Post Session: Quick Review

Friday turned out to be a volatile session for Indian equity benchmarks, with both Sensex and Nifty ending flat with a positive bias. Key indices made a cautious start of the trading day, as domestic sentiments got hurt with ratings agency Crisil’s report that the Indian economy will contract by 9 per cent in 2020-21 as the coronavirus infections are yet to peak and the government is not providing adequate direct fiscal support. Adding more pessimism among market participants, rating agency Care ratings said that reflecting the overall stress in the economy, the employment growth rate declined to 3.5 per cent in FY20 from 3.8 per cent in the previous fiscal year.

Markets remained sluggish for the whole day, as the International Monetary Fund (IMF) has said the impact of COVID-19 pandemic is significant on India's development and the immediate priority is a coordinated policy response. Some concerns came with rating agency ICRA’s report that asset reconstruction companies (ARCs) are facing slowdown in recoveries from bad loans procured from banks due to failed auctions, absence of bidders and delay in payments amid COVID-19 pandemic. But, indices managed to end in green, as India and China have agreed on a five-point plan for resolving the prolonged border face-off in eastern Ladakh that included abiding by all existing agreements and protocol on management of the frontier, maintaining peace and tranquility and avoiding any action that could escalate matters.

On the global front, European markets were trading mostly in red as doubts about extra monetary stimulus and overnight falls in U.S. big tech shares kept investors on edge. Asian markets ended mostly higher on Friday, after Malaysia's industrial production returned to growth in July for the first time since February as restrictions to curb the spread of coronavirus were relaxed. The data from the Department of Statistics showed that industrial production grew 1.2 percent on a yearly basis in July, following a 0.4 percent drop in June. The annual growth was driven by a 2.9 percent rise in manufacturing output. Meanwhile, mining and electricity output declined 3 percent and 5.1 percent, respectively.

The BSE Sensex ended at 38854.55, up by 14.23 points or 0.04% after trading in a range of 38711.80 and 38978.52. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.58%, while Small cap index was up by 0.52%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.31%, IT up by 1.15%, Consumer Durables up by 0.87%, TECK up by 0.76% and Metal up by 0.71%, while Telecom down by 0.97% and Utilities down by 0.07% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 2.30%, TCS up by 1.81%, Tech Mahindra up by 1.76%, Hindustan Unilever up by 1.16% and Bajaj Finance up by 1.03%. On the flip side, Indusind Bank down by 1.71%, Power Grid Corpn. down by 1.52%, Asian Paints down by 1.34%, Bharti Airtel down by 1.19% and HDFC Bank down by 1.11% were the top losers. (Provisional)

Meanwhile, with an aim to deregulate and make it easier to start a business, Union Minister of Commerce and Industry Piyush Goyal has said that the government is working with states and local bodies. He also said that India's own ease of doing business ranking has improved significantly in the five years.

Talking about India’s mammoth potential, the Minister said that the real unique selling point of India should be around high quality, good service and good pricing. Further he explained the concept of AatmaNirbharBharat, saying that it is not about closing India's doors to international trade and engagement. In fact, it is about opening it wider looking for greater engagement in global trade. Now India has to engage with global economies from a position of strength with highly cost-competitive products of high quality.

On India being a huge and much-sought after market, the Minister said it's a market that businesses around the world want to engage with. The businesses will not only get a large Indian market but can also leverage this market to get economies of scale.

The CNX Nifty ended at 11464.45, up by 15.20 points or 0.13% after trading in a range of 11419.90 and 11493.50. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Wipro up by 3.08%, SBI up by 2.30%, Tech Mahindra up by 2.02%, TCS up by 1.84% and UPL up by 1.63%. On the flip side, Zee Entertainment down by 2.26%, Indusind Bank down by 1.63%, Power Grid Corpn. down by 1.38%, Coal India down by 1.22% and Bharti Airtel down by 1.15% were the top losers. (Provisional)

European markets were trading mostly in red, France’s CAC decreased 2.10 points or 0.04% to 5,021.83, Germany’s DAX decreased 24.77 points or 0.19% to 13,184.12. On the other hand, UK’s FTSE 100 increased 15.45 points or 0.26% to 6,018.77.

Asian markets ended mostly higher on Friday, despite weak cues overnight from Wall Street as tech stocks resumed their decline on growing doubts about US stimulus and worries about their stretched valuations. Japanese shares ended up as the capital city Tokyo dropped its corona virus alert by one notch from the highest level as Covid-19 infections continue to decline. Hong Kong shares closed higher, though the benchmark index ended lower for the week as economic worries and tensions between Washington and Beijing continued to weigh on sentiment.