Volatility grips Dalal Street

Volatility is gripping the Dalal Street in late morning deals, with both Sensex and Nifty swinging between green and red terrain. Negative cues from other Asian markets impacted Indian equity markets. Traders were cautious, amid reports that fear of COVID-19 among the people is hurting economic activity and the government may introduce a second stimulus package only after the concerns abate. Union Expenditure Secretary T V Somanathan also said 40 per cent of the cash transferred by the government to stimulate the economy earlier has not been spent by the beneficiaries, which reflects people's desire to save due to the uncertainties.

On the global front, Asian markets were trading mostly in red, after Japan's services producer price inflation accelerated in July. The data from the Bank of Japan showed that the corporate services producer price index advanced 1.2 percent on a yearly basis in July, faster than the 0.9 percent increase seen in June. This was the highest rate in four months. On a monthly basis, the services PPI inflation rose to 0.4 percent from 0.3 percent in June. Excluding international transportation, services producer price inflation climbed to 1.3 percent from 1 percent a month ago. Month-on-month, the index gained 0.4 percent in July.

The BSE Sensex is currently trading at 38824.49, down by 19.39 points or 0.05% after trading in a range of 38765.09 and 38980.60. There were 15 stocks advancing against 14 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Auto up by 1.62%, Realty up by 1.40%, Consumer Discretionary up by 0.82%, Metal up by 0.79% and Bankex up by 0.76%, while Telecom down by 1.82%, TECK down by 0.29%, Capital Goods down by 0.26%, FMCG down by 0.18% and Healthcare down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.93%, Bajaj Auto up by 2.77%, Axis Bank up by 1.91%, Bajaj Finserv up by 1.83% and Mahindra & Mahindra up by 1.57%. On the flip side, Bharti Airtel down by 2.27%, Asian Paints down by 1.75%, Tech Mahindra down by 1.18%, Larsen & Toubro down by 1.07% and Ultratech Cement down by 1.04% were the top losers.

Meanwhile, the Finance Ministry said banks have sanctioned loans of about Rs 1,55,995 crore under the Rs 3-trillion Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector reeling under the slowdown caused by the coronavirus pandemic. However, disbursements against this stood at Rs 1,05,926 trillion till August 24. The scheme is the biggest fiscal component of the Rs 20-trillion Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May. The latest numbers on ECLGS, as released by the finance ministry, comprise disbursements by all 12 public sector banks (PSBs), 24 private sector banks and 31 non-banking financial companies (NBFCs).

The Nirmala Sitharaman said as of August 24, 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by PSBs and private banks stood at Rs 1,55,995.62 crore, of which Rs 1,05,926.99 crore has already been disbursed. The loan amounts sanctioned by PSBs increased to Rs 76,765 crore, of which Rs 58,230 crore has been disbursed as of August 24. At the same time, private sector banks have sanctioned Rs 79,230 crore of loans and disbursed Rs 47,696 crore. She said compared to 18 August 2020, there is an increase of Rs 5,236.17 crore in the cumulative amount of loans sanctioned & an increase of Rs 3,681.22 crore in the cumulative amount of loans disbursed by both PSBs and private sector banks combined as on 24 Aug, 2020.

Market leader SBI has sanctioned Rs 23,864 crore of loans and disbursed Rs 17,599 crore. It is followed by Punjab National Bank, which has sanctioned Rs 10,348 crore. However, its disbursements stood at Rs 7,621 crore as of August 24. On May 20, the Cabinet approved additional funding of up to Rs 3 trillion at a concessional rate of 9.25 per cent through ECLGS for MSME sector. Under the scheme, 100 per cent guarantee coverage will be provided by the National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 trillion to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility.

The CNX Nifty is currently trading at 11483.10, up by 10.85 points or 0.09% after trading in a range of 11461.85 and 11517.55. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 5.90%, Hero MotoCorp up by 4.80%, Zee Entertainment up by 4.23%, Indusind Bank up by 3.73% and Adani Ports & SEZ up by 3.13%. On the flip side, Bharti Airtel down by 2.35%, Asian Paints down by 1.78%, Grasim Industries down by 1.61%, Britannia down by 1.58% and HDFC Life Insurance down by 1.38% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 16.39 points or 0.07% to 23,280.38, Jakarta Composite lost 6.36 points or 0.12% to 5,332.53, Straits Times trembled 24.12 points or 0.94% to 2,534.91, KOSPI fell 4.70 points or 0.2% to 2,362.03, Shanghai Composite declined 36.55 points or 1.08% to 3,337.03 and Hang Seng decreased 53.75 points or 0.21% to 25,432.47. On the flip side, Taiwan Weighted strengthened 25.60 points or 0.2% to 12,783.85.