Post Session: Quick Review

Indian equity benchmarks failed to hold gains on Tuesday and finally ended the trading session in red terrain. After a cautious start of the day, key indices soon gained traction, amid report that the Reserve Bank of India (RBI) announced a special round of simultaneous sale and purchase of government securities (G-Secs) for Rs 10,000 crore each, on September 10, 2020. It has released details of the sale and purchase of securities, which will be done using the multiple price auction method.

Markets remained in green terrain for the most part of the trading session, taking support with industry chamber Assocham’s statement that the rate of decline in output of core segments of the economy has been arrested considerably in July 2020. In line with an evaluation by Assocham, cement, steel and coal, which suffered heavy declines in the first quarter, recovered significantly in July 2020, even though the annualised numbers reflect contraction.

However, in the last hour of trade, Indian equity benchmarks cut all of their gains to close the trading session on a lower note, as traders got worried after domestic rating agency India Ratings and Research revised the country's FY21 GDP growth forecast to (-) 11.8 per cent from (-) 5.3 per cent earlier. The agency, however, expects India’s gross domestic product (GDP) to rebound and grow at 9.9 per cent year-on-year in FY22 mainly due to the weak base of FY21.

On the global front, European markets were trading lower, as traders waited for Wall Street’s return after a three-day break. Asian markets ended mostly higher on Tuesday, after Taiwan's trade surplus increased in August as both exports and imports rose strongly. The figures from the Ministry of Finance showed that the trade surplus increased to $6.466 billion in August from $6.012 billion last year. In July, the trade surplus was $5.369 billion. Exports rose 8.3 percent year-on-year in August, following a 0.4 percent rise in July.

The BSE Sensex ended at 38365.35, down by 51.88 points or 0.14% after trading in a range of 38275.45 and 38746.48. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.49%, while Small cap index was down by 0.93%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.35%, Energy up by 0.86%, TECK up by 0.31% and Oil & Gas up by 0.17%, while Telecom down by 4.01%, Metal down by 2.96%, Basic Materials down by 1.91%, Realty down by 1.73% and Industrials down by 1.66% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HCL Tech. up by 1.69%, Infosys up by 1.67%, Reliance Industries up by 1.18%, Tech Mahindra up by 0.72% and TCS up by 0.56%. On the flip side, Tata Steel down by 4.13%, Bharti Airtel down by 3.36%, Axis Bank down by 3.13%, ONGC down by 2.55% and Sun Pharma down by 2.20% were the top losers. (Provisional)

Meanwhile, domestic rating agency, India Ratings and Research (Ind-Ra) in its latest report has revised its FY21 gross domestic product (GDP) growth forecast further downward to negative 11.8% from negative 5.3% earlier. However, the rating agency said that GDP is expected to rebound and grow at 9.9% year-on-year in FY22 mainly due to the weak base of FY21.

India Ratings and Research further noted that the negative 23.9% growth in the first quarter of FY21 is the first contraction in quarterly GDP data series which has been made available in the public domain since the first quarter of FY98.

Besides, the rating agency estimates the economic loss in FY21 to be Rs 18.44 lakh crore. Ind-Ra expects the retail and wholesale inflation to come in at 5.1% and negative 1.7%, respectively, in FY21.

The CNX Nifty ended at 11317.35, down by 37.70 points or 0.33% after trading in a range of 11290.45 and 11437.25. There were 13 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were BPCL up by 2.97%, HCL Tech. up by 2.41%, Infosys up by 1.54%, Wipro up by 1.36% and Reliance Industries up by 1.17%. On the flip side, Bharti Infratel down by 7.79%, Tata Motors down by 4.75%, Zee Entertainment down by 4.55%, Tata Steel down by 4.12% and Hindalco down by 3.87% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 26.52 points or 0.45% to 5,910.88, France’s CAC decreased 59.45 points or 1.18% to 4,994.27, Germany’s DAX decreased 81.96 points or 0.63% to 13,018.32.

Asian markets ended mostly higher on Tuesday as investors shrugged off latest worries about tensions between Washington and Beijing. Investors are focusing on uncertainties over the corona virus pandemic and hopes for a vaccine. Japanese shares ended higher followed by rallies in major European markets overnight with US markets closed for the Labor Day holiday, despite data showing that Japan's economy contracted more than initially estimated in the second quarter. Chinese shares gained after four days of losses as investors brushed aside Trump's anti-China rhetoric.