Post Session: Quick Review

Indian equity benchmarks witnessed sharp fall on Monday’s trading session. Key indices made a positive start of the day, taking support with report that the Ministry of Home Affairs (MHA) has issued new guidelines for opening up of more activities in areas outside the Containment Zones. In Unlock 4, which will come into effect from September 1, 2020, the process of phased re-opening of activities has been extended further. Under the new guidelines, states are not to impose any local lockdown (State/ District/ sub-division/City/ village level), outside the containment zones, without prior consultation with the central government. adding more optimism,  Public Enterprises Selection Board (PESB) chairman Rajiv Kumar said that central public sector enterprises, which have a combined net worth of close to Rs 12 lakh crore, can boost India's GDP by 2-3 percent by leveraging funds and stepping up capital expenditure.

But, in late morning deals, markets erased all of their gains and ended the trading day in deep red terrain, as apex exporters body FIEO has expressed concerns over freezing of bank accounts of some exporters by the Enforcement Directorate (ED) without giving any warning, hearing or reasons, and has sought Commerce Ministry's intervention in the matter. In a letter to Commerce Secretary Anup Wadhawan, Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said freezing of bank accounts without any investigation is against the principles of natural justice and is causing irreparable damage to exporters. Some worries also came with report that India's fiscal deficit is expected to touch 7 per cent of GDP in 2020-21 fiscal as against budget estimate of 3.5 per cent, with revenue collections being hit amid disruptions in economic activities due to lockdowns.

On the global front, European markets were trading mostly in green as heavyweight oil and gas players were supported by higher crude prices and merger talks in major French utilities saw the sector outperform regional peers. Asian markets ended mostly lower on Monday, after industrial output in Japan climbed a seasonally adjusted 8.0 percent on month in July. That beat forecasts for a gain of 5.8 percent and was up from 1.9 percent in June. On a yearly basis, industrial production sank 16.1 percent - missing forecasts for a decline of 15.0 percent after tumbling 18.2 percent in the previous month.

The BSE Sensex ended at 38628.29, down by 839.02 points or 2.13% after trading in a range of 38395.89 and 40010.17. There were 2 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 3.79%, while Small cap index was down by 4.37%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 4.70%, Healthcare down by 4.62%, Basic Materials down by 4.26%, Utilities down by 3.85% and Power down by 3.79%, while there were no gaining sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 1.74% and TCS up by 0.86%. On the flip side, Sun Pharma down by 7.34%, SBI down by 5.65%, Bajaj Finserv down by 5.34%, Bajaj Finance down by 5.10% and NTPC down by 5.07% were the top losers. (Provisional)

Meanwhile, in order to review the implementation of the resolution framework for COVID-19 related stress in bank loans, Union Minister for Finance & Corporate Affairs Nirmala Sitharaman is going to hold a meeting with the top management of Scheduled Commercial Banks and non-banking financial companies (NBFCs) on September 3.

The review will focus on enabling businesses and households to avail of the revival framework on the basis of viability, necessary steps like finalising bank policies and identifying borrowers, and discussing issues that require addressing for smooth and speedy implementation.

The meeting comes ahead of the expected announcement of the KV Kamath-led panel’s recommendations on eligibility parameters for the restructuring of loans to soften the blow to both borrowers and the lenders in the wake of the pandemic.

The CNX Nifty ended at 11387.50, down by 260.10 points or 2.23% after trading in a range of 11325.85 and 11794.25. There were 4 stocks advancing against 46 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 1.99%, TCS up by 0.84%, Tata Motors up by 0.28% and HDFC Bank up by 0.12%. On the flip side, Sun Pharma down by 6.39%, SBI down by 5.71%, Eicher Motors down by 5.49%, Bajaj Finserv down by 5.43% and Indusind Bank down by 5.33% were the top losers. (Provisional)

European markets were trading mostly in green, France’s CAC increased 63.27 points or 1.26% to 5,066.21 and Germany’s DAX was up 108.51 points or 0.83% to 13,141.71.

Asian markets ended mostly lower on Monday after reaching a 29-month high earlier in the day in reaction to an upbeat reading on China's service sector activity data. Chinese shares ended slightly lower as investors reacted to mixed economic data.  The manufacturing sector in China continued to expand in August, albeit at a slower pace, the latest survey from the National Bureau of Statistics revealed with a manufacturing PMI score of 51.0. That missed expectations for a reading of 51.2 and it's down from 51.1 in July. Meanwhile, the non-manufacturing index came in with a score of 55.2 - beating forecasts for 55.0 and up from 54.2 in the previous month in a hopeful sign of reviving consumer demand. However, Japanese shares outperformed on expectations there is likely to be continuity in both fiscal and monetary policy.