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Key gauges end marginally lower on Friday
Sep-17-2021

In a volatile session, Indian equity benchmarks erased all of their day’s gains after lifetime highs and ended marginally lower on Friday amid profit booking. Markets made a strong opening, as sentiment got a boost with Union Finance Minister Nirmala Sitharaman’s statement that the National Asset Reconstruction Company (NARCL) would be operational soon, and it had to ensure resolving bad loans within five years, beyond which the guarantee to be issued by the government would expire. The Cabinet approved a government guarantee of Rs 30,600 crore to be provided for the security receipts issued by the NARCL to buy bad loans of lenders. Further, support also came in as the Reserve Bank of India (RBI) said prospects are brightening for the Indian economy achieving ‘escape velocity’ from the pandemic as the second wave of COVID-19 wanes and preparedness for future remains on war-alert status. It said aggregate demand is gaining firmer ground, while on the supply side, IIP and core industries mirror improvement in industrial activity and services sector indicators point towards sustained recovery.

However, the market witnessed a late bout of profit-taking towards the closing stages. Traders overlooked India Ratings’ report stated that with the resumption of economic activity, the collection efficiency for securitisation transactions moved up from 67 per cent in May 2021 to 79 per cent in July. However, it is yet to reach March 2021 levels of 83 per cent. Meanwhile, in order to rave up the innovation and entrepreneurship ecosystem across the country, Atal Innovation Mission (AIM) NITI Aayog has inked partnership with Dassault Systemes. In this regard a Statement of Intent (SoI) was signed between AIM and Dassault Systemes in a virtual event to support various current and future initiatives of AIM programs and AIM beneficiaries in India.

On the global front, Asian markets ended mostly higher on Friday despite concerns about slowing global growth and bets on an early tapering by the U.S. Federal Reserve. European markets were trading lower as the Office for National Statistics reported that U.K. retail sales declined for the fourth straight month in August. Retail sales including auto fuel dropped unexpectedly by 0.9 percent month-on-month after declining 2.8 percent in July. Sales were forecast to climb 0.5 percent. Back home, on the sectoral front, there were some buzz in aviation stocks on report that the Directorate General of Civil Aviation (DGCA) said around 6.7 million domestic passengers travelled by air in August, 33.83 per cent higher than 5 million who travelled in July. The cap on capacity was increased to 72.5 per cent from August 12. Auto sector’s stocks too were in action as Society of Manufacturers of Electric Vehicles (SMEV) said that the production-linked incentive (PLI) scheme for auto and auto-components will build a self-sustaining framework for the e-mobility industry.

Finally, the BSE Sensex fell 125.27 points or 0.21% to 59,015.89 and the CNX Nifty was down by 44.35 points or 0.25% to 17,585.15.    

The BSE Sensex touched high and low of 59,737.32 and 58,871.73, respectively and there were 13 stocks advancing against 17 stocks declining on the index. 

The broader indices ended in red; the BSE Mid cap index fell 1.14%, while Small cap index was down by 1.06%.

The top gaining sectoral indices on the BSE were Telecom up by 0.90%, Bankex up by 0.70% and Finance up by 0.30%, while Metal down by 2.49%, Realty down by 2.04%, Basic Materials down by 1.78%, Power down by 1.64% and Energy down by 1.50% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 5.26%, HDFC Bank up by 1.51%, Bharti Airtel up by 1.39%, Maruti Suzuki up by 1.13% and Nestle up by 0.95%. On the flip side, Tata Steel down by 3.57%, SBI down by 2.07%, TCS down by 1.85%, Hindustan Unilever down by 1.66% and Reliance Industries down by 1.55% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its latest article on the state of the economy, published in the September bulletin, has said prospects are brightening for the Indian economy achieving ‘escape velocity’ from the pandemic as the second wave of COVID-19 wanes and preparedness for future remains on war-alert status. It said aggregate demand is gaining firmer ground, while on the supply side, IIP and core industries mirror improvement in industrial activity and services sector indicators point towards sustained recovery.

It mentioned ‘In August, we believe that India passed a turning point which consolidates and thrives come September.’ Further, it said the trajectory of inflation is shifting down more favourably than anticipated. It stated as pandemic scars heal and supply conditions are restored with productivity gains, a sustained easing of core inflation can be expected, which will reinforce the growth-supportive stance of monetary policy.

Besides, the article said domestic economic conditions rounded a turning point in August as growth impulses gathered momentum with the progressive opening up of the economy and scaling up of the vaccination drive. On aggregate demand, it said e-way bills remained above pre-pandemic levels of February 2020, signalling higher GST collections going forward. Besides, retail sales of motor vehicles registered growth over a low base in August last year; railways freight continued to be impressive; and fast-moving consumer goods sector surged, among others. Also, merchandise exports continued with their stellar performance.

The CNX Nifty traded in a range of 17,792.95 and 17,537.65 and there were 15 stocks advancing against 34 stocks declining, while 1 stock remains unchanged on the index.     

The top gainers on Nifty were Kotak Mahindra Bank up by 5.63%, HDFC Bank up by 1.64%, Bharti Airtel up by 1.52%, Eicher Motors up by 1.39% and Maruti Suzuki up by 1.21%. On the flip side, Tata Steel down by 3.76%, Coal India down by 3.45%, SBI down by 2.25%, TCS down by 1.97% and Hindalco down by 1.97% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 15.77 points or 0.22% to 7,011.71, France’s CAC decreased 16.67 points or 0.25% to 6,605.92 and DAX decreased 46.94 points or 0.3% to 15,604.81.

Asian markets ended mostly higher on Friday, despite mixed cues from Wall Street overnight as strong US retail sales and jobs data fuelled tapering expectations ahead of next week’s Federal Reserve meeting. South Korean shares rose due to expectations of economic recovery from the corona-virus pandemic, though gains were capped as investors refrained from placing big bets ahead of the country’s three-day holiday. Japanese shares gained amid signs of falling new virus cases in the country. Expectations of fresh economic stimulus under the new political leadership too supported the Japanese market’s sentiment. Moreover, Chinese shares closed higher ahead of the mid-autumn festival holiday, while shares of China Evergrande Group extended falls for the fifth consecutive session.

Asian Indices

Last Trade           

Change in Points

Change in %    

Shanghai Composite

3,613.97
6.88
0.19

Hang Seng

24,920.76
252.91
1.03

Jakarta Composite

6,133.25
23.31
0.38

KLSE Composite

1,548.51

-6.75

-0.43

Nikkei 225

30,500.05
176.71
0.58

Straits Times

3,071.23
6.69
0.22

KOSPI Composite

3,140.51
10.42
0.33

Taiwan Weighted

17,276.79
-1.91
-0.01
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