Sensex, Nifty slide as banks slip, virus cases surge Filed on August 3, 2020
Private sector lenders HDFC Bank Ltd and Kotak Mahindra Bank fell 1.7 per cent and 3 per cent, respectively. The Nifty banking index was down 1.34 per cent. - Reuters

The BSE S&P Sensex was down by 530.82 points or 1.41 per cent at 37,076.07 while the Nifty 50 slipped by 138.65 points or 1.25 per cent at 10,934.80 in mid-day trading.

Indian shares fell for the fourth straight session on Monday as banking stocks tumbled on mixed expectations for an upcoming interest rate decision, while surging domestic coronavirus cases also dented sentiment.

Sensex slipped on fourth day by 667.29 points or 1.77 per cent to 36,939.60 and Nifty ended below 10,900. The Sensex index had dropped as much as 1.83 per cent - or 688.88 points - to 36,918.01 in afternoon deals. The broader NSE Nifty 50 benchmark dropped as much as 1.68 per cent - or 185.6 points - to 10,887.85. 

Following the mixed market cues Indian market is trading lower. Nifty50 and BSE Sensex both are down by 0.0.90 per cent. The Nifty index, which gained 7.5 per cent in July, fell 0.89 per cent to 10,976.10 by 0430 GMT, while the Sensex was 1 per cent lower at 37,232.30, in the early trading.

Private sector lenders HDFC Bank Ltd and Kotak Mahindra Bank fell 1.7 per cent and 3 per cent, respectively. The Nifty banking index was down 1.34 per cent.

 "In Nifty50 decline is led by UPL which is down by 5.15 per cent, Indusind Bank is down by 3.45 per cent, Kotak Bank is down by 3.10 per cent. UPL reported 1per cent Y/Y revenue decline and quarter was hurt by high cost and exceptional loss related to acquisition of Arysta Life science. Among the sectoral index Bank is down by 1.53 per cent, IT is down by 0.75 per cent and Auto is up by 0.87per cent. For the day 10835 & 11115 could work as support and resistance for Nifty50," said Vijay Valecha, chief investment officer, Century Financial.

Meanwhile, Indian rupee ended 20 paise lower at 75.01 per dollar to quote at Dh20.43, amid selling seen in the domestic equity market.

The currency had extended the early losses was trading at day's low level at 74.93 per dollar to quote at Dh20.41, amid selling seen in the domestic equity market. Rupee opened lower at 74.90 per dollar against previous close of 74.81.

Abhishek Goenka, Founder and CEO, IFA Global, said: "RBI's FX Reserves rose another $5 billion to a record $522.6 billion . While the USD has weakened significantly against majors (EUR, GBP, CHF, JPY) on account of record low real rates in the US, it has not weakened as much against Asian and EM currencies."

Furthermore, RBI's aggressive dollar purchases have ensured that it has weakened even less against the INR. (74.50 has been acting as very strong support in USDINR). The rupee has therefore underperformed and weakened in relative terms.

"The overvaluation in the rupee has got corrected by close to 2 per cent over the last few sessions. The fact that RBI's FX purchases have continued for well over a month after its balance sheet date confirms that there are definitely more considerations behind RBI's intervention besides just the economic capital framework. Rupee is likely to trade 74.70-75.05 range. Asian currencies are mixed," added Goenka.

A more competitive rupee would aid exports and protect domestic manufacturers from cheap imports. 

"INR is appreciated by 0.03 per cent to 74.8925 after depreciated by 0.05 per cent to 74.9175 in previous session against US Dollar. Rupee could be in pressure amid weak global market cues and RBI policy decision due this week on Aug 6. For the day 74.50 and 75.50 could work as support and resistance," added Valecha.
- With inputs from Reuters,


Sandhya D'Mello

Journalist. Period. My interests are Economics, Finance and Information Technology. Prior to joining Khaleej Times, I have worked with some leading publications in India, including the Economic Times.

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