Indian bourses end volatile session with small losses

Indian equity benchmarks swung between positive and negative territory throughout the day and settled with minor losses on Thursday, amid expiry of monthly derivative contracts. Both the topline indices made gap-down opening, as the International Monetary Fund (IMF) projected a sharp contraction of 4.5% for the Indian economy in 2020, a historic low, citing the unprecedented coronavirus pandemic that has nearly stalled all economic activities. However, markets witnessed some buying activity in late morning session, as traders took some solace with Union Minister Nitin Gadkari launching the Credit Guarantee Scheme for Sub-ordinate Debt to provide Rs 20,000 crore of guarantee cover to two lakh micro, small and medium enterprises (MSMEs).

But, the recovery proved short lived and the indices tumbled once again near the day's low in early afternoon trade, as investors were also cautious amid media reports that China has significantly ramped up its military presence in Pangong Tso, Galwan Valley and several points in eastern Ladakh. Though, the markets firmed up once again in final hour of session but failed to end the session in green, on the back of weak global markets, which fell after surging US coronavirus cases and the International Monetary Fund's downgrade to global economic projections shook confidence in a recovery. Traders also took a note of report that the government has said that all urban cooperative banks and multi-state cooperative banks will come under the supervision of the Reserve Bank of India (RBI), which is applicable to commercial banks.

On the global front, Asian markets ended lower on Thursday, following the sell-off on Wall Street as the spiking number of new coronavirus cases in several U.S. states dashed hopes of a quick economic recovery. However, European markets were trading mostly in green, after a survey showed consumer confidence in Germany has improved more than expected. According to survey results published by market research group GfK, the forward-looking consumer sentiment index rose to -9.6 in July from revised -18.6 in June reflecting the rapid reopening of the economy after coronavirus-related lockdown and economic stimulus package. Back home, pharma stocks were in focus as Union Minister of Chemicals and Fertilisers D V Sadananda Gowda said the development of bulk drug and medical device parks will help in bringing down India's dependency on imports and making the country emerge as a major pharma exporter.

Finally, the BSE Sensex lost 26.88 points or 0.08% to 34,842.10, while the CNX Nifty was down by 16.40 points or 0.16% to 10,288.90.

The BSE Sensex touched high and low of 35,081.61 and 34,499.78, respectively and there were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.62%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were FMCG up by 2.25%, Healthcare up by 0.97%, Bankex up by 0.62%, Finance up by 0.37%, Utilities up by 0.31% and Telecom up by 0.22%, while IT down by 1.55%, TECK down by 1.21%, Oil & Gas down by 0.95%, Realty down by 0.94% and Energy down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 5.45%, Kotak Mahindra Bank up by 2.75%, Bajaj Finance up by 2.35%, Hindustan Unilever up by 2.04% and ICICI Bank up by 0.79%. On the flip side, Asian Paints down by 3.30%, Infosys down by 2.04%, HCL Technologies down by 1.71%, ONGC down by 1.62% and Mahindra & Mahindra down by 1.59% were the top losers.

Meanwhile, Union Minister Nitin Gadkari has rolled out the Credit Guarantee Scheme for subordinate debt to provide Rs 20,000 crore of guarantee cover to two lakh micro, small and medium enterprises (MSMEs). The funding scheme to help the distressed MSME sector entails a sub debt facility to the promoters of those operational MSMEs that are distressed or nonperforming assets (NPAs). It is also called the 'Distressed Assets Fund Subordinate Debt for MSMEs'.

According to the scheme, the guarantee cover worth Rs 20,000 crore will be provided to the promoters who can take debt from the banks to further invest in their stressed MSME units as equity. It was being felt that the biggest challenge for stressed MSMEs was in getting capital either in the form of debt or equity. Therefore, as part of Atmanirbhar Bharat package, on May 13, 2020, Finance Minister Nirmala Sitharaman had announced this scheme of subordinate debt to the promoters of operational but stressed MSMEs.

It is expected that this scheme would provide much required support to around two lakh MSMEs and will help in reviving the economic activity in and through this sector. It will also help in protecting the livelihoods and jobs of millions of people who depend on them. Promoters of MSMEs meeting the eligibility criteria may approach any scheduled commercial banks to avail benefit under the scheme. The scheme will be operationalised through Credit Guarantee Fund Trust for MSEs (CGTMSE).

The CNX Nifty traded in a range of 10,361.80 and 10,194.50 and there were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were ITC up by 5.55%, Hero MotoCorp up by 2.86%, Bajaj Finance up by 1.89%, Kotak Mahindra Bank up by 1.73% and GAIL up by 1.68%. On the flip side, Asian Paints down by 3.13%, Hindalco down by 2.34%, Indian Oil Corporation down by 2.12%, Eicher Motors down by 2.10% and HCL Technologies down by 2.00% were the top losers.

European markets were trading mostly in green; France’s CAC increased 8.92 points or 0.18% to 4,880.28 and Germany’s DAX rose 26.59 points or 0.22% to 12,120.53, while UK’s FTSE 100 was down by 8.33 points or 0.14% to 6,115.36.

Asian markets ended lower on Thursday amid concerns that a spike in new corona virus cases in major economies, fueled fears of a possible second wave of virus infections and a slower global economic recovery. The International Monetary Fund has sharply lowered its global growth forecast for this year and next and said the pandemic was causing wider and deeper damage to economic activity than first thought. Moreover, fresh tensions between the EU and Washington, too weighed on market sentiment. The United States is considering levying taxes on an additional $3.1 billion in European imports amid a dispute over subsidies to plane maker Airbus. Meanwhile, markets in China, Taiwan and Hong Kong were closed for the Dragon Boat Festival.