The benchmark stock indices have made a poor start to the week with a loss of close to 1% at open. Stocks had ended a 6-week winning streak last week.

Gold prices continue to be in focus as investors remain worried about increasing economic uncertainties.

Join us as we follow the top business news through the day.

Rupee vs EM currency index

Sensex tanks 667 points; Nifty ends below 10,900

Stocks are witnessing considerable resistance after a 6-week bull run that ended last week.

PTI reports: "Slumping for the fourth straight session, equity benchmark Sensex plunged 667 points on Monday following a selloff in index-heavyweights Reliance Industries, HDFC twins and Kotak Bank as soaring COVID-19 cases kept investors jittery.

The rupee too sank 20 paise and settled below the 75 per US dollar mark.

The BSE Sensex ended 667.29 points or 1.77 per cent lower at 36,939.60, while the NSE Nifty tumbled 181.85 points or 1.64 per cent to 10,891.60.

Kotak Bank was the top loser in the Sensex pack, falling over 4 per cent, followed by IndusInd Bank, Axis Bank, ONGC, HDFC Bank, Bajaj Auto and Reliance Industries (RIL).

On the other hand, Titan, Tata Steel, HCL Tech, L&T and SBI were among the gainers.

According to traders, massive selling in index majors RIL and HDFC duo dragged the key indices lower.

Further, foreign fund outflows and concerns over rise in COVID-19 cases across the world kept investors on edge, they added.

The number of cases around the world linked to COVID-19 has crossed 1.8 crore, while the infection count in India has crossed 18 lakh.

Globally, however, bourses in Shanghai, Tokyo, Seoul settled on a positive note, while Hong Kong ended in the red.

Stock exchanges in Europe were also trading on a positive note in early deals.

Global oil benchmark Brent crude was trading 0.69 per cent lower at USD 43.22 per barrel."

Bank accounts opened under Jan Dhan Yojana crosses 40-crore mark

More than 40 crore bank accounts have been opened under the government’s flagship financial inclusion drive Pradhan Mantri Jan Dhan Yojana (PMJDY), launched about six years ago by the Modi-government.

As per the latest figure, there are 40.05 crore beneficiaries of this scheme and deposits in Jan Dhan bank accounts are in excess of ₹1.30 lakh crore.

“Another milestone achieved under world’s largest financial inclusion initiative, PMJDY: Total accounts opened under the scheme crosses 40 Cr. mark. Committed to take financial inclusion to the last mile!,” Department of Financial Services said in a tweet.

Rupee slips below 75/USD mark; settles 20 paise down against US dollar

The fall in domestic stocks hasn't spared the rupee.

PTI reports: "The rupee plunged 20 paise and settled below the 75 per US dollar level on Monday tracking negative domestic equities and strengthening American currency.

The rupee opened on a weak note at 74.91 at the interbank forex market, and closed for the day at 75.01 (provisional) against the US dollar, registering a decline of 20 paise over its previous close of 74.81 against the greenback.

During the session, the local unit witnessed an intra-day high of 74.88 and a low of 75.03 against US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.11 per cent to 93.45.

Forex traders said foreign fund outflow, strong dollar, muted domestic equities and rising COVID-19 cases dragged the local unit down.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 583.75 points lower at 37,023.14 and broader NSE Nifty fell 161.65 points to 10,911.80.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 958.64 crore on Friday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 0.64 per cent to USD 43.24 per barrel.

Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.80 crore and in India, the number of infections has topped 18-lakh mark."

RBI likely to cut rates despite inflation risk

Reviving growth by boosting demand could take precedence over the inflation target.

Reuters reports: "India's worsening economic outlook as coronavirus cases soar has raised the chance the central bank will cut interest rates at its policy review on Thursday, in spite of inflationary pressures.

Around two-thirds of economists in a Reuters poll expect the Reserve Bank of India (RBI) to cut the repo rate by another 25 basis points (bps) on Aug. 6 to a record low of 3.50%, and once more next quarter.

“High inflation has added confusion to the Reserve Bank's policy outlook, but given the state of aggregate demand, we forecast the RBI will continue easing,” said Rahul Bajoria, economist at Barclays who expects a 25-bp cut.

