It has been today (August 3, 2020) the fourth straight day of losses for the benchmark indices, with Nifty now below the 11000 mark, with losses of over 1%. The markets started trade on a weak note in the new month, even as there was seen some positive on the Asian indices. Nikkei is up by a huge 2.24% when writing the story.
Currently the markets by and large are consolidating and here are the triggers leading to losses on the headline indices plus the broader markets despite some of the positives being recorded are continuous flow of FII funds as well as recovery in auto sales number for the just concluded July month.
1. Manufacturing PMI data for July:
The data representing the pace of business activity slowed down in July due to the localized lockdown on account of rising corona cases. This is further owed to decline in fresh orders and also a continuing threat to export orders given the way this problem of the pandemic is getting out of control without the vaccine.
2. Financials are underperforming:
Financials have been underperforming and with heavy selling seen there is a drag on Nifty Bank, which is down in trade again, while Nifty PSU Bank is still up may be on the call of the RBI to reduce government stake in such banks. Top losers among the Nifty stocks from the financial space include IndusInd Bank, Kotak Mahindra Bank, HDFC Life, Axis Bank, HDFC Bank.
Nifty Private Bank in the afternoon trade has further slipped by as much as 3%
3. Heavyweights drag:
Heavyweight stocks are also adding to the losses of the indices with losses seen in RIL, HDFC Bank.
4. Corona concern continues to weigh on global economy and markets:
India in a matter of 5 days has added 2.5 lakh Covid 19 patients and now the case load stands above 1.8 million, else where in the US new corona situation is emerging with more outbreaks In the rural side. This is resulting in unabated impact on the country's at large with US being the worst affected, given the record slump of over 30% for the second quarter. Also, the recent high order softness in dollar reveals the problem with which the world's most developed economy is grappling.
In London there is feared a second wave and Australia too is imposing fresh lockdown on account of fresh record surge in corona cases on a daily basis.
This corona crisis if not attended well is seen to leave counties in the most awful situation with GDP following going down to never before levels as was the case with the US, though some of the analyst suggest that corona is now peaking across economies and economies will overcome the fall-out sooner.