Indian share markets continued their momentum during closing hours of trading and ended their day on a positive note.
At the closing bell, the BSE Sensex stood higher by 646 points (up by 1.7%). Meanwhile, the NSE Nifty stood higher by 175 points (up by 1.6%).
Reliance Industries and BPCL were among the top gainers today.
Shares of Reliance Industries witnessed huge buying interest today to hit US$ 200 billion market cap, the first Indian company to achieve this milestone.
SGX Nifty was trading at 11,460, up by 154 points, at the time of writing.
The BSE Mid Cap index ended up by 0.9%. The BSE Small Cap index ended up by 1.3%.
Except for the telecom sector, all sectoral indices ended on a positive note with stocks in the energy sector and finance sector witnessing buying interest.
Asian stock markets closed on a mixed note today. As of the most recent closing prices, the Hang Seng was down 0.64% and the Shanghai Composite stood lower by 0.61%. The Nikkei ended up by 0.88%.
The rupee was trading at 73.43 against the US$ at the time of writing.
Gold prices were trading up by 0.2% at Rs 51,526 per 10 grams on MCX at the time of writing.
In news from the banking sector...
State Bank of India (SBI) share price was in focus today. The stock of the lender witnessed buying interest today after the lender said it raised Rs 40 billion via AT1 bonds.
In a regulatory filing on September 10, the public-sector lender said it has sold Rs 40 billion of the Basel compliant Additional Tier 1 (AT1) bonds at a coupon rate of 7.74%.
As the aggregate bids were in excess of Rs 60 billion, the bank exercised the full greenshoe option of Rs 30 billion over and above the base issue size of Rs 10 billion.
As per the BSE filing, this is the lowest pricing ever offered on such debt, issued by any bank since the country started implementing the stringent Basel ll capital rules in 2013.
SBI said it has an AAA credit rating from local credit agencies and its AT1 offering is rated AA+, which is the highest rating in the country for these instruments in view of the hybrid and high-risk nature of these instruments.
Moving on to news from the finance sector, the Supreme Court today asked the Central government to file a detailed affidavit on a batch of petitions seeking an extension of the moratorium period on repayment of loans and to waive off the interest on the repayment of the loan amount in view of the COVID-19 pandemic.
A three-judge bench of the apex court, headed by Justice Ashok Bhushan, asked the Centre to file a detailed affidavit and posted the matter for further hearing after two weeks.
Advocate Vishal Tiwari, one of the petitioners in the matter, submitted that his public interest litigation (PIL) has specific prayers regarding the extension of the moratorium and said that there should be a relief to the individual borrowers and service sectors, besides big manufacturing sectors. He also said that till further orders, the borrowers CIBIL score shall not be affected and no coercive action shall be taken against borrowers till further orders.
Solicitor General Tushar Mehta, appearing for the Ministry of Finance, submitted that they are having a lot of consultation with banks and other stakeholders for relief. He said that the consideration is taking place at the highest level and added that this is a subject matter of holistic consideration and that authorities are concerned about the borrowers.
Senior advocate Rajeev Dutta, appearing for a set of borrowers, told the apex court that the compound interest is still being charged in loan cases.
Senior lawyer Kapil Sibal, appearing for an association named CREDAI, submitted that the downgrading of borrowers is continuing, which must be protected now, and sought an extension of the loan moratorium and a stay on downgrading and interest levy.
Last week, Microfinance Institutions Network (MFIN), an industry association for the microfinance industry, said it has issued an advisory to its members on engaging with borrowers after the Reserve Bank of India (RBI) moratorium ended on August 31, 2020.
MFIN's CEO and Director Alok Misra said there could be borrowers who might be facing stress. All providers (of microcredit) agree that we must continue to show empathy with these borrowers and allow them time to get on their feet, even though credit discipline is important.
Note that the RBI, in March, had announced a moratorium on repayment of term loans in order to provide relief to borrowers impacted by the COVID-19 related disruptions. Initially, the moratorium was allowed till May 31 but was later extended till August 31.
How the above decisions are acted upon remains to be seen. Meanwhile, we will keep you update don all the developments form this space.
Speaking of the finance sector, note that the market crash impacted all stocks, but finance stocks took the worst hit.
Even as the Sensex has made a comeback to pre-COVID levels, the slowdown and asset quality concerns amid the moratorium extension is an overhang on the financial sector.
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