Annual retail inflation rose in June to 6.09% from 5.84% in March, remaining above the RBI's medium-term target range of 2%-6%.

The RBI's recent policies have focused on financial stability and the need to support growth despite the price target.

The country was placed under one of the strictest lockdowns in the world in late March for over two months to halt the spread of the coronavirus. The government gradually eased restrictions in June although infections continue to rise.

The poll showed most analysts expect the economy to contract 20% in the June quarter versus the April forecast of a 5.2% fall and remain in negative terrain until the December quarter.

For the full year 2020/21, the economy is likely to shrink 5.1%, which would be its weakest performance since 1979, a sharp contrast to the 1.5% expansion forecast in April.

Apart from rate cuts, Upasna Bharadwaj, economist at Kotak Mahindra Bank, expects liquidity and regulatory measures from the RBI to address demand shocks and financial market dislocations.

“RBI may look to widen the policy corridor to 75 bps by easing reverse repo by a higher quantum,” she said, adding that though they expect a 25-bp rate cut, it may not be effective in the current environment.

The RBI has already reduced the repo rate by a total of 115 basis points since February, on top of the 135 basis points in an easing cycle last year, from 6.50%, responding to slowing growth.

Some economists, however, feel it may be prudent for the RBI to pause in August before resuming its rate-cutting cycle once inflation has stabilised.

Weakness in growth versus above-target inflation, improving indicators and concerns over inflation expectations will put the RBI in a tough spot, said DBS economist Radhika Rao.

“It will be a close call, but we see slightly higher odds for a pause.”"

Oil falls on fears of glut as OPEC+ set to boost output

The recovery rally in oil is facing stiff resistance as suppliers boost output.

Reuters reports: "Oil prices fell on Monday on oversupply worries as OPEC and its allies are set to wind back output cuts in August and a rise in worldwide COVID-19 cases points to a slower pick-up in demand.

Brent crude futures slid 27 cents, or 0.6%, to $43.25 a barrel by 0642 GMT. U.S. West Texas Intermediate (WTI) crude futures were down 34 cents, or 0.8%, at $39.93.

Brent posted a fourth month of gains in July and U.S. crude posted a third as both rose from depths hit in April, when much of the world was in lockdown due to the coronavirus pandemic.

“Investors are worried about oversupply as OPEC+ is due to start reducing production cuts this month and a recovery in oil prices from record lows is likely to encourage U.S. shale producers to ramp up output,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

“Also, fears over a resurgence in the coronavirus cases are weighing on oil markets,” he said.

Oil output by the Organization of the Petroleum Exporting Countries rose by over 1 million barrels a day in July as Saudi Arabia and other Gulf members ended their voluntary extra supply curbs on top of an OPEC-led deal.

Russia's oil output in July was unchanged from June levels, the nation's Energy Ministry said on Sunday. OPEC+, a grouping of OPEC and allies including Russia, is set to step up output in August, adding about 1.5 million bpd to global supply.

U.S. energy firms kept the number of oil and natural gas rigs unchanged at a record low as the rig count fell for a fifth straight month, although July marked the smallest monthly decline of the five.

Oil prices are set for a slow crawl upwards this year as the gradual easing of coronavirus-led restrictions buoys demand, although a second COVID-19 wave could slow the pace of a recovery, a Reuters poll showed on Friday.

The Australian state of Victoria declared a “state of emergency” on Sunday, while authorities in the Philippines said they would impose fresh restrictions in Manila this week, reflecting global worries about getting the pandemic under control.

“Adding to matters is that the U.S. consumer market is entering the last few weeks of peak driving season and with mobility tracking data flatlining,” Stephen Innes, chief global market strategist at AxiCorp, said in a report.

“Unless there is a significant drop in the COVID-19 case count curve that is sufficient enough to reduce consumer fear ... and shift mobility data higher, demand might not get much better from here on in,” Innes said."

Iran’s stock market hits record high amid battered economy

The Tehran Stock Exchange closed at a record high on Sunday, crossing 2 million points for the first time, even as U.S. sanctions, unemployment, inflation and low oil prices batter the Iranian economy.

