Weak global cues and rising COVID-19 cases triggered selling. Ongoing geo-political tensions between India-China also weighed on the sentiment.
The broader market corrected after rising for three days. The S&P BSE Mid-Cap index fell 0.45% while the S&P BSE Small-Cap index lost 0.4%.
The market breadth was weak. On the BSE, 957 shares rose and 1474 shares fell. A total of 180 shares were unchanged.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, spurted 5.4% to 21.61. The Nifty September 2020 futures were trading at 11,403.20, at a premium of 10.3 points compared with the spot at 11,392.90.
The Nifty option chain for 10 September 2020 expiry showed maximum Call OI of 29.19 lakh contracts at the 11,500 strike price. Maximum Put OI of 20.78 lakh contracts was seen at 11,300 strike price.
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The Nifty option chain for 24 September 2020 expiry showed maximum Call OI of 19.67 lakh contracts at the 11,500 strike price. Maximum Put OI of 30.39 lakh contracts was seen at 11,000 strike price.
Buzzing Index:
The Nifty Auto index gained 0.86% to 8,118.85. The index has jumped 3.55% in four trading days.
Maruti Suzuki (up 3.12%), Ashok Leyland (up 1.87%), Amaraja Batteries (up 1.22%), Tata Motors (up 0.76%), TVS Motor (up 0.6%) and Hero MotoCorp (up 0.5%) were top gainers in automobile segment.
Stocks in Spotlight:
Jubilant Industries tumbled 4.07% to Rs 151 after the company reported a consolidated net loss of Rs 3.10 crore in Q1 June 2020 as against net profit of Rs 9.55 crore in Q1 June 2019. Net sales during the quarter slumped 37.9% year-on-year (YoY) to Rs 94.32 crore. On the segmental front, revenue from agro products stood at Rs 54.32 crore (up 9.9% YoY) while the revenue from performance polymers stood at Rs 40.31 crore (down 60.9% YoY) in June 2020.
Larsen & Toubro (L&T) fell 1.15%. The EPC major on Friday said its defence arm secured a significant contract from the Indian Ministry of Defence (MoD) for supplying four regiments of Pinaka Weapon Systems. As per the L&T's classification, the valuation of the 'significant' order stands between Rs 1,000 crore and Rs 2,500 crore. The announcement was made during market hours today, 4 September 2020.
Sebi's New Margin Requirement:
Introduction of new margin requirement in the cash segment from 1st September also put pressure on the bourses. As per the new rule, it is mandatory for brokers to collect margins from investors upfront for any purchase or sale of shares. Failing to do so will attract a penalty.
Sebi had initiated a change in margin collection norms from 1 September, but the process did not see a smooth pick-up, as it was marred by tech glitches and chaos. This chaos has resulted in a significant fall in derivative positions.
The National Stock Exchange (NSE) issued a circular on Thursday, extending the deadline for the imposition of penalty on brokers for not collecting adequate margins by fifteen days till 15 September 2020.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 26,220,930 with 867,630 deaths. India reported 8,31,124 active cases of COVID-19 infection and 68,472 deaths while 30,37,151 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
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