Sensex, Nifty extend gains in late afternoon deals

Indian equity bourses extended their gains in late afternoon session, on the back of gains led by Auto, Metal and Banking stocks.  Traders were getting comfort, with Commerce and Industry Minister Piyush Goyal’s statement that the recent economic slowdown is a cyclic structural adjustment, and it is the right time to invest in India before growth bounces back. The street also took a note of the Finance Ministry’s statement that loans worth Rs 81,781 crore were disbursed during the nine-day outreach programme or loan mela organized by banks that began on October 1.

On the global front, European markets were trading mixed, as the UK unemployment increased and employment declined in three months to August. The data from the Office for National Statistics showed that the number of people in work fell 56,000 to 32.69 million and the level of unemployment increased by 22,000 to 1.31 million in three months to August. Asian markets were also trading mixed.

Back home, road & infrastructure Industry stocks were in watch, as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report revised the outlook for road sector to stable-to-negative from stable for the remainder of FY20, amid several factors like subdued funding climate, economic growth-led deceleration in traffic volumes and uncertainty on the bidding model.

The BSE Sensex is currently trading at 38589.91, up by 375.44 points or 0.98% after trading in a range of 38238.27 and 38635.19. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.63%, while Small cap index was down by 0.18%.

The top gaining sectoral indices on the BSE were Auto up by 2.31%, Metal up by 2.17%, Bankex up by 1.56%, FMCG up by 1.28% and Consumer Disc up by 1.21%, while Telecom down by 2.05%, TECK down by 0.60% and IT down by 0.46% were the only losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 3.96%, Hero MotoCorp up by 2.75%, Maruti Suzuki up by 2.57%, Mahindra & Mahindra up by 2.52% and Hindustan Unilever up by 2.50%. On the flip side, Bharti Airtel down by 2.80%, Infosys down by 2.10%, Tata Motors down by 0.59% and Tata Motors - DVR down by 0.18% were the top losers.

Meanwhile, amid several factors like subdued funding climate, economic growth-led deceleration in traffic volumes and uncertainty on the bidding model, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has revised the outlook for road sector to stable-to-negative from stable for the remainder of FY20.

The rating agency also underlined that the weakening of financing sentiments and a sharp rise in land acquisition costs exert stress on the central budget and could compel the government to rethink the bidding model. Besides, it also made an outlook revision on toll road projects to Stable-to-Negative from Stable for the remainder of FY20, on the back of heightened risk in prediction of traffic growth due to deceleration in economic growth.

However, Ind-Ra maintained stable outlook for annuity-based and hybrid annuity model (HAM) projects for the remaining FY20. The rating agency is expecting that timely and steady annuities support annuity projects, however, increased tax obligations due to the application of Indian Accounting Standards created ambiguity in exact assessment of cash flow for certain projects, impacting debt service coverage ratio.

The CNX Nifty is currently trading at 11441.85, up by 100.70 points or 0.89% after trading in a range of 11342.10 and 11462.35. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 4.08%, Vedanta up by 3.99%, Zee Entertainment up by 3.44%, Hindalco up by 2.94% and Hero MotoCorp up by 2.75%. On the flip side, Bharti Airtel down by 2.68%, Infosys down by 2.16%, Tata Motors down by 0.74%, Nestle down by 0.52% and UPL down by 0.37% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 408.34 points or 1.87% to 22,207.21, Taiwan Weighted strengthened 44.85 points or 0.41% to 11,111.80, Jakarta Composite soared 5.07 points or 0.08% to 6,131.95 and KOSPI rose 0.77 points or 0.04% to 2,068.17. On the flip side, Straits Times trembled 5.04 points or 0.16% to 3,119.41, Shanghai Composite declined 17.12 points or 0.57% to 2,990.76 and Hang Seng decreased 27.09 points or 0.1% to 26,494.76.

European markets were trading mixed; FTSE lost 20.34 points or 0.28% to 7,193.11, while CAC gained 17.24 points or 0.31% to 5,660.32 and DAX was up by 48.81 points or 0.39% to 12,535.37.