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Indian markets maintain upward momentum
Aug-10-2020

Indian equity markets maintained their upward momentum in the afternoon session, following gains in healthcare, capital goods and industrials stocks. Healthy buying was observed in blue-chip stocks like Mahindra & Mahindra, Larsen & Toubro and Sun Pharma. Traders mood remained optimistic as overseas investors remained net buyers in Indian markets by investing a net Rs 8,327 crore in the first week of August amid better than expected results by big Indian companies. Foreign portfolio investors (FPI) invested a net Rs 7,842 crore in equities and Rs 485 crore in the debt segment between August 3-6. Investors also got encouragement with NITI Aayog CEO Amitabh Kant’s statement that India's foreign direct investment (FDI) regime is the most liberal in the world, and even during the Covid-19 pandemic, the country has attracted over $22 billion worth of direct investments.

On the global front, Asian markets were trading mostly in green after data showed China's factory deflation eased in July amid signs of a recovery in industrial activity. Back home, in scrip specific developments, shares of Prestige Estates surged amid report that Blackstone may acquire group assets and Divi’s Laboratories jumped on reporting 80% rise in Q1 consolidated net profit.

The BSE Sensex is currently trading at 38347.94, up by 307.37 points or 0.81% after trading in a range of 38163.71 and 38430.69. There were 23 stocks advancing against 6 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.57%, while Small cap index was up by 1.54%.

The top gaining sectoral indices on the BSE were Healthcare up by 5.00%, Capital Goods up by 3.87%, Industrials up by 2.47%, Realty up by 2.20% and Auto was up by 1.48%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.82%, Larsen & Toubro up by 5.44%, Sun Pharma up by 3.72%, Kotak Mahindra Bank up by 2.57% and NTPC was up by 2.39%. On the flip side, Asian Paints down by 1.18%, Bajaj Finserv down by 0.59%, Maruti Suzuki down by 0.32%, Reliance Industries down by 0.15% and Bajaj Finance was down by 0.05% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that Reserve Bank of India’s (RBI) decision to enable lenders to permit a one-time restructuring of loans is likely to ease liquidity pressure for companies amid the COVID-19 pandemic. It noted that several corporates are likely to explore the opportunity to restructure their loans in order to conserve liquidity, especially given the continued weakness in demand amid economic recession. In a major relief to corporate and retail borrowers, the RBI has permitted banks to go for one-time restructuring of loans that are facing stress due to the COVID-19 crisis with a view to mitigating risks to financial stability.

According to the report, the restructuring window will be open only for companies that are under stress due to the pandemic and that were classified as standard, but were not in default for more than 30 days with any lending institution as on March 1, 2020. It said it will factor in the impact of debt restructuring on its rated credits as and when the process is initiated, and its rating action will depend upon the timeliness and terms of the restructuring of debt. The agency will also continue to factor in any structural deterioration in the credit risk profiles of its rated companies amid prolonged business-side pressures, or such other reasons, in the normal course of rating reviews.

Crisil further said its analysis will take into consideration the rated entity's resilience and its expectations on the pace and extent of normalisation of its cash flows. In addition, it said the revised debt repayment terms after restructuring will also play a crucial role. Given that the moratorium announced by the RBI is ending on August 31, and the cash flows across a vast majority of rated entities are taking time to normalise, it noted that timely support from the lenders in terms of approving restructuring plans quickly will be critical to avoid sharp credit cliffs. 

The CNX Nifty is currently trading at 11316.45, up by 102.40 points or 0.91% after trading in a range of 11261.10 and 11337.30. There were 36 stocks advancing against 13 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Cipla up by 10.22%, Mahindra & Mahindra up by 5.91%, Larsen & Toubro up by 5.65%, Sun Pharma up by 3.87% and Tata Motors was up by 3.86%. On the flip side, Asian Paints down by 1.18%, Grasim Industries down by 0.87%, Hero MotoCorp down by 0.65%, Hindalco down by 0.62% and Bajaj Finserv was down by 0.62% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 65.13 points or 0.51% to 12,894.00, Jakarta Composite soared 7.38 points or 0.14% to 5,151.27, Shanghai Composite gained 39.19 points or 1.17% to 3,393.23 and KOSPI was up by 34.71 points or 1.48% to 2,386.38. On the flip side; Hang Seng was down by 80.93 points or 0.33% to 24,450.69.
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