After opening the day in red, share markets in India witnessed negative trading activity throughout the day and ended the day in red. Sectoral indices traded mixed, with stocks in the power sector and stocks in the metal sector, leading the losses.
At the closing bell, the BSE Sensex stood lower by 159 points (down 0.5%) and the NSE Nifty closed down by 57 points (down 0.5%). The BSE Mid Cap index ended the day down 0.8%, while the BSE Small Cap index ended the day down by 0.7%.
The rupee was trading at Rs 68.69 against the US$ in the afternoon session. Oil prices were trading at US$ 78.67 at the time of writing.
Asian stock markets finished mixed. As of the most recent closing prices, the Hang Seng was up by 1.6% and the Shanghai Composite was down by 2.5%. The Nikkei 225 was down by 2.2%. Meanwhile, European markets, were trading on a positive note. The FTSE 100 was up by 0.4%. The DAX, was down by 0.8% while the CAC 40 was down by 0.9%
In news from the manufacturing sector. Activity in India's manufacturing sector expanded at its fastest pace in seven months in June supported by strong domestic and export orders.
According to the Nikkei Purchasing Managers' Index (PMI) survey by Markit, India's manufacturing continued to increase the pace of expansion in June after a good showing in in May.
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 in June stood at 53.1, an increase from the 51.2 reading in May, indicating a sustained expansion. This is the eleventh consecutive month that the manufacturing PMI remained above the 50-point mark, which separates expansion from contraction. Notably, the PMI reading in June expanded at its fastest pace in the last seven months.
Manufacturing Activity Eases Pace in May
A surge in oil prices over the past few months means India's retail inflation has remained above the Reserve Bank of India's (RBI) medium-term target of 4% increasing pressure on the central bank to act sooner than expected/
On the prices front, a build-up of inflationary pressures re-emerged as input cost and output inflation was at the strongest since February due to the upswing in global oil prices.
Though Indian manufacturers remained cheerful about growth prospects, worries about the possibility of unexpected policy decisions and a risk of an international trade war weighed on confidence.
Moving on to news from stocks in the steel sector. Tata Steel share price was in focus today after the steel major signed joint venture (JV) agreements with Thyssenkrupp AG to create Europe's second largest steel company.
Tata Steel has approved the terms to create a 50:50 joint venture which will combine the European steel businesses of the company and Thyssenkrupp AG and has adopted resolutions for the signing of the definitive agreement.
JV company will be positioned as a leading pan European high quality flat steel producer with a strong focus on performance, quality and technology leadership to support customers' sustainability ambitions.
This will be the largest deal in Europe's steel industry since the takeover of Arcelor by Mittal in 2006. The 50:50 joint venture - to be named Thyssenkrupp Tata Steel - will have about 48,000 workers and about 17 billion Euros (US$19.9 billion) in sales.
Following the news, Tata Steel share price ended the day down by 1.2%.
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