easing lockdowns, although the resurgence in infections remained a risk. The IHS Markit purchasing managers' index (PMI) rose to 46.9 in July from 43.4 in June, marking the highest reading since January. But that was still below the 50 threshold that separates growth from contraction.

On Friday, Fitch Ratings cut the outlook on the United States' triple-A rating to negative from stable, citing eroding credit strength and a ballooning deficit. The credit rating agency also said the future direction of U.S. fiscal policy depends in part on the November election and the resulting makeup of Congress, cautioning there is a risk policy gridlock could continue.

Tensions between Washington and Beijing likely continued being watched by investors, with U.S. Secretary of State Mike Pompeo reportedly saying Sunday that US President Donald Trump is set to announce in the coming days new actions related to Chinese software companies viewed by his administration as a national security threat.

On Friday, Trump reportedly said he will act soon to ban Chinese-owned video app TikTok from the US. Microsoft on Sunday confirmed it has held talks to buy TikTok in the US from Chinese tech firm ByteDance.

In US, stocks wiped out earlier losses and closed higher on Friday as the biggest tech companies and market leaders soared after posting stellar quarterly results. Inspired by blowout earnings from tech heavyweights Apple, Amazon, Facebook and Google parent Alphabet, stocks rallied at the open, slipped into mostly negative territory during the session, and then recovered in the final hour.

Shares of Apple roared 10.5% higher to a new all-time high, after the iPhone maker reported record profit, and announced a 4-for-1 stock split. Amazon, meanwhile, jumped 3.7% after delivering results that soared past forecasts for sales and earnings. Facebook shares rallied 8.2% as the social media giant easily topped expectations for earnings and revenue. Alphabet shares were down 3% after the Google parent met expectations despite a dip in advertising revenue.

Consumer sentiment deteriorated amid a resurgence in new coronavirus cases. The final reading of the index of consumer sentiment stood at 72.5 in July, lower than the flash estimate of 73.2 early in the month and down from June's 78.1, the University of Michigan said Friday.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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