The exchange’s website showed it closed at 2,011,492 points, up some 50,000 points from Saturday. Government authorities also offered additional shares of state-owned companies onto the market on Sunday.

The Tehran Stock Exchange has seen sharp increases this year, even as Iran struggled with one of the first serious coronavirus outbreaks outside China.

Encouraged by a government eager to privatise state-owned firms, average people now have access to the market and can trade shares, earning returns they’d never see in a savings account or a certificate of deposit.

Italy's GDP worst in 27 years

Bajaj Auto sales drop 33% to 2,55,832 units in July

A one-third fall in Bajaj Auto's sales even as the economy is unlocked.

PTI reports: "Bajaj Auto on Monday reported 33 per cent fall in its total sales at 2,55,832 units in July 2020.

The company had sold 3,81,530 units in the same month a year ago.

Domestic sales in July this year were at 1,58,976 units as against 2,05,470 units, down 23 per cent, Bajaj Auto said in a regulatory filing.

Total motorcycle sales stood at 2,38,556 units, a decline of 26 per cent, as compared to 3,22,210 sold in July last year.

Total commercial vehicle sales were at 17,276 units as against 59,320 units in the same month last year, down 71 per cent, the company said.

Exports in July declined 45 per cent to 96,856 units as against 1,76,060 units in the corresponding month last year, it added."

Tata Motors shares jump over 8% after Q1 earnings

Some positive surprise from Tata Motors as results turn out to be not as bad as initially expected.

PTI reports: "Shares of Tata Motors on Monday jumped over 8 per cent after the company’s first quarter earnings were better than estimates.

The stock rose by 8.30 per cent to Rs 113.40 on the BSE.

On the NSE, it jumped 8.45 per cent to Rs 113.50.

The results were subdued, but better than estimates. Standalone Q1 EBITDA was also better than expected, Emkay Global Financial Services said.

“Tata Motors continues to outperform on balance sheet as well as cost control initiatives,” according to a report by Edelweiss Research.

The homegrown auto major on Friday reported a consolidated net loss of Rs 8,443.98 crore for the first quarter ended June 2020.

The company had posted a net loss of Rs 3,679.66 crore in the year-ago quarter.

Total income from operations during the period under review stood at Rs 31,983.06 crore as against Rs 61,466.99 crore in the corresponding quarter of the last fiscal.

The company’s British arm Jaguar Land Rover (JLR) reported a 44 per cent dip in net revenue at 2.9 billion pounds during the first quarter.

On a standalone basis, the company said its net loss for the quarter was at Rs 2,154.24 crore as against a net loss of Rs 147.45 crore in the year-ago period.

Standalone revenue from operations stood at Rs 2,634.14 crore as compared with Rs 13,250.19 crore in the April-June period of 2019-20.

The management remains focussed on making the company more agile to improve its market, operational and financial performance by reducing costs, generating free cash-flows and providing the best in class customer experience, the Tata Motors CEO said."

India’s manufacturing sector activity contracts for 4th straight month in July: PMI

The gradual unlocking of the economy isn't helping the manufacturing sector very much.

PTI reports: "India’s manufacturing sector activity contracted at a slightly faster pace in July as demand conditions remained subdued amid prolonged closures, following which firms reduced both staff numbers as well as purchasing activity, a monthly survey said on Monday.

The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) stood at 46 in July, down from 47.2 in June.

This is the fourth straight month of contraction for the Indian manufacturing sector.

In April, the index had slipped into contraction mode, after remaining in the growth territory for 32 consecutive months. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction.

“Latest PMI data from Indian manufacturers shed more light on the state of economic conditions in one of the countries worst affected by the COVID-19 pandemic, said Eliot Kerr, Economist at IHS Markit.

The survey results showed a re-acceleration of declines in the key indices of output and new orders, undermining the trend towards stabilisation seen over the past two months, Kerr said.

He further noted that “anecdotal evidence indicated that firms were struggling to obtain work, with some of their clients remaining in lockdown, suggesting that we won’t see a pick-up in activity until infection rates are quelled and restrictions can be further removed“.

