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100-Word Take | The reason for the plunge in the US market

No wonder the S&P 500 index fell to a 14-month low on Monday. The market’s fears of a slowdown in economic growth are coming true.

The December Flash Composite Purchasing Managers Index (PMI) for the US, a gauge of private sector activity, has come in at a 19-month low.

The pace of expansion is still solid, but it’s slowing.Chris Williamson, Chief Business Economist at IHS Markit said: “…..momentum is being lost and is likely to continue to fade as we move into 2019. New order inflows hit the lowest since April of last year and expectations regarding future business growth have slipped to the lowest for two-and-a-half years.”

Mahindra and Mahindra shares gained 1.5 percent in morning on Tuesday on signing pact to increase its equity in associate firm Sampo.

“Company has signed a Share Subscription Agreement with Sampo Rosenlew Oy, Finland, an associate of the company and has agreed to subscribe to 822 equity shares and 192 compulsorily convertible preference shares,” the auto major said.

After this acquisition, the voting rights of the company in Sampo would increase from 35 percent to upto 49.04 percent.

“The Investment is intended to consolidate presence in combine harvesters in the global markets, which is in furtherance to the main line of business of the company,” M&M said.

Total acquisition cost for the company is 46,59,534 euro (equivalent to around Rs 37.74 crore at the foreign exchange rate of Rs 81 per Euro).

Founded in 1853, Sampo is a manufacturer of combine harvesters and forest machinery with market presence in Europe, CIS and Algeria.

It had a total revenue of 52 million euro during the period October 2017 – September 2018 against 40 million euro in previous year.At 10:15 hours IST, the stock was quoting at Rs 768.00, up Rs 9.50, or 1.25 percent on the BSE.