Sensex drops 214 points on profit-booking; Nifty holds 17,000-level
M&M was the top loser in the Sensex pack.
Equity benchmark Sensex dropped 214 points on Wednesday, led by losses in index majors Infosys, HDFC and TCS as investors booked profits at record levels despite a positive trend in global markets.
After touching a lifetime high of 57,918.71 during the session, the 30-share index pared all gains to end 214.18 points or 0.37 % lower at 57,338.21.
Similarly, the broader NSE Nifty declined 55.95 points or 0.33 % to 17,076.25. It touched an intra-day record of 17,225.75.
M&M was the top loser in the Sensex pack, shedding around 3 %, followed by Tata Steel, Bajaj Finserv, TCS, HDFC and Infosys.
On the other hand, Asian Paints, Nestle India, Axis Bank and Titan were among the gainers.
"Despite a strong opening after favourable GDP data, domestic indices failed to hold onto its early gains due to profit booking strategy from the recent rally,” said Vinod Nair, Head of Research at Geojit Financial Services.
India’s GDP rose due to the low base effect and was powered by private consumption expenditure and investment. The auto sector showed a flattish trend as sales for August saw a decline following supply constraints, he added.
In Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a positive note. Equities in Europe were also trading with gains in the afternoon session.
Meanwhile, international oil benchmark Brent crude rose 0.31 % to $ 71.85 per barrel.
Crude Oil Futures Settle Notably Lower
Crude oil futures settled lower on Tuesday amid concerns about likely excess supply in the market with OPEC and allies set to increase production, and the restoration of crude output in the U.S. after Hurricane Ida.
Weak Chinese economic data weighed as well on crude oil prices.
West Texas Intermediate Crude oil futures for October ended down by $0.71 or about 1% at $68.50 a barrel.
The Organization of the Petroleum Exporting Countries and its allies are set to meed on Wednesday. It is widely expected that the group will agree to proceed with plans to add another 400,000 barrels per day of supply each month through December.
China’s service sector contracted in August amid the renewed virus flare-up, official survey results from the National Bureau of Statistics showed on Tuesday.
The official non-manufacturing Purchasing Managers’ Index, which measures the performance of the services and construction sectors, declined to 47.5 in August from 53.3 a month ago. A reading below 50 indicates contraction in the sector.
At the same time, the factory PMI came in at 50.1, down from 50.4 in the previous month. The expected reading was 50.2.
The composite output index fell to around 48.8 in August from 52.4 in July.
Meanwhile, traders await weekly inventory data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API is due out later today, while EIA’s inventory data is due Wednesday morning.
CMA Clears National Grid-PPL WPD Deal – Quick Facts
The Competition and Markets Authority has announced its decision on the completed acquisition by National Grid Holdings One plc of PPL WPD Investments Limited. Based on the information currently available, the CMA has decided not to refer the merger to a phase 2 investigation.
In March, National Grid plc agreed to acquire PPL WPD Investments Limited, the holding company of Western Power Distribution, the UK’s largest electricity distribution business, from PPL WPD Limited, a subsidiary of PPL Corp. The merger inquiry was launched by the CMA on 13 July 2021.
Trifast Acquires Falcon Fastening In $8.3 Mln Deal
U.K.-based Trifast plc (TRI.L) on Wednesday announced the acquisition of North American specialist fastenings distributor, Falcon Fastening Solutions Inc. for US$8.3 million or 6 million pounds in cash.
The deal, part of the group’s acquisition-led North America expansion strategy seeks to extend its global OEM customer base and presence in non-auto focus sectors.
Trifast which specializes in the design, engineering, manufacture, and distribution of high-quality industrial fastenings and Category ‘C’ components principally to major global assembly industries expects the deal to create strong presence for it in North America.
The deal which Trifast funded through the existing cash and financing facilities, is expected to add to its earnings in the financial year-ending 31 March 2022.
Shares of Trifast plc closed at 148 pounds on August 31.
Standard Motor Products Buys Germany’s Stabil Group For Undisclosed Terms
Standard Motor Products, Inc. (SMP), an automotive parts manufacturer, announced Wednesday the acquisition of Germany’s Stabil Operative Group GmbH. The financial terms of the deal were not disclosed.
It is anticipated the acquisition will be accretive to earnings per share in 2022.
Stabil is a manufacturer and distributor of a variety of components, including electronic sensors, control units, and clamping devices to the European OE market. The company, with around 230 employees, generates around $25 million in annual revenue and has facilities in Germany and Hungary. We welcome Stabil and its approximately 230 employees to the SMP family.”
SMP expects to fund the acquisition in cash through borrowings under its revolving credit facility.
Eric Sills, Standard Motor Products’ Chief Executive Officer and President, said, “Stabil gives us exposure to a diversified group of blue chip European commercial and light vehicle OE customers, provides us with experienced sales and engineering teams, expands our product portfolio, increases our global manufacturing footprint, and creates positive synergies with our existing operations in Poland.”