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The subdued labour market is likely to recover.
The HSBC India Manufacturing Purchasing Managers' Index (PMI) - a measure of factory production - improved slightly to 55 in June, from 54.8 in May.
According to HSBC, the RBI will keep the policy rate on hold next week, although it is likely to cut the CRR by 0.25 per cent to address the lingering liquidity tightness.
Other major laggards were IndusInd Bank, SBI, Bharti Airtel, ONGC, Tata Steel and Reliance Industries -- falling as much as 6.30 per cent.
Tata Motors was the top Sensex gainer, up nearly 5%.
UN economists announced a likely USD 50 billion drop in the worldwide manufacturing exports in February alone as the extent of the damage to the global economy caused by the novel coronavirus (COVID-19) moved further into focus. Citing the China Manufacturing Purchasing Manager's Index (PMI), Pamela Coke-Hamilton, who heads UNCTAD's Division on International Trade and Commodities, said that it had fallen to 37.5 -- a drop of about 20 points -- the lowest reading since 2004. "This also correlates directly to exports and also implies a two per cent drop in overall exports," she said, with a resulting "ripple effect" worldwide "to the tune of a USD 50 billion fall in exports."
The HSBC Emerging Markets Index, a monthly indicator derived from Purchasing Managers' Index surveys, inched up to 50.6 in May from 50.4 in April, indicating weak output growth across global emerging markets.
Losses largely came from the metal index, followed by power, infrastructure, realty, PSU, oil and gas, capital goods, FMCG, healthcare, auto and banking.
India's manufacturing sector growth slowed marginally in February, although strong domestic orders were likely to support output expansion in the coming months, an HSBC survey has said.
India's services sector growth rate saw a slight fall in July but remained in the positive terrain for the ninth month in a row, amid rise in new orders and employment levels holding up, an HSBC survey says.
Amid decelerating economic growth and falling industrial output, India's services sector has shown signs of promise in May recording the fastest pace of growth in the past three months, says an HSBC survey.
Manufacturing of consumer goods, like food and liquor continued to improve in September.
Brokerage Edelweiss Securities said if the NDA returns to power with a clear majority in line with exit polls, markets would rejoice the policy continuity.
The HSBC India Manufacturing Purchasing Managers' Index for the manufacturing industry climbed from 49.6 in October to 51.3 in November on the back of a rebound in new orders and output.
The biggest losers in the Sensex pack were Vedanta, Tata Steel, M&M, Tata Motors, Maruti, Hero MotoCorp, PowerGrid, Bharti Airtel, SBI and Coal India -- falling up to 4.48 per cent.
The minutes of the December MPC meet reveal members felt the current spike in the headline inflation rate was due to a temporary supply shock on the food front, expected to moderate by the second quarter of 2020-21.
The NSE Nifty gained 77.85 points, or 0.71 per cent, to finish at 11,008.30. Intra-day, it shuttled between 10,821.55 and 11,035.65.
Observing that the economic recovery was not yet fully entrenched, the RBI Governor said recovery is likely to be gradual.
In the United States, economic data is likely to take a back seat next week.
The GST rate for the sector has not yet been finalised by the government.
The trade impact of the coronavirus epidemic for India is estimated to be about 348 million dollars (approximately Rs 25 billion) and the country figures among the top 15 economies most affected as slowdown of manufacturing in China disrupts world trade, according to a UN report. Estimates published by United Nations Conference on Trade and Development on Wednesday said that the slowdown of manufacturing in China due to the coronavirus (COVID-19) outbreak is disrupting world trade and could result in a 50 billion dollar decrease in exports across global value chains.
Stating that COVID-19 has not yet been contained in India, the rating agency in a statement said the government stimulus package is low relative to countries with similar economic impacts from the pandemic. "The COVID-19 outbreak in India and two months of lockdown -- longer in some areas -- have led to a sudden stop in the economy. That means growth will contract sharply this fiscal year (April 2020 to March 2021)," it said. "Economic activity will face ongoing disruption over the next year as the country transitions to a post-COVID-19 world."
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The rupee was last at 62.05/06 after gaining to as high 61.9650 against the dollar, its highest since Nov 19. It had closed at 62.44/45 on Friday.
A reality check on the India vs China growth story.
The finance ministry on Tuesday cited "green shoots" of recovery in agriculture, manufacturing and services sectors, and said the prompt policy measures taken by the government and RBI have helped reinvigorate the economy with minimal damage. Stating that the agricultural sector remains the foundation of the Indian economy, the ministry said that a normal monsoon, as has been forecast, should support the rebooting of economy.
HSBC's purchasing managers' index was released on Tuesday.
The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- an indicator of manufacturing activity -- fell to 49.6, down from 52.3 in November, coming below the crucial 50 threshold which separates contraction from expansion.
n the broader market, both the BSE Midcap and Smallcap indices, were up 1.2% and 0.7% each.
"Purchasing managers' index for April has risen above the 50 mark to 53.3 suggesting industrial output expanded in sequential terms in April. Therefore, we continue to expect a recovery in manufacturing production in the months ahead," DBS Bank said. PMI gives an indication of the country's manufacturing activity and its future outlook.
Little indication of growth surge in either industry or services till well into FY14.
Although we all have tastebuds that are dying to sample all the yummy food around us, we must remember that anything in excess is bad.
The S&P BSE Sensex ended 46 points lower at 24,824 and Nifty50 settled at 7,555, down by 8 points after hitting intra-day high of 7,600.45.
The market breadth in BSE remains positive with 1,554 shares advancing and 1,196 shares declining.
Indications of a revival in domestic demand emerged on Monday, with the monthly ABN Amro Purchasing Managers' Index crossing 50 for the first time since October 2008.
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Likely to set the ball rolling for Rs 1.72-lakh-cr projects today
Investor sentiment got a boost following remarks from the Russian President Putin that allayed fears of an imminent military conflict in Ukraine
Market sentiment suffered a jolt after other Asian markets closed with widespread losses and European markets dropped in early trade
The PMI has risen sharply from 52.9 in July, the lowest reading in the 29-month history of the survey.
'The large scale and widespread shrinking of the labour force in November, the peaking of unemployment in October and the fall in lead indicators in October and November point towards a worsening of the slowdown of the Indian economy in the third quarter of 2019-20,' says Mahesh Vyas.
That prompted manufacturers to add jobs for the first time since June.
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