Post Session: Quick Review

Indian equity benchmarks ended volatile session on a lower note on Thursday. After a positive start of the day, markets traded in green terrain, taking support with report that India has moved four places on the Global Innovation Index (GII) 2020 to rank at 48 since 2019. This makes it the third-most innovative lower middle-income economy in the world, according to the report. India at the 48th place also retains the highest rank in the central and southern Asia region.

Some support also came after the latest IHS Markit Services Purchasing Managers' Index (PMI) released on Thursday indicated a slower rate of decline in business activity across the Indian service sector during August. The ongoing coronavirus pandemic 2019 (COVID-19) restrictions continued to adversely impact client demand and business operations. New business and output continued to contract at marked rates, albeit slower than the records seen in April and May.

However, in late morning deals, key indices turned volatile to alter between green and red terrain and finally ended the day in red terrain, with Federation of Indian Export Organisations (FIEO) stating that the government's decision to cap export incentives under the Merchandise Exports from India Scheme (MEIS) at Rs 2 crore per exporter on exports made between September 1, 2020 to December 31, 2020 is going to seriously affect traders and cause uncertainty.

On the global front, European markets were trading higher as investors monitored key economic data from around the world. Asian markets ended mostly lower on Thursday, even after China's services activity expanded strongly in August as businesses continued to recover from the coronavirus pandemic. The survey data from IHS Markit showed that the Caixin services Purchasing Managers' Index fell marginally to 54.0 from 54.1 in July. However, a score above 50 indicates expansion.

The BSE Sensex ended at 38990.94, down by 95.09 points or 0.24% after trading in a range of 38943.43 and 39236.36. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.40%, while Small cap index was up by 0.74%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 3.37%, IT up by 1.51%, TECK up by 1.34%, Consumer Disc up by 1.01% and Capital Goods up by 0.99%, while Bankex down by 1.51%, Metal down by 0.86%, Energy down by 0.72%, PSU down by 0.65% and Realty down by 0.42% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Titan Co up by 5.71%, Tech Mahindra up by 3.35%, Nestle up by 2.46%, Maruti Suzuki up by 2.19% and Sun Pharma up by 1.69%. On the flip side, ICICI Bank down by 2.42%, Bharti Airtel down by 2.23%, Axis Bank down by 2.02%, Kotak Mahindra Bank down by 1.64% and Power Grid down by 1.57% were the top losers. (Provisional)

Meanwhile, India’s service sector activity downturn eased in the month of August, however, the latest reading, by coming in below the 50.0 neutral value again, indicated a continued decline in business activity. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index was at 41.8 in August from 34.2 in July. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - was at 46.0 in August from 37.2 in July.

The report also noted that the ongoing coronavirus pandemic 2019 (COVID-19) restrictions continued to adversely impact client demand and business operations. New business and output continued to contract at marked rates, albeit slower than the records seen in April and May. Restrictions also contributed to a record increase in outstanding business.

On the price front, service providers reported increased cost burdens for the second month running. The rate of input price inflation was slightly faster than seen in July, but marginal overall. Besides, in line with rising cost burdens, output charges grew at a marginal pace. Sustained revenue losses through the second quarter and increasing cost burdens led companies to raise charges for the first time since March.

The CNX Nifty ended at 11527.45, down by 7.55 points or 0.07% after trading in a range of 11507.65 and 11584.95. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharti Infratel up by 11.45%, Grasim Industries up by 6.82%, Titan Co up by 5.71%, UPL up by 4.19% and Wipro up by 3.34%. On the flip side, ICICI Bank down by 2.46%, Bharti Airtel down by 2.28%, Hindalco down by 2.14%, Axis Bank down by 1.95% and Kotak Mahindra Bank down by 1.88% were the top losers. (Provisional)

Asian markets ended mostly lower on Thursday due to fears about further escalation of the Sino-US tensions following US Secretary Mike Pompeo’s announcement of fresh restrictions on Chinese diplomats in United States. The United States said it would now require senior Chinese diplomats to get State Department approval before visiting US university campuses or meeting local officials. Chinese shares ended lower despite positive data showing China's service sector activity continued to expand in August, albeit at a slightly slower pace, the latest survey from Caixin showed with a services PMI score of 54.0, down from 54.1 in July. Though Japanese shares ended higher, with Chief Cabinet Secretary Yoshihide Suga announced his candidacy for the ruling Liberal Democratic Party's presidential election and formally entering the contest to succeed Shinzo Abe as the country's next prime minister. The Japanese yen slipped and investors shrugged off data showing that the services sector in Japan contracted at a slightly faster pace in August.