After a day of choppy trading yesterday, the benchmark indices have opened this morning on a flat note.
The global economic scene continues to be uncertain as virus cases surge adding to fears of a second pandemic wave.
Join us as we follow the top business news through the day.
Oil mixed after dropping on demand concerns post-U.S. holiday
Demand concerns continue to persist and keep in check any rally in oil prices.
Reuters reports: "Oil prices were mixed in early trade on Tuesday on looming demand worries about a possible rise in COVID-19 cases following the U.S. Labor Day long weekend, which also marks the end of the peak U.S. driving season.
Coronavirus cases rose in 22 of the 50 U.S. states, a Reuters analysis showed, on the holiday weekend traditionally filled with gatherings to mark the end of summer. At the same time cases are flaring up in India and Britain.
U.S. West Texas Intermediate (WTI) crude futures fell 64 cents, or 1.6%, to $39.13 per barrel at 0221 GMT, playing catch-up with a drop in Brent prices overnight.
Brent crude futures inched up 6 cents, or 0.1%, to $42.07 a barrel, after falling 1.5% on Monday.
Brent dropped on Monday after Saudi Arabia's Aramco, the world's top oil exporter, cut the October official selling prices for its Arab light crude, seen as a sign demand growth may be stuttering as COVID-19 cases flare up around the world.
“The combination of coming out of summer peak driving season in the U.S., which is a seasonal factor, has refocused the market's attention on whether the demand recovery is strong enough - and clearly there are some doubts, as Aramco's price move has demonstrated,” said Lachlan Shaw, National Australia Bank's head of commodity research.
Also weighing on the market is the upcoming maintenance seasons for U.S. refineries, which could cut crude demand by 1.5 million to 2 million barrels per day, he said.
WTI and Brent have dropped out of the ranges they were in throughout August, with WTI now below $40 after having traded around $42 for most of the month. Brent has dropped from around $45. The market had been helped by a weaker U.S. dollar, which has since rebounded slightly.
“This follows on from worrying signs of a resurgence in COVID-19 cases in other parts of the world. This has raised concerns that the recent recovery in demand may be halted as the general public remains cautious about extended travel,” ANZ Research said."
Market opens on choppy note amid mixed global cues
After yesterday's flat close, stocks have once again opened the day on a flat note.
PTI reports: "Domestic equity benchmark Sensex dropped over 85 points in early trade on Tuesday amid lack of directional cues from global markets.
The 30-share BSE index opened on a choppy note and was trading 2.15 points or 0.01 per cent lower at 38,415.08; while the NSE Nifty slipped 6.80 points or 0.06 per cent to 11,348.25.
PowerGrid was the top loser in the Sensex pack, shedding around 1 per cent, followed by NTPC, Nestle India, ONGC, L&T, HDFC and M&M.
On the other hand, Reliance Industries, Sun Pharma, Infosys, Axis Bank and ICICI Bank were among the gainers.
In the previous session, Sensex settled 60.05 points or 0.16 per cent higher at 38,417.23, while Nifty advanced 21.20 points or 0.19 per cent to close at 11,355.05.
Exchange data showed that foreign institutional investors sold equities worth Rs 6.93 crore on a net basis on Monday.
Domestic equities opened on a choppy note tracking mixed cues from global equities, traders said.
Bourses in Shanghai and Hong Kong were trading with losses in mid-session deals, while Seoul and Tokyo were positive.
Stock exchanges on Wall Street ended on a negative note in overnight session.
Global oil benchmark Brent crude was trading 0.14 per cent lower at USD 41.95 per barrel."
Curbs on current account affecting MFIs: Sa-dhan
The revised guidelines from the RBI pertaining to current accounts will lead to numerous difficulties and operational issues for the microfinance sector, industry body Sa-Dhan, said in a letter to RBI Governor Shaktikanta Das.
Sa-dhan demanded that microfinance institutions be exempted from the restrictions on the opening and operation of current accounts. In the recent circular, RBI instructed banks not to open current accounts for customers who had availed credit facilities in the form of cash credit (CC)/ overdraft (OD) from the banking system and said all transactions shall be routed through the CC/OD account.
“In the current scenario, when borrowers require urgent credit to restart their lives, implementation of the revised guidelines will result in numerous difficulties and operational issues for the microfinance sector,” P. Satish, executive director – Sa-Dhan, said.