BQuick On Aug. 20: Top 10 Stories In Under 10 Minutes

This is a roundup of the day’s top stories in brief.

1. Nifty 50: What’s In, What’s Out

The National Stock Exchange has announced changes to constituents of indices in its semi-annual rejig. The changes will be effective from Sept. 25, 2020.

• Bharti Infratel Ltd. and Zee Entertainment Enterprises Ltd. have been dropped from the benchmark Nifty 50.
• The two will be replaced by Divi's Laboratories Ltd. and SBI Life Insurance Company Ltd.
• NSE has also revised the criteria for selection of companies for the Nifty 500, Nifty 100 and Nifty Midcap 150 indices.

More details here.

2. Exclusive: SBI Plans Relief For Retail Borrowers

State Bank of India is finalising its plan to offer restructuring relief to retail borrowers, after the banking regulator permitted lenders to do so. The restructuring plan will be designed strictly for retail or individual borrowers directly affected by Covid-19, two senior officials at the bank said while speaking on conditions of anonymity.

• Given the large number of retail borrowers that SBI services, the lender will not be able customise the restructuring relief as it might in the case of large corporate borrowers.
• Instead a set of basic rules will be laid down and branch level staff will be empowered to take decisions on accounts that can be restructured, the officials cited earlier said.
• The rules will likely be placed before the bank’s board for approval next week, they added.

Here’s what the relief plan may look like.

3. Why MPC Kept Interest Rates Unchanged

India’s six-member Monetary Policy Committee felt the constraints of its inflation target as it met for the last time in its four-year tenure.

• Minutes of the MPC meet released on Thursday showed that committee members grappled with striking a balance between inflation, which is running higher than its mandate, and growth, which has collapsed as a result of the Covid-19 outbreak.
• The committee kept the benchmark repo rate unchanged at 4% when it announced its decision on Aug. 6.
• While committee members saw some more space for monetary policy support, the elevated inflation readings pushed them to vote for a status quo with an accommodative stance.

Read more to see why the committee remained wary of stagflation and a looming recession.

4. Traffic Jams Are Back!

Traffic snarls, common across India’s metropolitan cities, gave way to deserted roads as the Covid-19 pandemic forced the country into lockdown and citizens into their homes. Even as nationwide restrictions have been gradually lifted, the continued rise in the number of infections has meant that activity levels have remained well below normal.

• In recent weeks though, some indicators of traffic congestion and mobility, have some shown a pick-up suggesting increased activity across metros.
• The TomTom Traffic Index, which measures the additional travel time spent in traffic, has risen across most cities in the last two weeks.
• However, Not all indicators have improved. Community mobility reports by Google, continue to show sluggish activity in a number of segments.

Find out how urban traffic has increased across major Indian cities.

5. Nifty Snaps Three-Day Streak, U.S. Stocks Bounce Back

India’s benchmark indices ended lower after gaining for three-straight days on the back of weak global cues and a stronger U.S. Dollar.

• The S&P BSE Sensex ended 1% lower at 38,220 while the NSE Nifty 50 index managed to hold the mark of 11,300, ending 0.84% lower at 11,312.
• NTPC ended as the top gainer on the Nifty 50 index, with gains of 7%, while Tata Motors was the top laggard, ending 2.6% lower. ICICI Bank, Axis Bank and HDFC were the other major laggards.
• Midcaps and Smallcaps were the outperformers in today's session. The midcap index ended 0.8% higher while the smallcap index ended with gains of 0.66%.
• The Nifty Bank ended as the top laggard with cuts of 1.3%. Other sectoral laggards included the FMCG, I.T. and auto index which fell close to 0.5% each.

Follow the day’s trading action here.

Globally, 22.4 million people have been infected by the virus while the death toll stood at 7,88,000.

• Covid-19 continued to spread in Europe, where Germany recorded more than 1,000 new cases for a third consecutive day.
• Spain reported its highest number of daily infections since April.
• French President Emmanuel Macron ruled out another nationwide lockdown, saying the country will rely on local strategies to curb a resurgence of the virus.

Follow the global spread of the virus here.