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After gaining for seven straight sessions key benchmark equity indices ended flat in a volatile session on June 1 as investors preferred to book profits across the board. Sensex closed 2 points lower at 51,934, while the broader Nifty 50 slipped 7 points or 0.05% to 15,574. However, on an intra-day basis, the 50-share index hit a fresh record peak of 15,660.

“Indices traded in a range and closed flat even as Corporate India has been announcing capital expenditure plans since the start of the fiscal. Weak PMI data released today did not help sentiments as we saw profit-taking across the Metal space today. In the broader market, we saw keen interest in select pockets of Textiles & Pharma names,” said S Ranganathan, Head of Research at LKP Securities.

Gainers & losers

ONGC (up 3.52%), Bajaj Finance (up 2.93%), SBI (up 1.97%), HDFC (up 1.01%) and Bajaj Auto (up 0.97%) were the top gainers on the Sensex.

ICICI Bank (down 1.80%), UltraTech Cement (down 1.63%), Asian Paints (down 1.51%), Axis Bank (down 0.69%) and ITC (down 0.65%) were the laggards on Sensex.

Buzzing sectors

Barring Nifty IT (up 0.11%) & Nifty Pharma (up 0.04%) all major sectoral indices ended in the red. Nifty Metal tanked 0.78% while Nifty Realty & Nifty Bank slipped around 0.53% each and the Nifty FMCG index ended with marginal losses of 0.01%.

Even the volatility gauge India VIX after hitting a 52-week low rose by almost 3% to 17.39 levels.

Broader market

Among the broader market indices, the BSE SmallCap index fell 0.31%. However, BSE MidCap ended flat with a gain of 0.01%.

Market breadth indicated that bears had an upper hand in today’s session as 1,197 stocks declined, while 721 advanced and 335 scrips remained unchanged.

Manufacturing PMI

The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) stood at 50.8 in May, down from 55.5 in April. The latest figure pointed to a marginal improvement in business conditions that was the weakest in the current ten-month sequence of expansion.

Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit, said: “The Indian manufacturing sector is showing increasing signs of strain as the COVID-19 crisis intensifies. Key gauges of current sales, production and input buying weakened noticeably in May and pointed to the slowest rates of increase in ten months. In fact, all indices were down from April. Amid a lack of new work, goods producers reduced headcounts again, with the rate of job shedding quickening in May.

That said, the detrimental impacts of the pandemic and associated restrictions saw in the manufacturing sector are considerably less severe than during the first lockdown when unprecedented contractions had been recorded.

Growth projections were revised lower, as firms became more worried about the escalation of the pandemic and local restrictions. The overall degree of optimism towards the year-ahead outlook for the output was at a ten-month low, a factor that could hamper business investment and cause further job losses.

Global markets

The US Dow Jones index futures were up 166 points, indicating a positive opening in the US market today.

Shares in Europe and Asia advanced on Tuesday, 1 June 2021. China’s factory activity expanded at the fastest pace this year in May. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 52.0 last month, the highest level since December and inching up from April’s 51.9.

Markets in the U.S. were closed on Monday on account of Memorial Day.

Meanwhile, the global economic outlook is improving as vaccine rollouts allow businesses to resume operations and as the United States pumps trillions of dollars into the world’s largest economy, the Organisation for Economic Cooperation and Development (OECD) said on Monday, nudging its forecasts higher.

The global economy is set to grow 5.8% this year and 4.4% next year, OECD said, raising its estimates from 5.6% and 4% respectively in its last forecasts released in March.