Post Session: Quick Review

Indian equity benchmarks failed to hold gains on Monday and finally ended the trading session in red terrain. Key indices made an optimistic start of the trading day, as Chief Economic Adviser K V Subramanian exuded confidence that retail inflation will come down in the days ahead with the easing of lockdowns, attributing the rise in inflation to supply-side frictions. Some support also come after the RBI data showed that the country's foreign exchange reserves rose by $582 million to reach a lifetime high of $542.013 billion in the week ended September 4.

Firm trade continued over the Dalal Street for the most part of the session, as domestic sentiments remained positive, after the Union Ministry of Finance informed that an amount of Rs 30,000 crore Special Liquidity Scheme has been progressed for non-banking, housing finance companies and Monetary Financial Institutions (MFI) as part of the Atmanirbhar Bharat package. According to the Finance Ministry, 37 proposals involving Rs 10,590 crore have been approved as on September 11. While six applications seeking financing of Rs 783.5 crore are under process.

However, in the last hours of the trade, markets cut all of their gains to end on a lower note, as India’s inflation based on wholesale price index (WPI) surged 0.16% in the month of August, 2020 (over August, 2019) as compared to 1.17% during the corresponding month of the previous year. Adding more worries, Moody’s Investors Service in its latest report has projected that India’s Gross Domestic Product (GDP) growth rate to contract 11.5% for the financial year 2020-21 (FY21), from (-) 4% estimated earlier. Besides, India’s economic growth fell 23.9% during the first quarter of 2020-21, primarily because of a lockdown imposed to limit the spread of the coronavirus.

On the global front, European markets were trading higher, buoyed by the resumption of coronavirus vaccine trials. Asian markets ended mostly higher on Monday, after China's bank lending increased in August as the economy started to recover from the coronavirus driven downturn. The data from the People's Bank of China revealed that banks offered CNY 1.28 trillion loans in August. This was bigger than the expected level of CNY 1.22 trillion and CNY 992.7 billion loans provided in July. Total social financing, a broad measure of credit and liquidity in the economy, surged to CNY 3.58 trillion from CNY 1.69 trillion in July.

The BSE Sensex ended at 38756.63, down by 97.92 points or 0.25% after trading in a range of 38573.17 and 39230.16. 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 1.56%, while Small cap index was up by 4.03%.(Provisional)

The top gaining sectoral indices on the BSE were IT up by 4.76%, Realty up by 3.85%, TECK up by 3.57%, Consumer Durables up by 3.40% and Industrials up by 2.16%, while Telecom down by 2.09%, Bankex down by 1.56%, Energy down by 0.67%, PSU down by 0.49% and FMCG down by 0.48% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were HCL Tech. up by 10.08%, TCS up by 4.69%, Tech Mahindra up by 3.09%, Infosys up by 3.06% and Titan Co up by 1.62%. On the flip side, Bharti Airtel down by 3.79%, Bajaj Finance down by 2.99%, Power Grid down by 2.20%, Sun Pharma down by 2.12% and SBI down by 2.10% were the top losers. (Provisional)

Meanwhile, India’s inflation based on wholesale price index (WPI) surged 0.16% in the month of August, 2020 (over August, 2019) as compared to 1.17% during the corresponding month of the previous year.

Component wise, primary articles index having weight of 22.62%, increased by (1.81%) to 146.3 (provisional) in August, 2020 from 143.7 (provisional) for the month of July, 2020. Prices of Minerals, Crude Petroleum & Natural Gas, Non-food Articles and Food Articles increased as compared to July, 2020.

Fuel & Power index, having weight of 13.15%, increased by (0.77%) to 91.4 (provisional) in August, 2020 from 90.7 (provisional) for the month of July, 2020. Prices of Mineral Oils increased as compared to July, 2020, while prices of coal and electricity remain unchanged.

Manufactured Products constituting the major portion of the index with weight of 64.23%, increased by (0.59%) to 119.3 (provisional) in August, 2020 from 118.6 (provisional) for the month of July, 2020. Meanwhile, for the month of June 2020, the final Wholesale Price Index and inflation rate for 'All Commodities' (Base: 2011-12=100) stood at 119.3 and WPI based rate of inflation stood at -1.81%.

The CNX Nifty ended at 11440.05, down by 24.40 points or 0.21% after trading in a range of 11383.55 and 11568.90. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech. up by 10.16%, TCS up by 4.94%, Wipro up by 4.74%, Infosys up by 3.46% and UPL up by 3.39%. On the flip side, Bharti Airtel down by 3.57%, Bajaj Finance down by 2.93%, BPCL down by 2.71%, Power Grid down by 2.08% and SBI down by 2.07% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 10.87 points or 0.18% to 6,042.96, France’s CAC increased 24.58 points or 0.49% to 5,058.72 and Germany’s DAX increased 38.67 points or 0.29% to 13,241.51.

Asian markets ended mostly higher on Monday amid renewed optimism surrounding corona virus vaccines after Biopharmaceutical giant AstraZeneca and the University of Oxford on Saturday resumed its phase-3 vaccine trials in the UK after the Medicines Health Regulatory Authority’s approval. The trial was suspended last week over safety concerns. Meanwhile, investors are looking ahead to the US Federal Reserve’s monetary policy decision scheduled for Wednesday for monetary policy outlook cues in the world’s largest economy. Japanese shares closed higher after reports that Japan's Chief Cabinet Secretary Yoshihide Suga was elected new president of the Liberal Democratic Party, succeeding outgoing Prime Minister Shinzo Abe. As Suga, a long-time loyal aide to Abe, has vowed to continue his policies, few market players expect radical changes. Further, Chinese shares finished higher with Shanghai’s STAR Market leading gains after securities regulator approved the first batch of ETFs, which are expected to draw fresh funds towards the market.