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Indian benchmarks erase losses; end flat with positive bias
Aug-07-2020

In a highly volatile session, Indian equity benchmarks reversed all of their initial losses to end flat with a positive bias on Friday, with frontline gauges managing to stay above their crucial 38,000 (Sensex) and 11,200 (Nifty) levels. Domestic share markets opened in negative territory and traded choppy for most part of the day, as muted cues from global markets and spiking COVID-19 cases in the country kept investors on the edge. The sentiments remained in lackluster mood with a private report stated 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. Some cautiousness also came as the Reserve Bank of India sounded a note of caution saying that protracted spread of the COVID-19 pandemic poses downside risk to the domestic economy which is expected to remain in the negative zone in the current fiscal (FY21).

However, markets managed to pared all of their losses in late hour of trade, as some optimism remained among traders in with Union Minister Jitendra Singh’s statement that 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. Traders also took some support with a private report that the Centre is looking to expand the scope of its Production-Linked Incentive (PLI) scheme to a few more sectors. The Finance Ministry, NITI Aayog and line ministries are reportedly discussing the PLI scheme for sectors such as chemicals, fertilisers, solar equipment including solar cells, power equipment sector, electirc vehicle (EV) components (batteries, auto parts).

On the global front, Asian markets ended mostly lower on Friday, after the Trump administration unveiled ban on U.S. transactions with ByteDance's TikTok and Tencent-owned WeChat, signaling increasing tensions in U.S.-China relations. Investors also looked forward to the U.S. jobs data due later in the day, with analysts forecasting that employment growth likely slowed in July from the previous month due to a resurgence in Covid-19 infections. European markets were trading mostly in red, as a resurgence of coronavirus cases across Europe and the impasses in the U.S. stimulus negotiations also weighed on sentiment. However, data from Destatis showed German exports and imports grew at faster rates in June. Exports advanced 14.9 percent sequentially, following May's 8.9 percent increase. Shipments were forecast to grow 13.3 percent in June. At the same time, imports growth advanced to 7 percent from 3.6 percent in May. This was slower than economists' forecast of 10.9 percent rise.

Back home, on the sectoral front, select logistics sector stocks fell as ICRA revised the outlook on the logistics sector from stable to negative given the prevailing circumstances and its near impact on the industry metrics. Stocks related to education sector also were in action as India Ratings and Research (Ind-Ra) said the new National Education Policy 2020 (NEP) will enable creative learning among students and boost their employment prospects.

Finally, the BSE Sensex gained 15.12 points or 0.04% to 38,040.57, while the CNX Nifty was up by 13.90 points or 0.12% to 11,214.05.

The BSE Sensex touched high and low of 38,109.68 and 37,787.38, respectively and there were 17 stocks advancing against 13 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.44%, while Small cap index was up by 0.78%.

The gaining sectoral indices on the BSE were Power up by 1.21%, Telecom up by 0.99%, Utilities up by 0.90%, Industrials up by 0.84% and Basic Materials up by 0.79%, while Consumer Durables down by 1.73%, IT down by 1.15%, TECK down by 0.86%, Healthcare down by 0.32% and Realty down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 4.44%, Bajaj Finance up by 3.61%, Indusind Bank up by 2.90%, Bajaj Finserv up by 2.80% and Maruti Suzuki up by 1.84%. On the flip side, Titan Company down by 2.65%, HCL Technologies down by 2.22%, Infosys down by 1.90%, Mahindra & Mahindra down by 1.47% and Sun Pharma down by 1.20% were the top losers.

Meanwhile, Minister of State for Personnel Jitendra Singh has said 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. He stated that India has set the tone for global collaboration to deal with the pandemic under the leadership of Prime Minister Narendra Modi.

Further, he mentioned that extraordinary foreign outreach of the prime minister the last six years has greatly helped in forging such an international coalition against the pandemic. He said that team work, compassion and statesmanship have defined India's governance in response to the Covid-19 pandemic and it withstood the governance challenge with a robust digital framework.

Besides, he said that it was Prime Minister Modi who gave a wake-up call to the world to fight this challenge by implementing an early nationwide lockdown despite a few cases of infection in India. He added that the foresight and vision of the prime minister helped India to fight the pandemic in an effective manner and the same was emulated by many other countries.

The CNX Nifty traded in a range of 11,231.90 and 11,142.05 and there were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 4.56%, Bajaj Finance up by 3.56%, UPL up by 3.54%, Indusind Bank up by 2.85% and Bajaj Finserv was up by 2.72%. On the flip side, Titan Company down by 2.60%, HCL Tech down by 2.07%, Infosys down by 2.05%, Mahindra & Mahindra down by 1.51% and Sun Pharma was down by 1.18% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 5.36 points or 0.09% to 6,021.58 and France’s CAC fell 17.30 points or 0.35% to 4,867.83, while Germany’s DAX increased 5.31 points or 0.04% to 12,596.99.

Asian markets ended mostly lower on Friday due to further escalation in Sino-US tensions after the Trump administration unveiled sweeping bans on US transactions with ByteDance's TikTok and Tencent-owned WeChat. Investors also looked forward to the jobs data from United States due later in the day, with forecasting that employment growth likely slowed in July from the previous month due to resurgence in corona virus infections. Chinese shares declined despite China's upbeat exports data in July. Driven by demand for medical supplies, electronics and automobiles, exports grew 7.2 percent on a yearly basis in July, confounding expectations for a drop of 0.2 percent, while dollar-denominated imports fell 1.4% in that same period. Japanese shares ended lower on raft of lacklustre domestic earnings along with caution ahead of key US jobs data. Though, Seoul shares ended up on hopes the United States is making progress on a new economic stimulus package.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,354.04
-32.42
-0.96

Hang Seng

24,531.62
-398.96
-1.60

Jakarta Composite

5,143.89
-34.38
-0.66

KLSE Composite

1,578.14

-10.43

-0.66

Nikkei 225

22,329.94
-88.21
-0.39

Straits Times

2,549.09
-10.01
-0.39

KOSPI Composite

2,351.67
9.06
0.39

Taiwan Weighted

12,828.87
-84.63
-0.66
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