The strength in the Indian market continues, ignoring the rising COVID cases. In the latest episode of Chinese tussle, India has now decided to take the battle head-on, using trade as a weapon. While all this is happening, Indian bankers have surely heaved a sigh of relief with a declining number of borrowers opting for the moratorium.
Indian market remained strong. By the time of closing though, the market slipped with resistance around 10,300 once again coming to play. Fundamentals are still not in favour of the rally as fresh COVID cases continue to rise. In China, the wet markets in Beijing are re-emerging as fresh hotspots. There has been an uptick in cases in the United States as well.
Hit where it hurts the most:
Amid the heightened tensions between India and China, the Maharashtra government has put three major agreements worth Rs 5,000 crore on hold with Chinese companies.
The Centre has also stepped up efforts to reduce the country’s dependence on China. The government has asked the industry to prepare a detailed list of all purchases from China to identify non-essential imports that can be substituted with local products.
Bankers are now a relaxed bunch:
In a major relief to the bankers, a fewer number of borrowers are now opting for a moratorium. Senior bankers have indicated that the total loan book under moratorium in June has declined from the 25–30% levels seen last month.
According to these bankers, many borrowers opted blindly for the moratorium. Almost 50% of customers opted for a moratorium just to conserve cash. They were not aware of the regular interest being charged during the period.
Another reason for the decrease in moratorium is that white-collar jobs have not been lost as much as it was feared. Although Bankers are seeing challenges persisting in metro housing markets, real-estate activity in non-metros is picking up.
Key Takeaways:
Despite the strong closing, the market fumbled and struggled at the current level. In the coming days, levels around 10,300 will be keenly contested by the bulls and the bears. The banking industry is seeing a fewer number of borrowers opting for a moratorium as more number of borrowers are now realizing that moratorium doesn't come without cost.
On the battlefront with China, India has decided to use trade as a weapon. The Maharashtra government's decision to cancel deals in a catalyst in a sense. In the coming days, the possibility of other states adopting similar measures could not be ruled out.
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