After opening the day in red, share markets in India continued the downtrend and are currently trading weak amid fresh missile launch threats from North Korea. Sectoral indices are trading on a negative note with stocks in the realty sector and stocks in the IT sector leading the losses.
The BSE Sensex is trading down by 235 points (down 0.7%), and the NSE Nifty is trading down by 82 points (down 0.8%). Meanwhile, the BSE Mid Cap index is trading down by 1%, while the BSE Small Cap index is trading down by 0.9%. The rupee is trading at 64.10 to the US$.
In news from the manufacturing sector, the Indian manufacturing activity contracted for the first time this calendar year in July following the launch of the Goods and Services Tax (GST).
According to the Nikkei Purchasing Managers’ Index (PMI) survey by Markit, India’s manufacturing sector rebounded smartly in August after contracting in July. Introduction of the GST weighed heavily on the Indian manufacturing industry in July.
The PMI is the reading of the country’s manufacturing sector output and is updated monthly. A reading above 50 indicates expansion, while any score below the mark denotes contraction.
PMI rose to 51.2 in August, from 47.9 in July putting the sector on the growth track after witnessing contraction in July. Notably, the PMI reading in July was its lowest point since February 2009, indicating the first deterioration in manufacturing and business conditions in 2017.
Manufacturing Activity Rebounds in August
Manufacturing sector expansion came a day after government data showed manufacturing growth in the first quarter of the current financial year fell to 1.2% from 10.7% a year ago, bogged down by the lingering effects of demonetisation and GST rollout and making India’s GDP growth slump unexpectedly to a three-year low of 5.7%.
The survey noted that the GST launch affected demand and the reductions in output, new orders and purchasing activity were all the steepest since early 2009.
