Key equity benchmarks ended with small losses on Thursday. Trading was volatile on account of weekly expiry of options on the National Stock Exchange. Gains in auto stocks were negated by losses in banks stocks.
The barometer index, the S&P BSE Sensex, fell 77.97 points or 0.21% to 36,646.74, as per the provisional closing data. The Nifty 50 index fell 4.1 points or 0.04% to 10,840.65, as per the provisional closing data.
The Nifty opened above 10,850 level and managed to cross 10,900 mark. Indices reversed gains in mid-morning trade with the Nifty sliding below 10,850. The 50-unit index recovered after hitting the day's low of 10,816 in afternoon trade.
The broader market ended higher. The S&P BSE Small-Cap index rose 0.72%. The S&P BSE Mid-Cap index rose 0.1%.
The market breadth was strong. On the BSE, 1458 shares rose and 978 shares fell. A total of 142 shares remain unchanged.
Among key index pivotals, TCS (down 1.52%) and HDFC (down 2.69%) weighed on the indices.
Yes Bank (up 3.78%), NTPC (up 3.43%) and Tata Steel (up 1.71%) advanced. HCL Technologies (down 1.34%) and Tech Mahindra (down 1.19%) declined.
The Reserve Bank of India (RBI) has made it mandatory for banks to link all new floating rate personal or retail loans and floating rate loans to MSMEs to an external benchmark effective 1 October 2019. The banks are free to choose one of the several benchmarks such as the Reserve Bank of India policy repo rate, Government of India 3-Months Treasury Bill yield published by the Financial Benchmarks India (FBIL), Government of India 6-Months Treasury Bill yield published by the FBIL and any other benchmark market interest rate published by the FBIL. The banks are also free to choose their spread over the benchmark rate, subject to the condition that the credit risk premium may undergo change only when borrower's credit assessment undergoes a substantial change, as agreed upon in the loan contract, the RBI added
The S&P BSE Bankex declined 0.9% at 30,241.83 with ICICI Bank (down 1.86%), Federal Bank (down 1.4%) and RBL Bank (down 1.22%) making the biggest losses.
Auto stocks rallied after Nitin Gadkari, Minister of Road Transport and Highways of India, addressed the 59th SIAM Annual Convention. The S&P BSE Auto index rose 2.12% at 15,562.33 with Escorts (up 2.53%), Maruti Suzuki India (up 2.21%), Mahindra & Mahindra (up 2.05%), TVS Motor Company (up 1.78%), Hero MotoCorp (up 1.74%) and Bajaj Auto (up 1.64%) rising.
The conference titled "Moving into a New Era of Auto Industry" focused on future of auto segment. The Minister of Road Transport and Highways of India clarified that govt does not intend to ban petrol & diesel vehicles. Mr Gadkari, addressing what he called the industry's concern over the possibility of a ban on internal combustion engine vehicles. He further clarified that the government was well aware of the contribution that India's automobile industry was making to the country's exports and employment. The minister further added that he will take up the industry demand for GST cut with finance minister. On the issue of flagging automobile sales, he said the industry should suggest ways to the government to revive growth. To auto boost sales, Mr. Gadkari said, automakers should consider starting a non-banking finance company for lending to buyers.
Punjab National Bank surged 2.42% after foreign credit rating agency Moody's affirmed bank's credit rating. Moody affirmed bank's credit ratings from Stable outlook to Positive. The rating was affirmed after anticipating that the bank's customer account's (BCA) will likely improve after the capital infusion from the government, along with improving its financial metrics.
State-run ONGC jumped 5.59% after the company said that its offshore crude supply remained unaffected by the recent fire accident in Mumbai unit. The company said that an unfortunate accident took place at Uran oil and gas processing plant in Mumbai on 3 September 2019.
Power Grid Corporation of India gained 0.43%. The company was declared as the successful bidder under Tariff Based Competitive Bidding to establish transmission system for Intra-State Transmission Work associated with construction of 400 kV Substation near Guna (Distt.-Guna, Madhya Pradesh) & Intra-State Transmission Work associated with construction of 220 kV Substation near Bhind (Distt.-Bhind, Madhya Pradesh) on build, own operate and maintain (BOOM) basis. The Transmission system also comprises associated 400kV, 220kV and 132kV Transmission lines in Madhya Pradesh. The Letter of Intent (LoI) dated 2 September 2019 has been received by the company. The announcement was made after market hours yesterday, 4 September 2019.
NMDC rose 1.76%. The state-run company said that total production of iron ore on a provisional basis fell to 1.41 million tonnes (MT) in August 2019 from 1.46 MT in August 2018. Total sales of iron ore on a provisional basis dropped to 1.49 MT in August 2019 from 2.32 MT in August 2018. The announcement was made after market hours yesterday, 4 September 2019.
Dr Reddy's Laboratories was up 2.74%. The drug maker announced that it has launched Bupropion Hydrochloride Extended-Release tablets, USP (SR), a therapeutically equivalent generic version of Zyban (Bupropion Hydrochloride) Extended-Release Tablets, approved by the United States Food and Drug Administration (USFDA).
Hindalco Industries rose 1.32% after the company's US subsidiary Novelis reaffirmed its commitment to acquire Aleris. Novelis reaffirmed its full commitment to closing its proposed acquisition of Aleris Corporation, notwithstanding the U.S. Department of Justice (DOJ) lawsuit to block the transaction. Novelis intends to vigorously defend against the DOJ's challenge, which it believes is without merit. The company is confident that the transaction will ultimately receive all necessary regulatory approvals in the U.S. and in other relevant jurisdictions.
Overseas, most shares in Europe and Asia advanced on Thursday, after confirmation of new US-China trade talks and Hong Kong showing signs of easing.
China's Ministry of Commerce said Thursday that U.S. and Chinese trade negotiators held a phone call in the morning and agreed to meet in early October for another round of negotiations.
China's Shanghai Composite was up 0.96% after Hong Kong Chief Executive Carrie Lam fully withdrew the controversial extradition bill which caused months of violent protests in the city.
Meanwhile, British Prime Minister Boris Johnson on Wednesday failed in his bid to call a snap general election for 15 October. A bill introduced by opposition parties to block Johnson from taking the U.K. out of the European Union without a deal on October 31 was also passed and will not ascend to the House of Lords, the upper chamber of parliament. The bill is now expected to pass through the Lords and be presented for royal ascent on Friday.
US stocks advanced on Wednesday, after robust economic data from China, easing tensions in Hong Kong and British lawmakers' approval of a law to delay Brexit provided relief to investors worried about global growth.
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