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Nifty and Sensex decline on risk aversion and India PMI

  • India's Nifty and Sensex ended lower on Tuesday, due to risk aversion in global markets and poor results from the Indian PMI.
  • The Nifty and the Sensex hit all-time highs on Monday amid the narrative around Indian growth and the global rebound.
  • Attention now turns to the US ISM services PMI, Fed Chair Jerome Powell and US non-farm payrolls data.

The Sensex 30 and Nifty 50, India's main benchmark indices, corrected on Tuesday and moved into the negative zone.

Risk aversion spread to Asia and Europe as services PMI data from India and China disappointed in February.

The Nifty 50 of the National Stock Exchange (NSE) and the Sensex 30 of the Bombay Stock Exchange (BSE) closed the day with a fall of almost 0.25%, to 22,356.30 and 73,677.13 respectively.

Stock market news

  • Among the stocks that rose the most on the Nifty were Bharti Airtel, Tata Motors, SBI Bank, Bajaj Auto and ONGC. Meanwhile, the top laggards were Bajaj Finance, TCS, Nestle India, Infosys and Bajaj FinServ.
  • IT stocks fell as CLSA downgraded TCS and HCL, and reiterated the sale of Wipro and LTIMindtree.
  • Bharti Airtel expands its network in Ernakulam and Idukki districts under its rural upliftment project
  • Markets are disappointed by an unexpected drop in the Chinese Caixin services PMI to 52.5 points in February, while China's GDP growth target for 2024, set at around 5.0%, also weighs on risk appetite.
  • Additionally, the HSBC India Services Purchasing Managers' Index (PMI), produced by S&P Global, fell to 60.6 last month from January's six-month high of 62.0, missing estimates of 62.0.
  • On Monday, Moody's raised India's GDP growth estimate for 2024 from 6.1% to 6.8%.
  • The Indian manufacturing sector rose on Friday to a five-month high of 56.9 in February.
  • US stock markets closed lower on Monday, in a climate of caution in the face of a week full of events.
  • Last Friday, the US manufacturing sector contracted at a rapid pace in February, with the ISM Manufacturing PMI falling to 47.8 from 49.1 in January, largely missing market expectations of 49.5.
  • According to the CME's FedWatch tool, markets are currently pricing the chance that the Fed will begin easing rates in May at 30%, up slightly from 20% a week ago. For the June meeting, the probability of a rate cut now stands at around 67%.
  • India's Gross Domestic Product (GDP) grew 8.4% annually in the third quarter (October-December), compared to 7.6% in the previous quarter, according to data published on Thursday by the National Statistics Office (ONE).
  • Indian markets will have a holiday-shortened week, as they will be closed on Friday for the Mahashivratri holiday.
  • The main risk events for the markets this week will be the Indian services PMI, the testimony of the president of the US Federal Reserve (Fed), Jerome Powell, and the very important non-farm payrolls (NFP) data ) Americans.
  • Another important development is the meeting of China's National People's Congress (NPC), where new stimulus measures could be announced.

Source: Fx Street

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