The benchmark stock indices have opened this morning with further losses after the sharp fall of over 2% witnessed on Monday.
Overnight, global stocks witnessed a sharp fall as well affecting sentiments in India this morning.
Join us as we follow the top business news through the day.
Don't fight the Fed and the Treasury
Sensex tumbles 300 points; Nifty ends below 11,200
Another weak day for the stock indices which failed to recover opening losses.
PTI reports: "Equity benchmark Sensex tanked 300 points on Tuesday, tracking losses in index-heavyweights Reliance Industries, HDFC twins and Maruti amid weak cues from Asian peers.
The 30-share BSE index settled 300.06 points or 0.79 per cent down at 37,734.08. The broader NSE Nifty fell 96.90 points or 0.86 per cent to 11,153.65.
Maruti was the top loser in the Sensex pack, shedding around 3 per cent, followed by L&T, IndusInd Bank, Axis Bank, ONGC, Reliance Industries, Asian Paints and HDFC.
On the other hand, HCL Tech, TCS, Sun Pharma and Tech Mahindra were among the gainers.
Indian market was subdued following continued selling in other major markets across the globe due to fresh worries over another round of restrictions due to increase in COVID-19 cases, which could harm the already sluggish economic recovery, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.
During the afternoon session market briefly tried to recover, but failed to sustain as fresh selling across the broader markets returned, he added.
Bourses in Shanghai, Hong Kong and Seoul ended with losses, while stock exchanges in Europe opened on a positive note.
Meanwhile, global oil benchmark Brent crude was trading 1.30 per cent higher at USD 41.98 per barrel.
In the forex market, the rupee depreciated 20 paise to close at 73.58 against the US dollar."
PSBs get more retail credit inquiries than pvt banks during Jul-Aug on faster branch reopening: Report
An interesting aberration.
PTI reports: "The state-run lenders are seeing faster pick up in retail credit inquiries than their private counterparts on quicker reopening of branch network, a report by a credit information company (CIC) said on Tuesday.
Despite the inroads done by digital alternatives, through which lenders are receiving inquiries and even disbursing loans online, branch offices continue to play an important role, Transunion Cibil said in the report.
The lenders get in touch with CICs while doing diligence on every credit proposal, which triggers in inquiries.
It can be noted that many analysts have said that a large share of the incremental credit demand is coming from the more aggressive private sector lenders who also have larger capital buffers.
“Public (sector) lenders saw the biggest rebound in inquiries in July and August 2020, most likely because they were early in recommencing operations than their private and NBFC (non-bank finance companies) counterparts,” the report by Cibil said.
Inquiries from over a dozen state-run lenders for the two months were at 102 per cent of the same observed in January-February this year and 118 per cent of that in the same period a year ago, it said.
The same numbers for the private sector lenders were at 70 per cent and 78 per cent, respectively, while for NBFCs and housing finance companies, inquiries were much lower at 51 per cent of the pre-COVID period in January-February and 57 per cent of the levels observed in July-August last year.
At a system-wide level, inquiry volumes rebounded in July-August, but were still lower than the pre-COVID period, the report said, adding that as of August 2020, the inquiries were at the same level as during April 2018.
It also said that a lot of demand seen in July-August was pent-up loan demand which had been affected due to the coronavirus-induced lockfowns.
In what can be called as a welcome step, a bulk of the inquiries were for secured lending products like mortgages, auto loans, while those for unsecured ones like personal loans and credit cards were trending lower.
It can be noted that concerns over asset quality have been raised following instances of job losses or salary cuts as a result of the pandemic-induced economic contraction.
As cities continue to dominate the data of new COVID-19 infections, a larger proportion of inquiries came from rural and semi-urban areas, Cibil said.
The share of metro areas in credit inquiries fell to 37 per cent in July-August as against 41 per cent in the same period a year ago and 40 per cent in January-February this year, it said.
