Market Recap for 4th September 2020

▼Nifty: 11,333 (-1.68%)   ▼Sensex: 38,357 (-1.63%)

Indian markets stumbled today amid uncertainty in US equities, which saw a major sell-off on Thursday led by a steep fall in tech stocks. All major Indian indices closed in the red. Banks led the fall, with the Nifty Bank index ending 2.2% lower. In all, 49 out of the Nifty 50 stocks declined, suggesting broad-based selling in the markets.

Banking stocks dip after FM and apex court offer breather on stressed loans

The Finance Minister and Supreme Court have asked lenders (banks and NBFCs) to not impair creditworthiness of borrowers under stress, after the six-month moratorium ended on August 31. As the economy passes through a challenging phase and businesses are yet to fully get back on their feet, a one-time loan restructuring could be on the cards. Selling in bank stocks continued, with Axis Bank (-3.8%), SBI (-2.7%), Bank of Baroda (-2.6%) and ICICI Bank (-2%) being the major losers.

Pipe stocks gain on strong agri demand  

With 3.4% growth in Q1, the agri sector emerged as the only bright spot, as the overall Q1 GDP contracted by 23.9%. Demand for PVC pipes used for irrigation appears to be inching back towards pre-Covid levels and is expected to remain robust in the year ahead. The stocks of major pipes manufacturers performed strongly in August 2020, with Finolex Industries (+8.9%), Jain Irrigation (+11.9%), Prince Pipes (+69.4%), Astral Poly (+16.3%) and Supreme Industries (+3.7%) posting healthy gains.

Bullion shines as equities fall under shadow of uncertainty

The massive sell-off in the U.S. markets on Thursday has not only created some uncertainty for equities, but has also triggered safe-haven demand for bullion. Comex gold prices, which dropped nearly 4% this week, nudged up 0.5% today. Similarly, silver prices rose 1% today. On the MCX, gold and silver traded higher by 0.3% and 0.6%, respectively.

Closing bell

In the last hour of the trade, metal stocks witnessed heavy selling with the Nifty Metal index falling 0.8%, and Tata Steel and Jindal Steel & Power both ending 1.4% lower. Next week, the domestic markets will take cues from the U.S. equities, after the big sell-off yesterday. The U.S. markets are expected to react to the non-farm payroll and unemployment data for August, which will be released today.