As per provisional closing data, the barometer index, the S&P BSE Sensex, fell 633.76 points or 1.63% at 38,357.18. The Nifty 50 index slipped 170.2 points or 1.48% at 11,357.50.
In the broader market, the S&P BSE Mid-Cap index tumbled 1.74% while the S&P BSE Small-Cap index fell 1.07%.
The market breadth was weak. On the BSE, 1015 shares rose and 1711 shares fell. A total of 187 shares were unchanged.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 2,63,09,711 with 8,68,805 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.
Sebi's New Margin Requirement:
Introduction of new margin requirement in the cash segment from 1 September 2020 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 2020, 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.
RBI Guidelines:
The Reserve Bank of India (RBI) on Friday said it has revised priority sector lending (PSL) guidelines to include entrepreneurship and renewable resources, in line with emerging national priorities. Revised PSL guidelines will enable better credit penetration to credit deficient areas; increase the lending to small and marginal farmers and weaker sections; boost credit to renewable energy, and health infrastructure.
The central bank doubled loan limits for companies in renewable energy segment to Rs 30 crore from earlier Rs 15 crore.
Inox Wind was up 1.98% while Sterling Wilson & Solar surged 6.34% higher to Rs 273.35.
Buzzing Index:
The Nifty Bank index tumbled 1.69% to 23,133.75, extending losses for second consecutive trading session. The index has slumped 3.1% in two days.
Axis Bank (down 4%), Federal Bank (down 3.23%), Bank of Baroda (down 2.96%), SBI (down 2.89%), RBL Bank (down 2.64%) and Punjab National Bank (down 2.32%) were top losers in Bank Nifty.
Banks were under pressure after the Supreme Court of India on Thursday passed an interim order saying that the accounts not declared as non-performing asset (NPA) as on 31 August shall not be declared as NPAs till further notice. When the Indian Bankers Association offered a two-month moratorium on declaring a non-serviced loan account as NPA, SC passed this interim order restraining banks from declaring loans as NPAs to protect borrowers, who are facing difficulties in arranging funds for loan repayment. The Supreme Court will continue the hearing of the case on 10 September.
Stocks in Spotlight:
Mahindra & Mahindra (M&M) fell 1.73%. The company on Thursday said it will acquire additional 9.12% stake for about Rs 12 crore in associate firm Carnot Technologies. Carnot Technologies is an Indian company, which provides products and services related to internet connected devices for monitoring performance of vehicles and equipment. It had a turnover of Rs 17.3 crore for the financial year ended 31 March 2020.
Jubilant Industries tumbled 5% 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 fell 1.8%. L&T 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. The contract involves supply of Pinaka launchers, battery command posts and associated Engineering Support Package (ESP) for four regiments. The Pinaka launch system has been indigenously developed by L&T as part of Pinaka development program of Defence Research & Development Organization (DRDO, ARDE) and functions as a high tech, all weather, long range, area fire artillery weapon system.
KEC International gained 1.2% after the company said it secured new orders worth Rs 1,401 crore across its various businesses.
CreditAccess Grameen rose 1.9% on BSE after the company's board of directors approved a proposal for fund raising by way of issue of equity shares of Rs 1,000 crore.
Global Markets:
The Dow Jones 30 Futures were trading up 233 points, indicating a strong start in US markets today.
European shares were up across the board while Asian stocks ended lower on Friday.
In US, stocks fell sharply on Thursday as tech stocks reversed uptrend. The Dow Jones Industrial Average slumped 807.77 points, or 2.8%, to 28,292.73 for its biggest one-day decline since 11 June 2020. The S&P 500 slid 3.5% to 3,455.06 and the Nasdaq Composite fell by 5% to close at 11,458.10.
Apple shares fell 8% for their biggest one-day decline since 16 March 2020. Amazon and Netflix were both down more than 4% and Facebook slid 3.8%. Microsoft slipped 6.2%. Alphabet pulled back by 5.1%.
In economic data, the number of first-time filers for unemployment benefits totaled 881,000 for the week ending 29 August 2020, compared to 1.011 million in the prior week, the Labor Department said Thursday. US imports jumped nearly 11% in July 2020, driving the trade gap up to $63.6 billion in the month, the Commerce Department reported Thursday.
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