Share of inquiries from rural pockets increased to 17 per cent during the two unlock months from 15 per cent in July-August 2019 and 16 per cent in January-February 2020, it said."
Rupee skids 20 paise to 73.58 against US dollar
The rupee only managed to weaken further during the day as stocks failed to rally.
PTI reports: "The rupee depreciated 20 paise and settled at 73.58 (provisional) against the US dollar on Tuesday tracking negative domestic equities.
At the interbank forex market, the rupee opened on a weak note at 73.50, then fell further and finally closed at 73.58 against the greenback, registering a fall of 20 paise over its last close.
The rupee strengthened by 7 paise to close at 73.38 against the US dollar on Monday.
During the session, the domestic unit witnessed an intra-day high of 73.38 and a low of 73.64 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.04 per cent to 93.61.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 341.86 points lower at 37,692.28 and broader NSE Nifty slipped 115.05 points to 11,135.50.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 539.81 crore on Monday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.65 per cent to USD 41.71 per barrel."
SBI allows online check for COVID-19 loan rejig
State Bank of India (SBI) has rolled out a facility on its website for restructuring COVID-19-impacted home, auto, personal and education loans. Retail borrowers can check their eligibility for the restructuring of their loans without visiting the bank’s branches. They need to enter the account number and after OTP verification, can find out if they are eligible. Once eligible they will get a reference number which they can use while visiting the branch with the requisite papers to complete the formality in less than 30 minutes.
Of the bank’s total retail customers, 9% had applied for moratorium and the eligible customers for loan restructuring would come from this pool, senior bank officials said. C. S. Setty, Managing Director (Retail & Digital Banking), SBI said this portal would help customers to find it operationally convenient to check their eligibility before they visit a branch. Out of the 3500 people who had logged on to the portal before 2.15 p.m. on Monday, only 111 were found to be eligible for restructuring, he said.
Gold steadies as fresh lockdowns offset firm dollar
Interesting moves in gold as stocks turn volatile.
Reuters reports: "Gold prices steadied in a tight range on Tuesday, as worries over rising COVID-19 cases across Europe countered pressure from a stronger U.S. dollar ahead of key speeches by Federal Reserve policymakers this week.
Spot gold was up 0.1% at $1,914.28 per ounce by 0431 GMT, after dropping more than 3% to at $1,882.70, its lowest level since Aug. 12 on Monday. U.S. gold futures gained 0.5% to $1,919.70 on Tuesday. Earlier in the day, a firmer U.S. dollar dented gold's appeal, with the dollar index holding on to overnight gains against its rivals. A firmer dollar makes bullion more expensive for holders of other currencies.
“Gold is now more sensitive to the U.S. dollar rather than any other factors,” said Margaret Yang, a strategist with DailyFx, which covers currency, commodity and index. But offering support to gold were concerns about fresh lockdowns in Europe, which has reported a surge in virus cases. Doubts about a swift economic recovery also kept investors away from riskier assets. “In the near-term, gold may struggle to hold gains above $1,900 ... In the event that it breaks down $1,900 it may open more room to the downside towards maybe $1,870,” she added.
Investors are now eyeing speeches by Fed committee members, including Chairman Jerome Powell, who will appear before Congressional committees this week. “Central banks would continue to have major concerns about economic growth,” Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.
“Ultra-low yields and negative real interest rates will remain as they are now for much longer, this should provide support for the gold prices in the longer term.”
Lower interest rates decrease the opportunity cost of holding non-yielding bullion. Gold, which has risen nearly 26% this year, is also widely viewed as a hedge against inflation and currency debasement. Elsewhere, silver was flat at $24.73 per ounce, platinum was up 1.2% at $891.75 and palladium rose 0.9% to $2,293.71."
Shares slip as surging virus cases raise fears of prolonged economic slump
Fears of a second coronavirus wave across the globe weighed on stocks.
Reuters reports: "Indian shares fell on Tuesday following concerns that rising coronavirus cases could stall an economic recovery, while fears of fresh lockdowns in some European countries threatened to further hit global supply chains and weighed on domestic sentiment.
