Markets erase gains to close marginally lower on Friday
Indian equity benchmarks traded in a range bound manner with a positive bias for most part of the day but witnessed sudden fall in final hour of trade which forced to close Friday’s session on negative note. Benchmarks made positive start, tracking gains in Asian peers. Sentiments remained positive with report that the Reserve Bank of India (RBI) will purchase government securities under open market operations (OMOs) for an aggregate amount of Rs 10,000 crore on September 24, 2020. Some support also came with data showing that investment in the Indian capital market through participatory notes (P-notes) climbed to over Rs 74,000 crore till August-end, making it the highest level in 10 months. This marks the fifth consecutive monthly rise in the investment through the route, also signaling at growing confidence of foreign portfolio investors (FPIs) in the local market.
Though, key indices failed to hold initial gains and entered into a negative territory in last hour of trade amid cooling off buying interest across sectors. Traders turned wary as domestic ratings agency -- ICRA warned that divesting majority stake in state-run lenders by the government will be ‘credit negative’ for such public sector banks (PSBs). Some concern also came with report that advance tax collections fell 25.5 per cent to Rs 1,59,057 crore in the second quarter of the fiscal. However, markets managed to trim some losses in final minutes of trade, taking support from report that the Employees' State Insurance Corporation (ESIC) subscribers who lost their job due to the COVID-19 situation can claim unemployment relief of 50 per cent of wages under the Atal Bimit Kalyan Yojana.
On the global front, Asian markets ended mostly in green on Friday, despite slump in Wall Street following Federal Reserve Chairman Jerome Powell’s dour economic outlook along with lackluster US economic data. Separately, data showed the key inflation gauge in Japan went negative again last month amid a steep drop in the cost of hotel accommodation. European markets were trading mostly in red amid worries about the second wave of coronavirus infections in the region. Leading scientists advising the U.K. government have proposed a two-week national lockdown in October to try to tackle the rising number of coronavirus cases. Back home, on the sectoral front, defence stocks were in limelight as the government permitted foreign direct investment (FDI) of up to 74 per cent under automatic route in the defence sector with a view to attracting overseas investors. There was some reaction in insurance sector’s stocks as regulator Irdai is mulling over a plan to allow the tenure extension of COVID-19 specific insurance products as the vaccine for the disease is seemingly away by some more time.
Finally, the BSE Sensex fell 134.03 points or 0.34% to 38,845.82, while the CNX Nifty was down by 11.15 points or 0.10% to 11,504.95.
The BSE Sensex touched high and low of 39,200.42 and 38,635.73, respectively and there were 16 stocks advancing against 14 stocks declining on the index.
The broader indices ended mixed; the BSE Mid cap index rose 0.26%, while Small cap index was down by 0.32%.
The top gaining sectoral indices on the BSE were Healthcare up by 3.50%, Telecom up by 2.69%, Realty up by 1.96%, Utilities up by 1.18% and Power up by 0.82%, while Finance down by 1.16%, Bankex down by 1.13%, Consumer Durables down by 0.69%, FMCG down by 0.50% and Capital Goods down by 0.43% were the top losing indices on BSE.
The top gainers on the Sensex were Bharti Airtel up by 3.73%, Mahindra & Mahindra up by 2.72%, NTPC up by 2.48%, Tech Mahindra up by 2.29% and Sun Pharma up by 2.23%. On the flip side, HDFC Bank down by 2.39%, Kotak Mahindra Bank down by 2.07%, Bajaj Finserv down by 1.92%, Maruti Suzuki down by 1.73% and Titan Company down by 1.67% were the top losers.
Meanwhile, investment in the Indian capital market through participatory notes (P-notes) climbed to over Rs 74,000 crore till August-end, making it the highest level in 10 months. This marks the fifth consecutive monthly rise in the investment through the route, also signaling at growing confidence of foreign portfolio investors (FPIs) in the local market.
According to Securities and Exchange Board of India (SEBI) data, the value of P-note investments in Indian markets--equity, debt, hybrid securities and derivatives--rose to Rs 74,027 crore till August-end from Rs 63,228 crore clocked by the end of July. The figure at August-end was the highest level of investment since October 2019, when the total value of P-note investments in the Indian markets stood at Rs 76,773 crore. The rise in FPI participation through P-notes shows their rise in confidence, since the 15-year lows of P-notes participation in March 2020.
P-notes are issued by registered foreign portfolio investors (FPIs) to overseas players who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through due diligence.
The CNX Nifty traded in a range of 11,584.10 and 11,446.10 and there were 28 stocks advancing against 22 stocks declining on the index.
The top gainers on Nifty were Dr. Reddys Lab up by 9.92%, Cipla up by 7.11%, Adani Ports & SEZ up by 3.76%, Bharti Airtel up by 3.73% and Mahindra & Mahindra up by 2.85%. On the flip side, HDFC Bank down by 2.28%, Shree Cement down by 2.00%, Bajaj Finserv down by 1.85%, Kotak Mahindra Bank down by 1.85% and Maruti Suzuki down by 1.82% were the top losers.
European markets were trading mostly in red; UK’s FTSE 100 decreased 8.46 points or 0.14% to 6,041.46 and France’s CAC fell 10.42 points or 0.21% to 5,029.08, while Germany’s DAX increased 28.78 points or 0.22% to 13,236.90.
Asian markets ended mostly higher on Friday, despite slump in Wall Street overnight following Federal Reserve Chairman Jerome Powell’s dour economic outlook along with lackluster US economic data. Data showed that the number of Americans applying for unemployment benefits fell last week to 860,000. Chinese shares ended higher on expectations of fresh supportive measures to boost the virus-ravaged economy, with the Chinese yuan holding on to recent gains against the dollar. Japanese shares ended slightly up amid yen’s weakness after data showing the key inflation gauge in the country went negative again last month. Further, optimism surrounding Japan’s new Prime Minister Yoshihide Suga’s policies also offered some support.
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