Bears hold tight grip over Dalal Street

Bears were holding tight grip over the Dalal Street in late morning deals, with both Sensex and Nifty trading in deep red with notable losses. Negative cues from other Asian markets kept indices lower in late morning session. In line with the larger peers, the broader indices were too facing pressure. Sentiments were negative, as corporate revenues declined by 31 per cent in the June quarter, but profit margins decreased by a lesser degree to 3.6 per cent in the April-June period. Domestic rating agency Icra analysed financial results of 489 companies to arrive at the conclusion. It can be noted that the GDP of the country contracted by 23.9 per cent during the quarter, which had witnessed total lockdown of the country for the first two months to contain the spread of the coronavirus infections.

On the global front, Asian markets were trading in red, after Singapore's retail sales monthly growth slowed in July, yet remained in double-digits, while sales continued to fall on an annual basis, as the impact of the coronavirus pandemic persisted. Retail sales grew 27.4 percent month-on-month in July. The statistical office attributed the monthly growth to a lower base in June 2020, when most physical stores were closed until June 18.

The BSE Sensex is currently trading at 38519.34, down by 471.60 points or 1.21% after trading in a range of 38299.12 and 38583.35. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.54%, while Small cap index was down by 0.47%.

The only gaining sectoral indices on the BSE were Auto up by 0.69% and Consumer Discretionary up by 0.14%, while Bankex down by 1.90%, Power down by 1.60%, Realty down by 1.29%, Capital Goods down by 1.06% and PSU down by 1.04% were the top losing indices on BSE.

The only gainers on the Sensex were Maruti Suzuki up by 2.97% and TCS up by 0.28%. On the flip side, Axis Bank down by 2.13%, ICICI Bank down by 2.12%, HDFC down by 2.08%, SBI down by 2.02% and ITC down by 1.90% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has asked banks and NBFCs to roll out loan restructuring scheme for COVID-19 related stress by September 15 and provide adequate support to the borrowers following the lifting of moratorium on repayment of debts. The minister urged lenders to immediately put in place a board-approved policy for resolution at the review meeting with heads of scheduled commercial banks and NBFCs. The six months moratorium on payment of EMIs ended on August 31.

Sitharaman asked lenders to identify eligible borrowers and reaching out to them, and the quick implementation of a sustained resolution plan by lenders for the revival of every viable business. Banks are in the process of getting a board-approved restructuring framework in line with the Reserve Bank of India’s (RBI’s) framework and eligibility defined by the central bank in its notification on August 6.

The Finance Minister also emphasised that resolution schemes must be rolled out by lenders by September 15, 2020, and a sustained media campaign to create awareness be carried out thereafter. On their part, bankers assured the Finance Minister that they are ready with their resolution policies and have started the process of identifying and reaching out to eligible borrowers and that they will comply with the timelines stipulated by the RBI. The Ministry of Finance has also been engaging with the RBI to ensure that the lenders are assisted by the central bank in the resolution process.

The CNX Nifty is currently trading at 11397.35, down by 130.10 points or 1.13% after trading in a range of 11332.85 and 11416.05. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.07%, Maruti Suzuki up by 2.96%, Zee Entertainment up by 0.73%, Hindalco up by 0.57% and TCS up by 0.28%. On the flip side, Wipro down by 2.19%, Axis Bank down by 2.17%, UPL down by 2.14%, ICICI Bank down by 2.14% and HDFC down by 2.05% were the top losers.

Asian markets were trading in red; Hang Seng decreased 456.42 points or 1.83% to 24,551.18, Jakarta Composite lost 70.86 points or 1.34% to 5,209.95, Straits Times trembled 35.92 points or 1.42% to 2,495.87, Shanghai Composite declined 46.84 points or 1.38% to 3,338.14, KOSPI fell 27.29 points or 1.14% to 2,368.61, Taiwan Weighted dropped 127.56 points or 1% to 12,630.41 and Nikkei 225 slipped 293.10 points or 1.25% to 23,172.43.