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Benchmarks witness bloodbath in early deals; down over 1%
Sep-24-2020

Indian equity benchmarks made gap-down opening on Thursday following sell-off in the global peers coupled with caution ahead of the expiry of September series derivative contracts. Markets are trading deeply in red in early deals with cut of over a percent each, on the back of selling in all the sector indices led by Capital Goods, Industrials and Realty. Rising coronavirus cases also dampened sentiments in the markets. India recorded 89,688 coronavirus cases, taking its total caseload to 5,730,184. India has added over 1,000 deaths every day for 24 days. Adding pessimism, the Department for Promotion of Industry and Internal Trade (DPIIT) data showed that foreign direct investment (FDI) equity inflows into India contracted by 60 per cent to $6.56 billion (Rs 49,820 crore) during April-June 2020. Though, domestic indices pared some opening losses taking some support with Commerce and Industry Minister Piyush Goyal’s statement that the government has set up a National Traders' Welfare Board with the objectives of welfare of traders and their employees, simplification of the Acts and rules applicable to traders, reduction of compliance burden and improvement in access to funds.

On the global front, all the Asian markets were trading notably lower amid worries about the global economic recovery due to urging coronavirus cases in certain parts of the world and uncertainty about new US fiscal stimulus. Federal Reserve Chair Jerome Powell noted that despite progress in rebounding from the coronavirus economic downturn, ‘there is a long way to go’. Meanwhile, members of the Bank of Japan's monetary policy board said that the economy had suffered a severe downturn due to Covid-19, although it was starting to see signs of recovery, minutes from the bank's meeting on July 14-15 revealed on Thursday.

Back home, agriculture stocks were in focus as the Commission for Agricultural Costs and Prices (CACP) recommended a fertiliser cash subsidy of Rs 5,000 per year to farmers. In scrip specific developments, Tech Mahindra fell after selling its stake in Altiostar to Rakuten. On the other hand, Aurionpro Solutions gained on winning an order from Rail Vikas Nigam for the Supply, Installation and maintenance of the smart mobility system for the phase I, covering two metro stations, of the Kolkata Metro.

The BSE Sensex is currently trading at 37213.16, down by 455.26 points or 1.21% after trading in a range of 37058.79 and 37304.26. There were 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 1.42%, while Small cap index was down by 1.22%.

The top losing sectoral indices on the BSE were Capital Goods down by 1.98%, Industrials down by 1.84%, Realty down by 1.81%, Auto down by 1.77%, IT down by 1.63%, while there was no gainer on BSE sectoral front.

The sole gainer on the Sensex was Power Grid up by 0.27%. On the flip side, Indusind Bank down by 2.81%, Bajaj Finance down by 2.68%, Mahindra & Mahindra down by 2.67%, Axis Bank down by 2.10% and ICICI Bank down by 1.98% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that the government is in the process of finalizing a National Logistics Policy which will help bring down logistics cost significantly. He noted that stakeholder consultations are being held for the same. He also said that the government has set up a National Traders' Welfare Board with the objectives of welfare of traders and their employees, simplification of the Acts and rules applicable to traders, reduction of compliance burden and improvement in access to funds.

The minister stated that 24 sub-sectors (such as agro-food processing, steel, agro chemicals, electronics products, furniture, leather, auto parts and textiles) in manufacturing have been identified in consultation with industry based on export potential, import substitution and employment generation capacity, where attention would be given to make India a self-reliant country and a global supplier. He also informed that Make in India is now focusing on 27 sectors under Make in India 2.0.

Goyal further said Department for Promotion of Industry and Internal Trade (DPIIT) is coordinating action plans for 15 manufacturing sectors, such as aerospace and defence, food processing, capital goods, leather, pharmaceutical and medical devices, etc, while the Department of Commerce is coordinating for 12 service sectors.

The CNX Nifty is currently trading at 10996.35, down by 135.50 points or 1.22% after trading in a range of 10951.80 and 11015.30. There were 3 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.31%, Dr. Reddy’s Lab up by 1.14% and Power Grid up by 0.31%. On the flip side, Hindalco down by 3.54%, Zee Entertainment down by 3.36%, UPL down by 3.01%, Indusind Bank down by 2.89% and Bajaj Finance down by 2.71% were the top losers.

All the Asian markets were trading in red; Nikkei 225 slipped 189.84 points or 0.81% to 23,156.65, Straits Times declined 27.98 points or 1.13% to 2,453.16, Hang Seng plunged 422.97 points or 1.78% to 23,319.54, Taiwan Weighted lost 302.85 points or 2.41% to 12,281.03, KOSPI fell 48.05 points or 2.06% to 2,285.19, Jakarta Composite dropped 81.05 points or 1.65% to 4,836.91 and Shanghai Composite was down by 47.93 points or 1.46% to 3,231.78.

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