Sensex, Nifty remain sluggish in late morning deals

Indian equity benchmarks remained sluggish in late morning deals, on the back of negative cues from other Asian markets. Heavy selling at IT and TECK counters kept the markets below their neutral lines. However, downside remained capped, as in a major relief to corporate and retail borrowers, the Reserve Bank permitted banks to go for a one-time restructuring of loans that are facing stress due to the COVID-19 crisis with a view to mitigating risks to financial stability. The restructuring will be allowed as per the prudential framework issued on June 7, 2019.

On the global front, Asian markets were trading lower, even after China's exports grew notably in July as most of the economies relaxed lockdown measures introduced to curb the coronavirus spread. The data from the General Administration of Customs revealed that driven by demand for medical supplies, electronics and automobiles, exports grew 7.2 percent on a yearly basis in July, confounding expectations for a drop of 0.2 percent.

The BSE Sensex is currently trading at 37936.67, down by 88.78 points or 0.23% after trading in a range of 37787.38 and 38044.17. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.29%, while Small cap index was up by 0.82%.

The top gaining sectoral indices on the BSE were Power up by 1.09%, Auto up by 0.88%, Utilities up by 0.87%, Consumer Discretionary up by 0.83% and FMCG up by 0.81%, while IT down by 1.07%, TECK down by 0.87%, Bankex down by 0.20%, Healthcare down by 0.16% and Realty down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.18%, Bajaj Finserv up by 1.68%, Maruti Suzuki up by 1.30%, ONGC up by 1.15% and Bajaj Finance up by 1.13%. On the flip side, HCL Tech down by 2.60%, Infosys down by 1.54%, Sun Pharma down by 1.13%, HDFC Bank down by 0.97% and Ultratech Cement down by 0.80% were the top losers.

Meanwhile, with an aim to help small financiers and home loan companies amid COVID-19 difficulties, the Reserve Bank of India (RBI) has announced an additional special liquidity facility (ASLF) of Rs 10,000 crore equally split between the National Bank for Agriculture and Rural Development (Nabard) and the National Housing Bank (NHB). RBI Governor Shaktikanta Das said the liquidity facility to both the Nabard and the NHB will be offered at the policy repo rate.

Das said ASLF of Rs 5,000 crore will be given to the NHB to ‘shield the housing sector from liquidity disruptions and augment the flow of finance to the sector through housing finance companies (HFCs)’. Similarly, Rs 5,000 crore will be given to Nabard to ‘ameliorate the stress being faced by smaller non-bank finance companies (NBFCs) and micro-finance institutions in obtaining access to liquidity’.

The RBI has also announced to harmonise the present differential system of capital allocation dictating banks' investments in debt mutual funds and debt exchange traded funds, which will result in substantial capital savings for banks and give a boost to the corporate bond market. On the priority sector lending front, guidelines have been reviewed to give an incentive for banks to address the regional disparities in the flow of priority sector credit.

The CNX Nifty is currently trading at 11185.15, down by 15.00 points or 0.13% after trading in a range of 11142.05 and 11213.80. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.21%, UPL up by 1.90%, BPCL up by 1.75%, Eicher Motors up by 1.61% and Bajaj Finserv up by 1.57%. On the flip side, HCL Tech down by 2.62%, Infosys down by 1.65%, Sun Pharma down by 1.17%, HDFC Bank down by 1.01% and Wipro down by 0.91% were the top losers.

Asian markets were trading lower; Taiwan Weighted dropped 89.68 points or 0.69% to 12,823.82, Jakarta Composite lost 54.95 points or 1.06% to 5,123.32, KOSPI fell 1.00 points or 0.04% to 2,341.61, Straits Times trembled 25.38 points or 0.99% to 2,533.72, Shanghai Composite declined 49.03 points or 1.45% to 3,337.43, Nikkei 225 slipped 128.60 points or 0.57% to 22,289.55 and Hang Seng decreased 566.15 points or 2.27% to 24,364.43.