Here are the key highlights from today’s trading session:
1. Market snaps 6-day gaining streak; erases almost all the gains seen in last six days
2. Frontline indices end at over 1-week low, slip 2-4%
3. Fresh LAC tensions and new margin implementation weigh on market
4. Sensex, Nifty & Midcap Index see the biggest one-day fall in last 3 months
5. Nifty Bank records the biggest single-day fall in the last one month
6. Sensex declines 839 points to 38,628 and Nifty 260 points to 11,388
7. Nifty Bank falls 769 points to 23,754 and Midcap index 686 points to 16,683
8. All sectoral indices are in the red; volatility index surges 24%
9. 46 Nifty stocks close in the red; Sun Pharma, SBI, Eicher Motors top losers
10. Reliance Industries slips while Future Group stocks gain after the retail business deal
11. ONGC, TCS, Tata Motors & HDFC Bank gain in a weak trading session
12. Market breadth favours declines; advance-decline ratio at 1:7
Closing Bell: Sensex ends 839 points lower, Nifty below 11,400 on escalating India-China tensions
Indian markets reversed gains to end 2 percent lower on Monday after tensions between India and China border near Ladakh escalated. Indian army informed that Chinese troops violated the earlier agreement and carried out provocative military movements to change the status quo on the nights of August 29-30.
The army further said that Indian soldiers pre-empted the People’s Liberation Army (PLA)’s activity on the southern bank of Pangong Tso and undertook measures to strengthen positions and thwart Chinese intentions.
Post the announcement, the Sensex fell as much as 1614 points from the day’s high. It ended 839 points lower at 38,628 while the Nifty fell 260 points to settle at 11,387.
The sentiment was also weighed ahead of the June quarter GDP data today. Experts expect the GDP growth to contract for the April-June period due to the nationwide lockdown implemented to contain the COVID-19 pandemic.
Broader markets also suffered badly with the Nifty Smallcap plunged 4.6 percent and Nifty Midcap down 4 percent. India VIX, which measures fear and volatility in the market, jumped 27 percent today.
Only 2 stocks on the Nifty50 index were in the green during the day – ONGC and. Meanwhile, Sun Pharma, SBI, Zee, Cipla, and Bajaj Finserv led the losses, down over 5 percent each.
All sectors were also in the red. Metal and pharms indices shed over 4.3 percent and 5.2 percent, respectively, while Nifty Auto was down 3.6 percent. Nifty Bank also lost 3.5 percent for the day.
Just In: SEBI not to extend September 1 deadline to move to new ‘pledge, re-pledge system’, said sources to Moneycontrol
– SEBI has sought progress report from NSDL & CDSL
– SEBI has asked about the progress made in last one week
– CDSL & NSDL say large number have done pledge & re-pledge
– Over 600 depository participants (DPs) ahev already logged into CDSL & NSDL
– Move of large DPs registered with depositories, CDSL & NSDL say they are ready with system and can go live w.e.f September 1
– ANMI sought one-month time extension or this month derivative series
– Professional clearing members say over 25% pledges done as of now
Market under pressure ahead of implementation of new margin system.
Most companies that availed loan moratoriums were facing challenges before COVID-19: Crisil
Most companies that availed loan moratoriums have sub-investment grade ratings and were facing challenges before the onset of the pandemic itself due to slowing economic growth, domestic ratings agency Crisil said on Monday.
In a report released on the last day of the moratorium, the agency said it analysed 2,300 non-financial sector companies which have taken recourse to non-payment of loans, and found that three-fourths of entities are sub-investment grade.
The RBI introduced the loan moratorium from March to help businesses and individuals impacted by the pandemic. Interest on the loans will keep getting accrued, but a borrower will not be tagged as a defaulter for non-payment. Click here to read more
Phillip Capital revises portfolio; upgrades retail and logistics: Here are its stock picks
Indian equities have continued to rally, led by better-than-expected June quarter results and global surplus liquidity. The sentiment is also bullish as the Indian economy undergoes unlocking and economic activities expand.
Phillip Capital, in a recent report, said that the urban consumption trends are expected to fare better with further easing of lockdown norms. Retail and logistics sectors have been upgraded by the brokerage as unlocking of the economy continues to boost urban demand and increase economic activity.
It has also upgraded financials to ‘neutral’ on attractive valuations.
The brokerage, however, turned ‘cautiously positive’ on sectors like IT and pharma and downgraded their rating from ‘overweight’ to ‘reduce weight’. Due to an uncertain economic environment, defensive sector positions are still advisable, it added. Read more
Bank and midcap index down over 3%.
Rupee Close: The Indian rupee ended slightly lower on Monday due to the volatility in the equity market. The rupee closed at 73.62 against the US dollar as compared to the Friday’s close of 73.40.
European stocks higher as dovish Fed boosts sentiment; UK closed, Telecom Italia up 2%
European stocks were higher on Monday as dovish U.S. monetary policy signals gave a boost to global risk assets, reported CNBC International.
Most major European bourses were higher as global market players were betting supportive monetary policy measures will continue to buoy stocks despite the economic damage of the coronavirus pandemic.
In the U.K., markets were closed Monday due to a bank holiday. DAX traded 0.55 percent at 13,104 while CAC traded 0.8 percent at 5,083.
Market Update | Sensex falls over 500 points, Nifty below 11,500; Nifty Bank falls over 1,500 points from day’s high
Just In | Supreme Court agrees to hear Vedanta’s plea on opening of Tuticorin Copper Smelter facility. SC has issued a notice to Tamil Nadu government seeking a reply within 4 weeks. Vedanta has challenged the Madras High Court order that upheld the Tamil Nadu government’s order for closure of the plant. In the interim, Vedanta is seeking a stay on the Madras HC order.
Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking Ltd.
Reliance Ind-Future Enterprises deal where Reliance Retail to acquire retail & wholesale, logistics & warehousing biz from Future Group. Rel Retail will acquire businesses from Future Group on slump sale for Rs 24,713 cr. This deal will provide relief to many banks as currently, future group loans are standard assets and the group has taken moratorium which ends on 31st August. Post end of moratorium it was tough for the future group pay its debt payment on time due to weak cash flow. However, this deal will definitely positive for all lenders. Many banks have given a loan to the future group, Bank of India has the highest exposure followed by Axis Bank, Bank of Baroda an SBI. We expect the bank’s haircut would minimal owing to timely action taken by Kishore biryani, However, promoter level debt haircut will be key.
Experts’ View: Vinay Khattar from Edelweiss Wealth says,“This is a buy on dip market, especially given with what has happened with the stock valuation. Most of the stocks which are trading fairly cheap are quite expensive so to speak. So, a buy on dip market and correction should be bought into; that to our mind would be a good strategy to be in this market.”
Experts’ View: Jyoti Roy, DVP- Equity Strategist, Angel Broking says, “We believe that this acquisition by Reliance Industries will help the company further consolidate its position in the retail business and make it the undisputed leader in the retail space. We remain positive on Reliance industries and have a buy rating on the stock with a target of Rs 2,366.”