Nifty hovers below 11,200 mark; Asian markets edge mostly lower

The equity barometers continued to trade with significant losses in mid-morning trade. Shares declined across Asia amid concerns about fresh pandemic lockdowns in Europe.

At 11:25 IST, the barometer index, the S&P BSE Sensex, was down 321.67 points or 0.85% at 37,712.47. The Nifty 50 index lost 110.80 points or 0.98% at 11,139.75.

The broader market tumbled. The S&P BSE Mid-Cap index fell 2.01% while the S&P BSE Small-Cap index declined 2.46%.

Sellers outweighed buyers. On the BSE, 438 shares rose and 1900 shares fell. A total of 115 shares were unchanged.

Economy:

The government on Monday hiked the minimum support prices (MSPs) for all mandated Rabi crops for marketing season 2021-22. The highest increase in MSP has been announced for lentil (Rs 300 per quintal) followed by gram and rapeseed & mustard (Rs 225 per quintal each) and safflower (Rs 112 per quintal). For barley and wheat, an increase of Rs 75 per quintal and Rs 50 per quintal respectively has been announced.

The move came a day after Parliament approved two agriculture sector-reform bills which have been bitterly opposed by the opposition parties over doubts that the new legislations might end MSP-based procurement by the government.

Buzzing Index:

The Nifty Pharma index was up 0.11% to 11,812.55. It was the only sectoral index on the NSE to trade in the green. The index tumbled 4.23% on Monday.

Cipla (up 1.33%), Aurobindo Pharma (up 0.92%) and Sun Pharma (up 0.67%) rose while Alkem Laboratories (down 2.21%), Biocon (down 1.60%) and Cadila Healthcare (down 1.29%) declined.

Stocks in Spotlight:

CEAT fell 1.32% to Rs 900.95. The company said its board will meet on 25 September 2020 to consider raising funds through issuance of non-convertible debentures on private placement basis.

Bombay Burmah Trading Corporation (BBTC) fell 2.83% to Rs 1314.55. BBTC announced that its board of directors will meet on 24 September 2020 to consider fund raising through issuance of non-convertible debentures (NCDs) of up to Rs 75 crore on private placement basis.

HSIL jumped 4.27% to Rs 74.45 after the company's board approved a proposal to buyback shares worth up to Rs 70 crore at a maximum buyback price of Rs 105 per equity share.

Aarti Drugs rose 2.57% to Rs 2916.25 after the company said its board has fixed 1 October 2020 as the record date to determine the eligible shareholders entitled to receive bonus shares. The company will issue three bonus equity shares for each share held (3:1).

Global Markets:

Most Asian shares declined on Tuesday as concerns over coronavirus induced lockdowns resurfaced. Shares of HSBC and Standard Chartered continued to see drops on Tuesday, following sharp declines on Monday on the back of reports that they allegedly moved large sums of suspicious funds.

European countries are likely to impose more restrictions on public life in the coming days. France reported 10,569 new cases Sunday while the U.K., reported almost 4,000 new cases. Italy saw close to 1,000 new infections and Germany reported 1,345 new cases Sunday, and a further 922 cases Monday.

The US stocks declined for fourth straight session on Monday, 21 September 2020, with the major averages finished deeply into negative territory, amid concerns over potential worsening of the coronavirus pandemic. Meanwhile, uncertainty on further U.S. fiscal stimulus and tensions between the U.S. and China nudged investors away from risk assets.

In addition to coronavirus news, the death of Supreme Court Justice Ruth Bader Ginsburg also appeared to be weighing on the markets as it is feared a fight over the nomination of her replacement could lead to further delays in the passage of another coronavirus relief bill. Republicans and Democrats have been in a stalemate since July after provisions from the previous stimulus bill expired.

Shares of banks and financials declined after a report found that a number of global banks moved allegedly illicit funds.

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