Sensex Ends 335 Points Lower; Telecom And Oil & Gas Stocks Witness Selling

Indian share markets witnessed selling pressure during closing hours today and ended deep in the red.

Benchmark indices erased early gains and turned volatile in the afternoon session, dragged down by financial and telecom stocks.

At the closing bell, the BSE Sensex stood lower by 335 points (down 0.9%). The NSE Nifty closed lower by 101 points (down 0.9%).

The SGX Nifty was trading at 11,099, down by 123 points at the time of writing.

Midcap and smallcap stocks were under pressure today. The BSE Mid Cap index ended down by 0.4%. The BSE Small Cap index ended down by 0.5%.

On the sectoral front, losses were largely seen in the telecom sector and the oil & gas sector.

Asian markets ended on a mixed note. As of the most recent closing prices, the Hang Seng ended down by 0.7% and the Shanghai Composite stood lower by 0.2%. The Nikkei ended down by 0.3%.

The rupee was trading at 74.84 against the US$.

Moving on, BPCL was among the top buzzing stocks today. Shares of the company slipped over 8% today after the government for the third time extended the deadline for bidding for the privatization of India's second-biggest oil refiner by two months to September 30.

In the past two weeks, shares of BPCL had rallied around 23% on reports that global oil giants are showing interest in the company.

In news from the finance sector, mortgage lender HDFC today reported a 5% drop in net profit at Rs 30.5 billion for the quarter ended 30 June 2020. The profit stood at Rs 32 billion in the year-ago period.

Net interest income (NII) stood at Rs 33.9 billion as compared to Rs 30.8 billion in the previous year, representing a growth of 10%.

The net interest margin (NIM) was reported at 3.1%, compared to 3.3% in the corresponding quarter last year.

During the quarter, the company made Covid-19 provisions of 11.2 billion. Revenue rose 0.2% at Rs 130.2 billion.

The average size of individual loans stood at Rs 24.6 lakh, as against average loans of Rs 27 lakh in the year-ago period. The company said lower average loans was largely on account of the fact that major tier-1 cities were under lockdown.

HDFC's Board approved to raise funds up to Rs 450 billion through the issuance of secured redeemable, non-convertible debentures on private placement basis.

HDFC share price ended the day down by 3.6%.

Moving on to news from the commodity space, domestic gold prices edged lower today, their first loss in 10 days. On MCX, August gold futures were down 0.5% to Rs 52,990 per 10 gram.

In the past nine days, the precious metal has soared about Rs 5,500 per 10 gram or about 11%, tracking a global rally.

Tracking gold, Silver futures on MCX plunged over 2% to Rs 63,909 per kg.

In the previous session, gold had risen 1.4% or Rs 730 per 10 gram, hitting a new high of Rs 53,399 during the session.

In global markets, gold took a breather after a nine-day rally that pushed prices to new highs. On Tuesday, prices hit an all-time high of US$ 1,981.

Gold prices remained supported after US Federal Reserve left interest rates unchanged near zero and pledged to use all its tools to drive economic recovery.

The Fed policymakers repeated its intention to hold rates near zero "until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals".

In other news, the demand for gold jewelry in India tanked a massive 74% in the April-June quarter of the calendar year 2020 at 44 tonnes (t) and sharply higher than the 33% drop seen in China at 90.9 t during the same period, suggests the latest gold demand trends report by World Gold Council (WGC) released July 30.

The fall in demand in both India and China - the biggest gold consumers in the world, led to an overall 53% drop in the global demand for gold jewelry at 251.5 t during the recently concluded quarter.

Global jewelry demand almost halved in the first half of the calendar year 2020 (CY20), falling 46% YoY to a new low in their series at 572 t.

The strict lockdown imposed in late March eclipsed the gold-buying festival of Akshaya Tritiya - one of the most auspicious days for buying gold in India. As a result, physical store sales were not possible, and only those retailers with an online presence were able to cater to demand.

The uncertainty over the pandemic and its impact on the other asset classes saw investors rush to gold as a safe-haven asset. According to WGC, global investors added record amounts of gold-backed ETFs to their portfolios in the first half of 2020.

Speaking of the precious yellow metal, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...