The broader NSE Nifty 50 index fell 0.70% to 11,175.95 and the S&P BSE Sensex was down 0.8% to 37,746 by 0504 GMT. Both the indexes fell more than 2% on Monday.
In India, total coronavirus cases touched 5.6 million as of Tuesday. European countries mulled tightening restrictions to curb a sharp resurgence in cases, while the COVID-19 death toll in the U.S. approached 200,000.
“Markets think that some sectors which picked on opening up of the economy such as commodities, auto and real estate will feel the heat again with rising cases and lockdown restrictions coming back in certain countries,” said Saurabh Jain, assistant vice president at SMC Global Securities Ltd.
Among the top losing sectors, the Nifty metals index slid 1.2%, Nifty realty fell 3.0% and Nifty public sector was down 2.0%.
Shares of Adani Group's listed companies fell after a report on alleged suspicious financial transactions from Seychelles.
India's federal police said on Monday they had registered a case against dairy company Kwality Ltd and its directors for allegedly cheating a consortium of banks of around 14 billion rupees ($190 million).
Meanwhile, Asian shares dropped on Tuesday due to concerns about new pandemic lockdowns in Europe and possible delays in fresh U.S. stimulus.
“There is no follow-up buying at the dips. Lot of companies want to raise money and liquidity is getting dried up,” AK Prabhakar, head of research at IDBI Capital said.
Shares of steel equipment maker GMM Pfaudler fell 10% after the company said on Monday that its promoters planned to sell about 17.6% stake."
IT services industry has stabilised: Rishad Premji
The IT services industry has stabilised with customers coming back, looking for a shift to digital, said Rishad Premji, chairman, Wipro.
Speaking at an All India Management Association (AIMA) event, Mr. Premji said Indian IT services industry struggled during the April-June quarter because customers had cut spending on technology early on during the COVID-19 crisis.
Since then, the industry has stabilised with customers coming back looking for help in shifting to the digital model. “There is a change in the customers’ mindset and they are becoming more comfortable with the digital medium,” he said.
He further said the digital-delivery model had opened up tremendous opportunities for the Indian IT sector, especially in the area of talent sourcing.
Newly passed farm bills will ensure sustainable, profitable future for farming community: FAIFA
Some words of support for the controversial farm bills passed by Parliament.
PTI reports: "The newly passed farm bills will give farmers the freedom to trade across states and empower them to turn into traders of their own produce and be in control of the process, Federation of All India Farmer Associations (FAIFA) said on Tuesday.
Welcoming the step taken by the Prime Minister Narendra Modi-led government, FAIFA which claims to represent farmers and farm workers of commercial crops across Andhra Pradesh, Telangana, Karnataka and Gujarat, said the new set of bills passed by the Parliament will go a long way in ensuring farmer prosperity and doubling of income.
“These visionary bills will ensure a sustainable and profitable future for the farming community,” FAIFA said in a statement.
Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill were passed by both the house of parliament, amid protests by opposition parties like the Congress, TMC, DMK and the Left, as well as some farmer groups.
“The new regulation will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of agri-produce and promote barrier-free inter and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations,” FAIFA President B V Jaware Gowda said.
These timely crucial steps taken by the government will serve as cornerstones for envisioning a fair market for farmers that lets them receive their fair price by letting them be in control of their incomes with freedom to trade, he added.
“These are cohesive decisions that will go a long way in fortifying an agri-led economic development agenda for India that values its farmers at every step of the way,” Gowda said."
Banks not risk averse: SBI chief
Asserting that there is a muted demand for loans, SBI Chairman Rajnish Kumar on Monday said banks are not risk averse but being prudent in these trying times to avoid a repeat of the post-2008 scenario when there was ‘dilution’ in credit underwriting standards.
