The Indian stock market opened at record highs on September 2, 2024, with the BSE Sensex rising by 359.51 points to 82,725.28 and the NSE Nifty crossing 25,333.65. This surge was driven by positive global cues, particularly from the US markets, and expectations of potential interest rate cuts. The market’s upward trend has been attributed to the accumulation of quality large-cap stocks and increased buying by Foreign Institutional Investors (FIIs).However, amidst the stock market rally, India’s manufacturing sector showed signs of slowing growth. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to a three-month low of 57.5 in August, down from 58.1 in July. Despite this decline, the index remained well above its long-term average of 54.0, indicating continued expansion in the manufacturing sector. Pranjul Bhandari, Chief India Economist at HSBC, noted, ‘The Indian manufacturing sector continued to expand in August, although the pace of expansion moderated slightly’.The auto industry reported mixed sales figures for August, with some companies experiencing declines while others saw growth. Tata Motors reported an 8% decline in domestic vehicle sales, and Maruti Suzuki saw a near 4% decline. However, TVS Motor announced a 13% increase in domestic two-wheeler sales, and Hero MotoCorp’s domestic sales increased by nearly 5%.Despite the slight moderation in manufacturing growth and mixed auto sales figures, India’s economic growth in the April-June quarter rose by 6.7% year-over-year. While this represents a slowdown from the 7.8% growth recorded in the previous quarter, India remains the world’s fastest-growing major economy.
Key points
- Indian stock market indices Sensex and Nifty reached new all-time highs on September 2, 2024.
- India’s Manufacturing PMI eased to 57.
- Auto industry reported mixed sales figures for August, with some companies seeing declines and others experiencing growth.
- India’s economic growth in the April-June quarter was 6.
5 in August, indicating a slight slowdown in growth but remaining above the long-term average.
7%, maintaining its position as the world’s fastest-growing major economy.
Contradictions👾While the stock market is reaching new highs, the manufacturing sector is showing signs of slowing growth, potentially indicating a disconnect between financial markets and the real economy.
