HOME > MARKETS > MARKET COMMENTARY
  MARKET COMMENTARY
EQUITY
Weak trade persists on Dalal Street
Aug-07-2020

Indian benchmarks continued their trade lower in afternoon session, tracking weak cues from other Asian markets. Traders were seen in selling position for IT, TECK and Consumer Durables stocks, while buying was witnessed in Power, Auto and Basic Materials stocks. Sentiments remained dented with private report that business optimism for the July-September quarter slumped to a record low due to sharp rise in COVID-19 cases, the extension of lockdown in containment zones and staggered easing of restrictions. However, losses were capped with Minister of State for Personnel Jitendra Singh statement that the India will be an important pillar of the post-coronavirus global economic recovery and that the road map for winning the battle against the pandemic lies in countries restarting the economy and strengthening cooperative federalism.

On the global front, Asian markets were trading lower with the risk aversion in the market and surge in safe haven gold investments amid pandemic stricken waning global economy and on intensified Sino-US tensions. Back on the street, in scrip specific developments, Vodafone Idea jumped despite reporting consolidated net loss of Rs 25460 crore in Q1 and PNC Infratech inched up on executing agreements with NHAI.

The BSE Sensex is currently trading at 37984.37, down by 41.08 points or 0.11% after trading in a range of 37787.38 and 38044.17. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.32%, while Small cap index was up by 0.90%.

The top gaining sectoral indices on the BSE were Power up by 1.08%, Auto up by 0.97%, Basic Materials up by 0.92%, FMCG up by 0.86% and Industrials was up by 0.85%, while IT down by 1.02%, TECK down by 0.86%, Consumer Durables down by 0.71% and Healthcare was down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.08%, Bajaj Finserv up by 1.99%, Bajaj Finance up by 1.82%, Maruti Suzuki up by 1.47% and Indusind Bank was up by 1.40%. On the flip side, HCL Tech down by 2.30%, Infosys down by 1.58%, Titan Company down by 1.28%, Sun Pharma down by 1.16% and HDFC was down by 0.76% were the top losers.

Meanwhile, Ratings agency ICRA has revised downwards sales forecast for two-wheelers in India, expecting it to fall by 16-18 percent to around 1.7 crore units in the current financial year (FY21). It has attributed the revision in sales forecast to overall macroeconomic scenario, the COVID-19 demand-supply disruptions, looming income uncertainties and increased cost of ownership of BS-VI vehicles. Earlier, it had said that two-wheeler (2W) sales could decline by 11-13 percent in this fiscal.

According to the report, the aggregate capacity utilisation levels for the industry sample is expected to decline to 55-60 per cent from around 70 per cent. However, it said despite moderation, the 2W OEMs will continue to have strong credit profiles characterised by healthy return on capital employed (ROCE) -- average ranging between 18-20 per cent -- and comfortable balance sheets with negligible debt and strong cash and liquid investments. While any major expansion plans are expected to be deferred till the demand recovers sufficiently, it is expected that original equipment manufacturers (OEMs) will continue investing in new product development and network expansion.

ICRA further said despite the overall muted macro-economic sentiments, on the positive side, the rural economy offers some growth off-shoots in the form of healthy rabi output and lower COVID-19 impact. It also said higher farm income has led to sequential pick-up in 2W demand in June and July 2020. After a timely onset, monsoon progress remains healthy across most regions. It noted that these factors coupled with government's various agri-focused initiatives, are expected to support farm cash flows and 2W demand. It added that in the urban markets, which have been more severely impacted by the pandemic, a preference towards personal mobility could push near-term 2W demand.

The CNX Nifty is currently trading at 11177.80, down by 22.35 points or 0.20% after trading in a range of 11142.05 and 11213.80. There were 26 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.34%, Bajaj Finserv up by 1.98%, UPL up by 1.90%, BPCL up by 1.82% and Bajaj Finance was up by 1.79%. On the flip side, HCL Tech down by 2.45%, Infosys down by 1.75%, Titan Company down by 1.53%, Sun Pharma down by 1.22% and Indian Oil Corporation was down by 0.97% were the top losers.

Asian markets were trading mostly in red; Straits Times trembled 18.09 points or 0.71% to 2,541.01, Taiwan Weighted dropped 84.63 points or 0.66% to 12,828.87, Jakarta Composite lost 47.23 points or 0.91% to 5,131.04, Shanghai Composite declined 20.60 points or 0.61% to 3,365.86, Hang Seng decreased 422.81 points or 1.7% to 24,507.77 and Nikkei 225 was down by 88.21 points or 0.39% to 22,329.94. On the other hand; KOSPI was up by 9.06 points or 0.39% to 2,351.67.
  RELATED NEWS >>
Most Viewed >>
April 22 , 2024
Nifty 500: Get diversification with better ret
April 22 , 2024
Invest lumpsum through systematic transfer pla
April 22 , 2024
Investment bankers to receive hefty bonuses as
April 22 , 2024
FPIs withdraw over Rs 5,200 crore in April so
EXPLORE
© CITRUS INTERACTIVE
Designed & Developed Accord Fintech Pvt. Ltd.