Data clearly shows that investment in the economy has come down, the head of the country’s biggest lender said. “If the capex [capital expenditure] is not happening and investment in the economy is not happening at the same pace, then obviously this is a demand issue and the risk aversion would be where there is a demand and banks are not lending,” he said at a virtual event organised by AIMA. Non-food bank credit grew 6.7% year-on-year in July as against growth of 11.4% in the same month of 2019, as per latest data from the Reserve Bank of India. Bank credit in July stood at ₹91.48 lakh crore.
Contrarian bets are turning out to be losers this time
Rupee skids 13 paise to 73.51 against US dollar in early trade
The negative sentiment in stocks is weighing on the rupee too.
PTI reports: "The rupee depreciated 13 paise to 73.51 against the US dollar in opening trade on Tuesday tracking muted domestic equities.
At the interbank forex market, the rupee opened on a weak note at 73.50, then fell further to 73.51, registering a fall of 13 paise over its last close.
The rupee strengthened by 7 paise to close at 73.38 against the US dollar on Monday.
“Most of the Asian currencies have started marginally weak this Monday and could weigh on sentiments,” Reliance Securities said in a research note.
Markets could also track weakness in the equities. Most Asian equities have started on a negative note on global risk aversion, it added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.14 per cent to 93.52.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 290.04 points lower at 37,744.10 and broader NSE Nifty slipped 95.10 points to 11,155.45.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 539.81 crore on Monday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.46 per cent to USD 41.63 per barrel."
‘Privatise select PSU banks’
Former RBI Governor Raghuram Rajan on Monday suggested that the government should privatise select public sector banks, set up a bad bank to deal with NPAs and dilute the Department of Financial Services’ role.
The reforms are necessary to ensure growth of banking activity without the periodic boom-bust cycles, Dr. Rajan and former RBI Deputy Governor Viral Acharya said in a paper titled ‘Indian Banks: A Time to Reform?’.
“Re-privatisation of select PSBs can then be undertaken, bringing in private investors who have both financial expertise as well as technological expertise; corporate houses must be kept from acquiring significant stakes, given their natural conflicts of interest.
Indian shares fall; rising COVID-19 cases, lockdown fears in Europe hurt sentiment
After yesterday's sharp fall, stocks have opened the day with further losses.
Reuters reports: "Indian shares inched lower on Tuesday after a sharp sell-off in the previous session, as rising global COVID-19 cases and concerns over fresh lockdowns in Europe weighed on sentiment.
The broader NSE Nifty 50 index fell 0.1% to 11,233.50 and the S&P BSE Sensex 0.09% to 37,995.39 by 0348 GMT. Both the indexes fell more than 2% on Monday.
India's federal police on Monday said they had registered a case against dairy company Kwality Ltd and its directors for allegedly cheating a consortium of banks of around 14 billion rupees ($190 million).
Asian shares dropped on Tuesday due to concerns about new pandemic lockdowns in Europe and possible delays in fresh U.S. stimulus.
In India, total novel coronavirus cases touched 5.49 million as of Monday, while the COVID-19 death toll in the United States approached 200,000.
Among sectors, the Nifty metals index slid 1% and the Nifty public sector index 1.1%. Both the indexes were the top drags."
Investors lose ₹4.23 lakh cr. as global sell-off hits stocks
The Sensex dived 812 points while the Nifty closed below the 11,300-mark on Monday, in tandem with a global sell-off after a resurgence of COVID-19 cases in Europe stoked fears of another round of lockdowns.
Denmark, Greece and Spain have imposed fresh curbs to tackle a surge in infections. Britain too is considering a second lockdown, prompting investors in Europe to offload travel, consumption and banking stocks.
Falling for the third straight session, the BSE Sensex ended 811.68 points, or 2.09%, lower at 38,034.14. The NSE Nifty tumbled 2.21% to 11,250.55. IndusInd Bank was the top loser in the Sensex pack, sliding 8.67%, followed by Bharti Airtel, Tata Steel, ICICI Bank, M&M, Maruti and Axis Bank.