As per the survey, output contracted at a slightly faster pace than in June as demand conditions remained subdued with some businesses still closed amid lockdown extensions.

Moreover, export orders also witnessed a decline. Survey participants commented that international clients were hesitant to place orders while the duration of the pandemic remained uncertain.

Deteriorating demand conditions led Indian manufacturers to continue cutting staff numbers during July.

On the cost front, manufacturers reported another decrease in input prices during July, the survey said adding that subdued demand for most goods more than offset the inflationary effects of shortages in some raw materials, the survey said.

However, despite the ongoing negative impact of COVID-19, sentiment towards future activity improved for the second month running, the survey said."

Coronavirus lockdown sparks bankruptcy crisis

Rupee slips 12 paise to 74.93 against U.S. dollar in early trade

The rupee depreciated 12 paise to 74.93 against the U.S. dollar in opening trade on August 3 tracking negative domestic equities and strengthening American currency.

The rupee opened on a weak note at 74.91 at the interbank forex market, then lost further ground and touched 74.93 against U.S. dollar, down 12 paise over its last close.

It had settled at 74.81 against the U.S. dollar on July 31.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.08% to 93.42.

Gold soars to record high as virus fears lift safe-haven demand

Safe haven demand among investors continues to push gold higher.

Reuters reports: "Gold prices surged to an all-time high on Monday as fears over an economic fallout from rising COVID-19 cases boosted demand for the safe-haven metal, although gains were capped by an uptick in the U.S. dollar.

Spot gold was steady at $1,973.94 per ounce by 0254 GMT, after hitting a record high of $1,984.66 in early Asian trade. U.S. gold futures rose 0.3% to $1,992.30.

“The sentiment across markets is deteriorating. First of all, rising infection rates are a real concern for the globe and a real support for gold prices. Given that, it is also driving U.S. dollar higher,” said Michael McCarthy, chief strategist at CMC Markets. Coronavirus cases continued to surge in the United States and stood at over 17.96 million globally.

Rising COVID-19 cases and simmering U.S.-China tensions have dented hopes for a swift economic recovery, driving inflows into safe-haven assets such as gold, which climbed 30% so far this year.

“Gold also saw safe-haven demand as the federal unemployment bonus expired on Friday, which would affect U.S. consumer income and spending and the U.S. Central Bank would thus remain dovish,” Phillip Futures analysts said in a note. U.S. lawmakers struggled to hammer out a new stimulus plan.

White House Chief of Staff Mark Meadows said on Sunday he was not optimistic on near-term deal for coronavirus relief bill. Limiting gold's advance, the dollar index rose 0.2% , having touched its lowest level since May 2018 in the last session.

A weaker dollar, also considered a rival safe haven, makes gold cheaper for holders of others currencies. China's factory activity expanded at the fastest pace in nearly a decade in July, a survey showed.

Speculators reduced their bullish positions in COMEX gold and silver contracts in the week to July 28. Elsewhere, silver eased 0.2% to $24.32 per ounce, platinum fell 0.9% to $899.04 and palladium dropped 1.1% to $2,068.29."

Gold shines again

Precious metals regained lustre with gold and silver recording handsome gains in July. The rising number of COVID-19 cases, along with the weakness in the U.S. dollar, was the driving force behind the surge in precious metal prices. Concerns around U.S.-China tensions too aided sentiment.

Comex gold gained 10.3% to settle at a high of $1,985.9 an ounce. This is the biggest monthly gain for Comex gold in the last 8 years. The price action in Comex silver was even more interesting, as it rose a whopping 30.6% in July to $24.2 an ounce. This was the biggest-ever monthly gain in silver.

Gold futures at MCX rose 9.5% in July to ₹53,544 per 10 gm. MCX silver futures closed 29% higher at ₹64,984 per kg in July. As observed last month, comex gold ruled firm and moved well past the target of $1,835-1,840. The recent uptrend in comex gold is likely to sustain in the short term. The price could head to the next target of $2,020-2,030 an ounce. A fall below $1,920 would invalidate the positive outlook for gold.

