Post Session: Quick Review

Indian equity benchmarks ended Monday’s trading session in red terrain. After a cautious start, indices traded flat, taking support with CII’s business outlook survey’s showing that India Inc’s business sentiment has improved during July-September quarter as the government gradually unlocked the economy and business activity resumed. Some support also came with Commerce and Industry Minister Piyush Goyal’s statement that several multinational firms in sectors such as electronics, retail, e-commerce, and automotive, among others, have shown interest in shifting their base to India. He also said the government is working hard to institutionalize more investor friendly reforms to support and facilitate investments into India.

During the first half of the trading session, downside remained capped, as Lok Sabha passed a bill to amend the Factoring Regulation Act that seeks to help micro, small and medium enterprises by providing additional avenues for getting credit facility. The Factoring Regulation (Amendment) Bill, which was introduced on September 14, was passed by voice vote after a brief discussion. Some support also came with report that the COVID-19 pandemic has provided a unique opportunity to both India and Japan to further strengthen economic ties by enhancing cooperation in areas like software development, modern technology, infrastructure and manufacturing.

However, in the second half of the session, indices fell sharply to end near their intraday low points, after Reserve Bank of India’s data has showed that country's foreign exchange reserves declined by $353 million to $541.660 billion in the week ended September 11. During the reporting week, the fall in reserves was due to a decline in foreign currency assets (FCAs), a major component of the overall reserves. Adding more worries, a report released by the Finance Ministry stated that India's total external debt increased by 2.8 percent to $558.5 billion at the end of March mainly on account of a rise in commercial borrowings. The external debt stood at $543 billion at end-March 2019.

On the global front, European markets were trading lower as allegations surrounding bank dealings and rising coronavirus infections weigh on market sentiment around the world. Asian markets ended down on Monday, after China retained its benchmark rates for the fifth straight month as the economy continued to log robust recovery from the downturn caused by the coronavirus pandemic. The one-year loan prime rate was retained at 3.85 percent and the five-year loan prime rate was maintained at 4.65 percent. The one-year and five-year loan prime rates were last reduced in April. The one-year loan prime rate was lowered by 20 basis points and five-year rate by 10 basis points in April.

The BSE Sensex ended at 38034.14, down by 811.68 points or 2.09% after trading in a range of 37938.53 and 38990.76. There were 3 stocks advancing against 27 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 3.43%, while Small cap index was down by 3.61%. (Provisional)

The top losing sectoral indices on the BSE were Telecom down by 5.77%, Realty down by 5.70%, Metal down by 4.75%, Auto down by 4.03% and Healthcare down by 3.87%, while there were no gaining sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Kotak Mahindra Bank up by 0.86%, TCS up by 0.57% and Infosys up by 0.36%. On the flip side, Indusind Bank down by 8.67%, Bharti Airtel down by 5.81%, Tata Steel down by 5.58%, ICICI Bank down by 5.15% and Mahindra & Mahindra down by 4.90% were the top losers. (Provisional)

Meanwhile, the Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional Estimate of Net Payroll’ data report has showed that India created 845232 new jobs in the month of July 2020 as against revised figure of 482352 in June 2020.

As per the report, the maximum jobs were created in the age bracket of 22-25 and in this bracket the top sectors which have created more fresh jobs include Expert Services; Trading - Commercial Establishments; establishment engaged in manufacture, marketing servicing, usage of computers; Electric-Mechanical-or General Engineering Products; Engineers- Engineering Contractors; Building & Construction Industry; Financing Establishment and Hospitals. In the similar age bracket, Maharashtra was the first among the States to create maximum payroll, followed by Karnataka, Gujarat, Tamil Nadu, Delhi and Haryana.

According to the data report, 6493 new jobs were created in less than 18 age group category, while 207667 jobs in 18-21 age group category. Further, 22-25 age, 26-28 age, 29-35 age and more than 35 age group category witnessed 216629, 107750, 157802 and 148891 new payrolls, respectively in July 2020.

The CNX Nifty ended at 11250.55, down by 254.40 points or 2.21% after trading in a range of 11218.50 and 11535.25. There were 3 stocks advancing against 47 stocks declining on the index. (Provisional)

The top gainers on Nifty were Kotak Mahindra Bank up by 0.84%, Infosys up by 0.77% and TCS up by 0.63%. On the flip side, Indusind Bank down by 8.58%, Tata Motors down by 7.07%, Hindalco down by 6.88%, JSW Steel down by 5.70% and Tata Steel down by 5.59% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 decreased 189.91 points or 3.16% to 5,817.14, France’s CAC decreased 132.10 points or 2.65% to 4,846.08 and Germany’s DAX was down by 392.32 points or 2.99% to 12,723.93.

Asian markets ended down on Monday on concerns about the global economic recovery due to a resurgence of corona virus infections in Europe, with a lack of US stimulus also weighing on sentiment. Chinese shares ended lower after Chinese central bank (PBOC) left its benchmark lending rate for corporate and household loans unchanged for the fifth straight month. HSBC and Standard Chartered's Hong Kong shares settled down after Private reports that they and other banks moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money. Meanwhile, Japanese market was closed for a holiday.