News from the US and Europe indicate a slowing down of the economy impacted by continuing restrictions on economic activity triggered by the new waves of the pandemic. Developed markets have turned slightly weak on these negative developments, said an analyst.
“The midcap index has staged a comeback this month, outperforming the Nifty. But investors should refrain from jumping into the broader market since risk in the segment is on the higher side,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are the bluechips doing?
After opening in the red, benchmark indices slid further lower. At 9.27 am, BSE flagship Sensex was down 233 points or 0.40 per cent at 58,073. NSE benchmark Nifty fell 41 points or 0.23 per cent to 17,329.
In the 50-share pack Nifty, Coal India was the biggest gainer, up 1.48 per cent.
, HDFC, UPL, , Maruti Suzuki, Bharat Petroleum, TCS and Bajaj Auto were among other gainers.
Reliance Industries was the top loser in the pack, down 1.61 per cent. ICICI Bank, HCL Tech,
Motors, , Axis Bank, Tech Mahindra and Nestle India were among those that traded in the red.
FACTORS DRIVING MARKETS
India IIP at pre-Covid levels: Industrial output rose by 11.5 per cent in July 2021 as against a 10.5 per cent contraction in July 2020, led by sharp expansion in the mining sector and growth. The July data show industrial output at near pre-pandemic levels, and analysts expect growth to rise further in August.
US taxes: Reports of US Democrats considering proposals to raise taxes on corporations and the wealthy, while not exactly new, could make for a cautious mood.
Alipay to be broken up?: Adding to concerns about Beijing’s regulatory crackdown was an FT report that said the government aimed to break up Alipay, the hugely popular payments app owned by Jack Ma’s Ant Group.
Broader market indices were trading mixed, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.15 per cent, while Nifty Midcap dropped 0.18 per cent. Broadest index on NSE, Nifty 500 was down 0.18 per cent.
JSW Energy, Dalmia Bharat, IRCTC, CDSL, Caplin Point Labs and Hindustan Copper were gainers from the space while Aegis Chemicals, Quess Corps, IDFC, Adani Total Gas, IndiaMart InterMesh and Nippon India were under selling pressure.
Japanese shares have been on a tear as hopes for fresh stimulus from the new Prime Minister saw the Nikkei surge 4.3 per cent last week. The Topix has already scaled that peak, while the Nikkei turned hesitant early on Monday.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1 per cent, after bouncing on Friday. Both Nasdaq futures and S&P 500 futures were up 0.3 per cent, after running into profit taking last week.