Sensex Trades on a Volatile Note; IndusInd Bank & Bajaj Finance Top Losers

Thu, 4 Jun 12:30 pm | Monish Vora, TM Team

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Share markets in India have erased early gains and are presently trading on a volatile note, fluctuating between gains and losses.

Benchmark indices started today's session on a lacklustre note, following six days of rally. The BSE Sensex climbed up as much as 200 points in the first few minutes of trade. However, gains were erased thereafter.

Currently, the BSE Sensex is trading down by 224 points.

Meanwhile, the broader NSE Nifty is trading down by 71 points.

The BSE Mid Cap index and the BSE Small Cap Index are trading down by 0.2%.

Sectoral indices are trading on a mixed note with stocks in the consumer durables sector and banking sector witnessing selling pressure.

On the other hand, pharma stocks and IT stocks are witnessing buying interest.

Gold prices are trading up by 0.2% at Rs 46,124 per 10 grams.

The rupee is currently trading at 75.47 against the US$.

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Moving on, market participants are tracking Saregama share price.

Shares of the company are locked in the upper circuit limit for the second straight day today, after the company announced a global deal with Facebook to license its music for video and other social experiences across Facebook & Instagram.

Shares of the company have zoomed 44% in the past two trading days from Rs 278 on Tuesday.

The company's board is scheduled to meet on Friday, June 5, 2020 to consider and approve audited financial results of the company for the quarter and financial year ended March 31, 2020 and recommendation of dividend, if any.

In news from the insurance sector, UK's Standard Life is looking to sell 40 million shares in HDFC Life Insurance Company through block deals to raise up to 19.6 billion, according to a term sheet issued by BofA Securities.

Reportedly, Standard Life will sell stake in HDFC Life at Rs 490-501.35 per share.

Since January last year, the UK-based firm has divested nearly 17% stake in HDFC Life. Standard Life held 29.25% stake as on December 2018, which has reduced to 12.25% at the end of March 2020.

Standard Life will hold 10.27% in the insurance company post the deal.

In other news, Housing Development Finance Corporation (HDFC), the promoter of HDFC Life sold 26 million shares of the insurance company through an open market transaction on Wednesday.

According to bulk deal data available with the BSE, the shares were offloaded on an average price of Rs 490.22 apiece, valuing the transaction at Rs 12.7 billion.

HDFC Life Insurance share price is presently trading up by 3.2%.

Moving on to news from the finance sector, the Finance Ministry on Wednesday said that public sector banks (PSBs) have disbursed Rs 38,927.8 million in the first two days of the month under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus-induced lockdown.

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Meanwhile, PSBs have sanctioned loans worth Rs 103.6 billion under the 100% ECLGS starting June 1.

Last month, the cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25% through ECLGS for the MSME sector.

Under the scheme, 100% guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers, in the form of a guaranteed emergency credit line (GECL) facility.

For this purpose, a corpus of Rs 416 billion was provided by the government spread over the current and the next three financial years.

Note that this scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat package announced by Finance Minister Nirmala Sitharaman last month.

Speaking of the stimulus package, note that investors were disappointed by the measures announced. Indian stock markets had crashed over 3% as the measures announced failed to provide any near-term relief.

However, it is interesting to note that unlike the previous stimulus packages, this one is no longer a tiny fraction of India's GDP.

This is the largest stimulus package ever announced by India.

At about 10.2%, it is among the biggest stimulus packages announced over the past few months by governments all around the world. This is evident in the chart below:

Now, executing the package, keeping India's long-term economic interests in mind, will be the key.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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