Benchmarks continue to trade in deep red

Key Indian benchmarks remained sluggish in late morning session, tracking weak cues from other Asian markets and persistent foreign fund outflows. Weak broader indices along with heavy sell off at Energy, PSU and Metal counters dragged the markets lower. Moreover, poor auto sales data for the month of July on the back of liquidity constraint at NBFCs and disappointing June-quarter corporate earnings have weighed on the markets. Kashmir issue also dampened investors' sentiment after the authorities stepped up security at vital installations and in sensitive areas, suspended mobile internet services and either arrested or detained several leaders in fast-paced developments on Sunday night. Selling further crept in as Foreign investors have withdrawn a net amount of Rs 2,881 crore from the Indian capital markets in the first two sessions of August on account of domestic as well as global headwinds. According to latest depositories data, FPIs pulled out a net sum of Rs 2,632.58 crore from equities and Rs 248.52 crore from the debt segment during August 1-2, taking the cumulative net outflow to Rs 2,881.10 crore. Traders overlooked India's services PMI activity which bounced back in July and expanded at the fastest pace in a year after contracting the previous month, driven largely by strong growth in international demand. The IHS Markit Services Purchasing Managers’ Index rose to a one year high of 53.8 in July, up from 49.6 in June and comfortably above the 50-mark that separates growth from contraction.

On the global front, Asian markets were trading in red in line with the weak cues from U.S. markets, as the flared up US-China trade war fuelled global growth concerns. Back on street, in scrip specific developments, shares of Bata India gained on planning to add 100 stores in FY20. However, United Bank of India fell as RBI imposed penalty of Rs 1 crore on the Bank.

The BSE Sensex is currently trading at 36504.37, down by 613.85 points or 1.65% after trading in a range of 36443.41 and 36844.05. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.79%, while Small cap index was down by 2.39%.

The few gaining sectoral indices on the BSE were IT up by 0.73%, TECK up by 0.54%, while Energy down by 3.04%, PSU down by 2.76%, Metal down by 2.72%, Industrials down by 2.68%, Bankex was down by 2.68% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.52%, Infosys up by 1.13%, Bharti Airtel up by 0.45% and HDFC was up by 0.32%. On the flip side, Yes Bank down by 7.13%, Tata Motors - DVR down by 5.62%, Tata Motors down by 5.32%, SBI down by 4.73% and Tata Steel was down by 4.02% were the top losers.

Meanwhile, The Reserve Bank of India (RBI) has clarified that non-banking finance companies (NBFCs) shall not impose foreclosure charges/pre-payment penalties on any floating rate term loans sanctioned for purposes other than business to individual borrowers, with or without co-obligants.

Foreclosure charges are part of the fee income for any lender and adds to its bottom-line. It further stated that the relevant rules governing the same have been updated to reflect the change.

These direction covers both deposit-taking and non-deposit-taking NBFCs which are considered systemically important ones. The RBI, in May 2014, had barred commercial banks from charging such fees or penalties from individual borrowers with mortgage loans. But banks are free to charge same on non-secured loans like personal loans.

The CNX Nifty is currently trading at 10804.45, down by 192.90 points or 1.75% after trading in a range of 10788.60 and 10895.80. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.48%, Infosys up by 1.17%, Bharti Airtel up by 0.33%, HDFC up by 0.24% and Bajaj Auto was up by 0.10%. On the flip side, Yes Bank down by 7.42%, Tata Motors down by 5.36%, SBI down by 4.85%, Hindalco down by 4.55% and Tata Steel was down by 4.29% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 756.87 points or 2.81% to 26,161.71, Nikkei 225 slipped 466.67 points or 2.21% to 20,620.49, Straits Times trembled 63.12 points or 1.94% to 3,197.99, Jakarta Composite lost 110.86 points or 1.75% to 6,229.32, KOSPI fell 47.51 points or 2.38% to 1,950.62, Shanghai Composite declined 25.86 points or 0.9% to 2,841.98 and Taiwan Weighted was down by 117.21 points or 1.11% to 10,431.83.