Weakness continues in markets; banking, metal drag

Indian equity benchmarks continued their weak trade in the morning session on account of selling in frontline blue chip counters. The sentiments remained on pessimistic note reacting to Consumer Price Index (CPI) data, which increased to 6.09% in June 2020, mainly on account of higher prices of food items. The CPI was 3.18% in June 2019. The sentiments also weighed down by private report stated that a longer wait for a vaccine against the COVID-19 virus may lead to a contraction of up to 7.5 percent in the Indian GDP in FY21. It also revised down their base case estimates on the real GDP within a week, and now expect it to contract by 4 percent because of a drop in economic activity. Besides, a new round of restrictions to check coronavirus and an evolving tension between the US and China spooked investors. On the sectoral front, stocks related to defence sector remained in focus as the DPIIT would soon approach the Union Cabinet to seek approval for relaxing norms to allow up to 74 percent foreign direct investment (FDI) in defence manufacturing under the automatic route, with a view to attract overseas players in the sector.

On the global front, Asian markets were trading mostly in red, as skepticism set in about the recent upward momentum in global markets given rising confirmed coronavirus cases and percolating tensions between the US and China. The White House's decision to reject nearly all Chinese maritime claims in the South China Sea added to investor jitters. Back home, the BSE Sensex is currently trading at 36355.67, down by 338.02 points or 0.92% after trading in a range of 36331.33 and 36538.10. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.51%, while Small cap index was down by 0.35%.

The top gaining sectoral indices on the BSE were IT up by 0.45%, Healthcare up by 0.45%, TECK up by 0.33%, Oil & Gas up by 0.18% and Telecom up by 0.13%, while Bankex down by 1.96%, Metal down by 1.56%, Auto down by 1.37%, Power down by 1.18% and PSU down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 1.13%, Infosys up by 0.71%, Nestle up by 0.38%, Bharti Airtel up by 0.27% and Ultratech Cement up by 0.16%. On the flip side, Indusind Bank down by 3.89%, HDFC down by 3.29%, Bajaj Finserv down by 2.82%, Axis Bank down by 2.78% and HDFC Bank down by 2.55% were the top losers.

Meanwhile, Niti Aayog Vice Chairman Rajiv Kumar has said, while presenting Voluntary National Review (VNR) at the United Nations High-level Political Forum (HLPF) on Sustainable Development, 2020 hosted digitally, with several participants from other countries, there is a need to translate the coronavirus-led pandemic situation into an opportunity to meet the sustainable development goals. HLPF is the international platform for follow-up and review of progress on the 17 Sustainable Development Goals (SDGs).

He mentioned ‘we should all obliterate all divisions and distinctions amongst us and come together to try and convert the prevailing situation into an opportunity for accelerating our progress towards achieving the SDG targets.’ Expressing solidarity with all the countries grappling with challenges brought about by the pandemic, he highlighted the key features of India’s response to the pandemic under the Aatmanirbhar Bharat campaign.

He also dwelt on the remarkable progress India has achieved in reducing multi-dimensional poverty, providing food safety, ensuring education for all, universalising access to electricity, clean cooking fuel and sanitation, while also operationalising the world’s largest health insurance programme by covering 500 million citizens.
The CNX Nifty is currently trading at 10707.55, down by 95.15 points or 0.88% after trading in a range of 10697.50 and 10755.65. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 1.05%, Wipro up by 1.01%, Infosys up by 0.72%, Cipla up by 0.67% and UPL up by 0.56%. On the flip side, Indusind Bank down by 3.92%, HDFC down by 3.12%, Bajaj Finserv down by 2.87%, Axis Bank down by 2.73% and Zee Entertainment down by 2.68% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 436.16 points or 1.69% to 25,335.96, Nikkei 225 slipped 216.25 points or 0.95% to 22,568.49, Taiwan Weighted dropped 50.03 points or 0.41% to 12,161.53, Shanghai Composite declined 37.99 points or 1.1% to 3,405.30, Straits Times trembled 15.83 points or 0.6% to 2,615.25 and KOSPI fell 13.95 points or 0.64% to 2,172.11.

On the flip side, Jakarta Composite soared 6.63 points or 0.13% to 5,071.08.