Share markets in India are presently trading on a negative note, dragged down by banking and finance stocks.
A weak trend in Asian peers also weighed on the sentiment amid ongoing US-China trade war.
In early trade today, the BSE Sensex rose as much as 145 points. Presently, the BSE Sensex is trading down by 151 points, at 37,950 levels.
Meanwhile, the NSE Nifty is trading down by 54 points.
The BSE Mid Cap index is trading down by 0.8%. The BSE Small Cap index is trading down by 0.7%.
On the sectoral front, banking stocks are witnessing most of the selling pressure.
The rupee is trading at 74.76 against the US$.
Moving on, Persistent Systems is among the top buzzing stocks today.
Shares of the company surged as much as 18% to hit a 52-week high of Rs 915 on the BSE after the company reported a strong set of numbers for the quarter ended June 2020 (Q1FY20).
For the quarter under review, Persistent Systems posted a profit before tax (PBT) of Rs 1,220 million, up 11% against Rs 1,097 million in the corresponding quarter of the previous fiscal.
Profit after tax (PAT) or net profit came in at Rs 900 million, up 9% against Rs 824.7 million in the year-ago period.
In news from the banking sector, shares of Yes Bank are locked in 10% lower circuit at Rs 12.30 on the BSE after the listing of fresh shares allotted in the follow-on public offer (FPO).
"12,504 million equity shares of YES Bank are listed and admitted for trading on the exchange with effect from July 27, 2020. These shares rank pari-passu with the existing equity shares of the company," said the BSE in its release.
In other news, banking and finance stocks are under pressure today. Gross non-performing assets of scheduled commercial banks can spike to 14.7% of the total loans by March 2021 in a worse scenario, the Reserve Bank of India (RBI) said in the Financial Stability Report on July 24.
In a base case scenario, the GNPAs could rise to 12.5% by March next year, the RBI said.
"The regulatory dispensations that the pandemic has necessitated in terms of the moratorium on loan installments and deferment of interest payments may have implications for the financial health of SCBs, going forward," the RBI added.
"The financial system in India remains sound; nonetheless, in the current environment, the need for financial intermediaries to proactively augment capital and improve their resilience has acquired top priority," RBI Governor Shaktikanta Das wrote in the foreword of the report.
Going forward, Das said that once we enter the post-pandemic phase, the focus would be on the calibrated unwinding of regulatory and other dispensations.
He asked financial intermediaries to undertake a reappraisal of their business models. The governor said that asset markets have to adapt to a new normal in a non-disruptive manner.
Note that, Das's comments come at a time when the credit growth has declined as the coronavirus pandemic and the subsequent lockdowns have severely hit the businesses and left lakhs of people jobless.
How the above developments pan out remains to be seen. Stay tuned for more updates from this space.
Moving on to news from the commodity space, domestic gold prices surged to a fresh record high today, tracking the trend in the international market amid tensions between the United States and China and growing worries over economic conditions.
On MCX, August gold futures rose 1.6% to a record high of Rs 51,926 per 10 gram, tracking a global rally.
Silver prices also rallied today. Silver futures on MCX gained 5.5% or Rs 3,400 to Rs 64,617 per kg.
Domestic gold prices are off to a strong start this week after posting strong gains in the previous week. In the previous week, gold prices had surged 4% while silver had jumped 15%.
In global markets, gold prices hit a record high today as US-China tensions, a weaker US dollar, and expectations of more stimulus pushed investors towards safe-haven assets like gold.
Spot gold was up 1.5% to US$ 1,928.40 per ounce, surpassing the previous high of US$ 1,920.30, hit in September 2011.
Top aides to US President Donald Trump said on Sunday they agreed in principle with Senate Republicans on a US$ 1 trillion coronavirus relief package.
Last week, European Union leaders had agreed on a massive stimulus of over US$ 850 billion.
Note that relations between the US and China have deteriorated in recent days in a Cold War-style standoff, with Beijing ordering the Chengdu mission to be shut in retaliation for the forced closure of Beijing's consulate in Houston, Texas.
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...
As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.
So, is this the right time to buy gold or silver? And how can one go about investing in this precious metal?
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