Trading for the week began on weak note as the key indices dropped sharply in early trade. At 9:28 IST, the barometer index, the S&P BSE Sensex, was down 282.09 points or 0.75% at 37,324.80. The Nifty 50 index was down 79.40 points or 0.72% at 10,994.05. The Nifty dropped below the psychological 11,000 level. Shares of Bandhan Bank dropped sharply on huge volume. Global surge of new coronavirus cases and rising US-China tensions weighed on sentiment.
The S&P BSE Mid-Cap index was up 0.48%. The S&P BSE Small-Cap index was up 0.69%.
The market breadth, indicating the overall health of the market, is positive. On the BSE, 924 shares rose and 729 shares fell. A total of 115 shares were unchanged.
Macroeconomic data:
India's infrastructure output contracted 15% in June from a year earlier, government data released on Friday showed, as a lockdown in response to COVID-19 weighed on economic activities. Infrastructure output, which comprises eight sectors including coal, crude oil and electricity and accounts for nearly 40% of industrial output, contracted 24.6% in the three months through June - the first quarter of the fiscal year - from a year earlier, the data showed.
GST collections in July fell to Rs 87,422 crore from Rs 90,917 crore in June, according to a Finance Ministry statement. However, July collections are higher than Rs 62,009 crore in May and Rs 32,294 crore in April.
Stocks in news:
Tata Motors surged 6.55%. Tata Motors reported a consolidated net loss of Rs 8438 crore in Q1 June 2020, higher than net loss of Rs 3,698.34 crore in Q1 June 2019. Net sales in Q1 June 2020 stood at Rs 31,481.86 crore, falling 48% from Rs 60,830.16 posted in Q1 June 2019. The auto maker said that the nationwide lockdown resulted in the production and retailer shutdowns for major part of the quarter and heavily impacted the volumes. Negative operating leverage impacted the performance significantly.
Maruti Suzuki India rose 1.89%. The company reported total sales of 108,064 units in July 2020, up 88.2% as against 57,428 units sold in June 2020. Annually, the total sales have fallen 1.1% from 109,264 units sold in July 2019. While total domestic sales rose 1.3% to 101,307 units, total exports sales have fallen 27% to 6,757 units in July 2020 over July 2019.
Mahindra & Mahindra (M&M) rose 1.48%. M&M reported 36% decline in total automobile sales to 25,678 units in July 2020 from 40,142 units in July 2019. Sequentially, the total auto sales have jumped 32.6% as compared to 19,358 units sold in June 2020. While total domestic sales declined 35% year-on-year (YoY) to 24,211 units, total exports fell 45% YoY to 1,467 units in July 2020.
UPL lost 6.13%. The company's consolidated net profit surged 93.3% to Rs 551 crore in Q1 June 2020 compared with Rs 285 crore in Q1 June 2019. Consolidated revenue from operations stood at Rs 7833 crore in Q1 June 2020, declining 1% compared with Rs 7906 crore in Q1 June 2019.
Tata Chemicals fell 3.09% after the company reported a 67.2% drop in consolidated net profit to Rs 74.15 crore in Q1 June 2020 from Rs 226.33 crore posted in Q1 June 2019. Consolidated net sales for Q1 June 2020 stood at Rs 2,348.16 crore, falling 9% from Rs 2584.03 crore in Q1 June 2019.
Bandhan Bank slumped 8.44% to Rs 316.10 on huge volume of 35.76 crore shares. The bank's promoters were to reportedly sell up to 20.9% equity stake in the bank through block deal today, 3 August 2020. Floor price for share sale in Bandhan Bank was set at Rs 311.10 per share.
Godrej Agrovet advanced 2.25% after the company reported 16.46% rise in consolidated net profit to Rs 88.51 crore on 8.56% fall in total income to Rs 1,572.02 crore in Q1 June 2020 over Q1 June 2019.
Global Markets:
Overseas, Asian stocks were trading mixed on Monday as U.S. lawmakers struggled to hammer out a new stimulus plan and a global surge of new coronavirus cases showed no sign of abating.
A private survey released Monday showed China's manufacturing activity expanded in July. The Caixin/Markit manufacturing Purchasing Manager's Index came in at 52.8 for July as compared to 51.2 for June.
Japan's economy shrank an annualised 2.2% in January-March, unchanged after a second revision, data from the Cabinet Office showed on Monday. On a quarter-on-quarter basis GDP shrank 0.6%, unchanged from the second preliminary reading.
South Korea's manufacturing activity shrank at a much slower pace in July, signalling that a gradual recovery in demand is gaining momentum on easing lockdowns, although the resurgence in infections remained a risk. The IHS Markit purchasing managers' index (PMI) rose to 46.9 in July from 43.4 in June, marking the highest reading since January. But that was still below the 50 threshold that separates growth from contraction.
On Friday, Fitch Ratings cut the outlook on the United States' triple-A rating to negative from stable, citing eroding credit strength and a ballooning deficit. The credit rating agency also said the future direction of U.S. fiscal policy depends in part on the November election and the resulting makeup of Congress, cautioning there is a risk policy gridlock could continue.
Tensions between Washington and Beijing likely continued being watched by investors, with U.S. Secretary of State Mike Pompeo reportedly saying Sunday that U.S. President Donald Trump is set to announce in the coming days new actions related to Chinese software companies viewed by his administration as a national security threat.
On Friday, Trump reportedly said he will act soon to ban Chinese-owned video app TikTok from the U.S.. Microsoft on Sunday confirmed it has held talks to buy TikTok in the U.S. from Chinese tech firm ByteDance.
In US, stocks wiped out earlier losses and closed higher on Friday as the biggest tech companies and market leaders soared after posting stellar quarterly results. Inspired by blowout earnings from tech heavyweights Apple, Amazon, Facebook and Google parent Alphabet, stocks rallied at the open, slipped into mostly negative territory during the session, and then recovered in the final hour.
Shares of Apple roared 10.5% higher to a new all-time high, after the iPhone maker reported record profit, and announced a 4-for-1 stock split. Amazon, meanwhile, jumped 3.7% after delivering results that soared past forecasts for sales and earnings. Facebook shares rallied 8.2% as the social media giant easily topped expectations for earnings and revenue. Alphabet shares were down 3% after the Google parent met expectations despite a dip in advertising revenue.
There was little sign of progress in talks between congressional Democrats, Republicans and the White House on a new coronavirus relief bill with expanded unemployment benefits due to expire Friday. Democrats rejected a White House proposal to temporarily extend the $600-a-week in added benefits, saying the Trump administration didn't understand the severity of the crisis.
Consumer sentiment deteriorated amid a resurgence in new coronavirus cases. The final reading of the index of consumer sentiment stood at 72.5 in July, lower than the flash estimate of 73.2 early in the month and down from June's 78.1, the University of Michigan said Friday.
Back home, key domestic benchmarks ended with modest losses on Friday, dragged by Reliance Industries and HDFC twins. Global cues were subdued following a record contraction in US gross domestic in the second quarter. The S&P BSE Sensex dropped 129.18 points or 0.34% at 37,606.89. The Nifty 50 index fell 28.70 points or 0.26% at 11,073.45.
Foreign portfolio investors (FPIs) sold shares worth Rs 958.64 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 442.73 crore in the Indian equity market on 31 July, provisional data showed.
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