Market Update: Indices continued their fall, IT & Pharma hold the mkt

Markets at a Glance:

Indian Markets remained weak on 2^nd day with Nifty contracting by 97 points, while Sensex plunging by 300 points. All sectoral indices were in red, except pharma and IT. Midcaps and smallcaps underperformed as compared to benchmark indices by falling nearly 2%.

Top Gainers/Losers:

HCL Tech kept its dream run along with TCS, Sun Pharma, Tech Mahindra and Grasim Industries. On the other hand, Zee Entertainment Enterprises, Adani Ports, Bharti Infratel, GAIL and Maruti Suzuki took the most beatings.

DII/FII Data:

DII seems to have changed their strategy and become net buyers by investing Rs.878.91 crore, while FII followed the broader market trend of sell-off by divesting Rs.2072.76 crore, as per NSE website.

SEBI is planning to amend the rules to improve liquidity in Debt MFs:

Ajay Tyagi, SEBI Chairman, said today that SEBI will issue guidelines for open ended debt mutual funds related to minimum percentage of liquid asset holding, so that sudden redemption requests could be properly handled.

Overnight funds primarily invest in liquid assets, while there is 20% minimum liquid asset investment mandate for liquid funds. But there is no such mandate for other debt schemes. By keeping in mind the recent saga of Franklin Templeton’s debt MF scheme liquidity crunch, SEBI is setting up an expert committee to frame a stress testing methodology for all open ended debt mutual fund schemes by determining minimum liquid asset allocation percentage.

Mr. Tyagi also reaffirmed the decision taken for Muti-cap MF schemes saying that Multi-cap scheme should be true to its label.

Tata Sons make an offer to buy out Shapoorji Pallonji’s stake in itself:

After Supreme Court barred Shapoorji Pallonji group to raise money by pledging Tata Sons shares, Tata Sons itself made an offer to buy out entire 18% stake held by SP group to resolve SP’s debt problems.

Tata Group objected SP’s way of raising funds by pledging their Tata Sons shares and got a Supreme Court’s order to prohibit any such pledging till October 28.

SEBI puts a framework in place to avoid near zero/negative prices in commodity futures:

In order to not repeat the negative oil price saga happened in U.S., SEBI came out with an alternative risk management framework to handle a scenario of near zero and negative prices in commodity futures. It has constituted a task force of market participants and clearing corporations to design the risk management framework.

IT Services Industry has stabilised, says Rishad Premji

Speaking at an All India Management Association (AIMA) event, Mr. Premji said Indian IT services industry struggled during the April-June quarter because customers had cut spending on technology early on during the COVID-19 crisis. Since then, the industry has stabilised with customers coming back looking for help in shifting to the digital model.

He further said the digital-delivery model had opened up tremendous opportunities for the Indian IT sector, especially in the area of talent sourcing. During the recent market fall, only IT stocks managed to hold their positions.

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