Shares fall as virus cases surge; banks slip

The fall in stock prices continues. Notably, the benchmark indices broke their 6-week winning streak last week.

Reuters reports: "Indian shares fell on Monday, led by a decline in banking stocks, as the number of domestic coronavirus cases leapt by a record over the weekend and high-profile politicians tested positive.

The NSE Nifty 50 index, which clocked a 7.5% gain last month, fell 0.64% to 11,002.65 by 0355 GMT, while the S&P BSE Sensex was 0.73% lower at 37,335.25.

The Nifty banking index fell 1.31%. The nation's top private sector lender, HDFC Bank Ltd, was the biggest drag on the Nifty 50, with a 1.6% decline.

India's tally of COVID-19 cases crossed 1.75 million on Sunday, after logging a record surge a day earlier, with the death toll at 37,364. The country has the world's third highest caseload after the United States and Brazil.

India's Home Minister Amit Shah, a close aide to Prime Minister Narendra Modi, tested positive for COVID-19 on Sunday, becoming the senior-most politician in the country to catch the virus.

The chief minister of the southern state of Karnataka, home to the tech hub of Bengaluru, also said https://twitter.com/BSYBJP/status/1289984447400407040 he tested positive for COVID-19.

Other Asian share markets were mixed on Monday as U.S. lawmakers struggled to hammer out a new stimulus plan."

AIIB in discussion with India for financing of ambitious USD 8-bn health infra scheme

The pandemic has brought India's dilapidated health infrastructure into focus.

PTI reports: "The Asian Infrastructure Investment Bank (AIIB), along with the World Bank and the Asian Development Bank, is in discussion with the Indian government for part-financing a USD 8-billion scheme for improving the health infrastructure at the district level to make the country better prepared for future healthcare challenges.

The Beijing-based multilateral funding agency had earlier approved a financial assistance of USD 1.2 billion for India to fight the COVID-19 pandemic.

“The Government of India has discussed about its ambitious scheme of strengthening the health infrastructure. It entails building health infrastructure in every district including upgrading of testing facilities with the Indian Council of Medical Research (ICMR),” AIIB Vice President D J Pandian told PTI in an interview.

It is a USD 8-billion project, he said, adding that the World Bank and the Asian Development Bank are also involved in the discussion with the Health Department of the Government of India.

The Finance Ministry is trying to put up a financing plan for this ambitious scheme and the minute details are being worked out, he said.

If things work out, the financing by the AIIB can be cleared this year itself on a fast-track basis, he added.

With regard to COVID-19 assistance, Pandian said the AIIB has approved two loans of USD 500 million and USD 750 million, respectively.

The first loan of USD 500 million sanctioned in May was towards building a resilient health system that can effectively treat COVID-19 patients and prevent its spread, he said

A USD 750 million loan was approved in June to help the government strengthen its battle against the adverse impact of COVID-19 on poor and vulnerable households.

For AIIB, India is the largest borrower, which accounts for 25 per cent of the total lending by it so far. As of July 16, 2020, AIIB has approved up to USD 19.6 billion for 87 projects in 24 economies. Since its inception in 2016, AIIB has approved loans to the tune of USD 4.3 billion across 17 projects in India.

India is a founding member of the multilateral funding agency with the second-highest voting share. Currently, India has a 7.65-per cent vote share in the AIIB, while China holds a whopping 26.63-per cent stake in the organisation that was set up in 2016."

Discoms’ outstanding dues to power gencos rise 47% to ₹ 1.33 lakh crore in June

Power producers’ total outstanding dues owed by distribution firms rose over 47% year-on-year to ₹ 1.33 lakh crore in June 2020, reflecting stress in the sector.

Distribution companies (discoms) owed a total of ₹ 90,655 crore to power generation firms in June 2019, according to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators).

The portal was launched in May 2018 to bring in transparency in power purchase transactions between the generators and discoms.

In June 2020, the total overdue amount, which was not cleared even after 60 days of grace period offered by generators, stood at ₹ 1,20,041 crore, as against ₹ 72,362 crore in the year-ago period.