Indian shares fall due to weak industrial print and global cues.

Indian shares fall due to weak industrial print and global cues.

Indian shares hit one-month low as concerns over industrial output and China’s consumption weigh

Indian shares tumbled to a more than one-month low on Monday, following the trend of Asian markets. The decline was attributed to concerns over weak local industrial output and consumption in China, the largest consumer in the world. At the same time, investors eagerly awaited domestic inflation data, due to be released later in the day.

The Nifty 50 index fell by 0.6% to reach 19,310, while the S&P BSE Sensex dropped 0.5% to stand at 64,989, as of 10:28 a.m. IST. Metal stocks were hit the hardest, falling by about 2%. The auto sector and the public sector bank index were also not spared, both experiencing declines of over 1%.

In addition to the stock market slump, the Indian rupee also suffered a setback, falling below 83 to the U.S. dollar for the first time since October 2022. This decline can be attributed to the rise in U.S. yields, which put pressure on Asian currencies in general.

The weak performance of India’s industrial output further added to this gloomy scenario. In June, the growth rate of industrial output slipped to a three-month low of 3.7% year-on-year. Furthermore, disappointing credit data heightened concerns about China’s slowing economy, exacerbated by shocks in the property sector.

Anita Gandhi, the whole-time director at Arihant Capital Markets, commented on the situation, stating that “Industrial output numbers were pretty weak, which is showing some weakness on the macro side as it is very important from the capex, growth, and manufacturing angle.”

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Adding to the concerns, foreign investors, who had previously bet on the country’s growth and cooling inflation in the last quarter, have turned into net sellers in recent sessions. On Friday alone, foreign investors sold shares worth 30.73 billion rupees ($370.8 million). This shift in investor sentiment is causing some anxiety among Indian investors, according to analysts.

Investors are now eagerly awaiting India’s retail inflation data. It is expected that inflation accelerated to 6.40% in July, driven by surging food prices. This would breach the upper end of the Reserve Bank of India’s 2%-6% tolerance band for the first time in five months.

Addressing individual stocks, Adani Ports suffered a decline of 2.7% after its auditor, Deloitte, resigned due to concerns over certain related party transactions. Adani Enterprises, the flagship company of the Adani Group, experienced an even greater decline of 4.3%.

The combination of weak industrial output, concerns over China’s consumption, and the declining value of the Indian rupee have created a challenging environment for Indian shares. However, investors remain hopeful for a positive outcome, anticipating positive inflation data that could bring some relief. As always, it is important for investors to monitor the market and make informed decisions based on the evolving economic landscape.

List: Key Factors Affecting Indian Share Prices

• Weak industrial output
• Concerns over consumption in China
• Declining value of the Indian rupee
• Foreign investors turning net sellers
• Anticipation of India’s retail inflation data

N.B. The mentioned data and figures are subject to change as per the latest market situation and updates.

• AMERS
• ASIA
• ASXPAC
• BLR
• BO
• CMPNY
• ECI
• ECO
• ECON
• EMRG
• GOVACT
• GVGVF
• GVGVF1
• HOT
• IN
• IPR
• MCE
• MKTREP
• NAMER
• PLCY
• REP
• SASIA
• STX
• TOPNWS
• US