Benchmarks add strength in morning session

Indian equity benchmarks added strength and continued their firm trade in the morning session, in line with Asian peers, on optimism over vaccine trials and more stimulus from the governments. Sentiments remained up-beat with Former Reserve Bank Governor D Subbarao’s statement that the government needs to build on some silver linings in the farm sector, driven by the prospect of a favourable monsoon, to speed up the economic recovery. Adding optimism among the investors, the Finance Ministry said as many as 9.37 crore Mudra Shishu loan account holders will benefit from 2 percent interest subvention scheme approved by the government as part of the Rs 20 lakh crore Aatmanirbhar Bharat Abhiyan package. Under the Shishu category, lenders provide collateral-free loans of up to Rs 50,000. On the sectoral front, select auto stocks were trading in red as auto industry body SIAM President Rajan Wadhera said he does not see any case for investment in the auto sector at present, with the automobile industry growing through the longest sales slump, made worse by coronavirus pandemic.

On the global front, Asian markets were trading mostly in green, following the positive cues from Wall Street and on optimism about a potential coronavirus vaccine. Moderna Inc's experimental vaccine for Covid-19 showed it was safe and provoked immune responses in all 45 healthy volunteers in an ongoing early-stage study. Back home, the BSE Sensex is currently trading at 36573.04, up by 539.98 points or 1.50% after trading in a range of 36297.65 and 36581.50. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.94%, while Small cap index was up by 1.13%.

The top gaining sectoral indices on the BSE were IT up by 4.43%, TECK up by 3.30%, Bankex up by 1.61%, Metal up by 1.57% and Energy up by 1.16%, while Telecom down by 1.10% was the lone losing index on BSE.

The top gainers on the Sensex were Tech Mahindra up by 4.97%, HCL Technologies up by 4.57%, Infosys up by 4.54%, Axis Bank up by 3.97% and Indusind Bank up by 2.58%. On the flip side, Bharti Airtel down by 1.51% and Mahindra & Mahindra down by 0.17% were the top losers.

Meanwhile, in order to speed up the economic recovery, former Reserve Bank of India Governor D Subbarao has said the government needs to build on some silver linings in the farm sector, driven by the prospect of a favourable monsoon. He said the rural economy is doing slightly better than the urban economy which is still grappling with COVID-19. Rural economy, which accounts for 65 per cent of population and 25 per cent of GDP, is actually proven to be a buffer because of expanded MGNREGA spending.

Further, he stated that spending’s under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) and procurement of agri produce by the Food corporation of India (FCI) have put money in the hands of farmers. Besides, he said, favourable monsoon augurs very well for the agriculture sector. As part of the reform process for the farm sector, the government amended the six-and-a-half-decade-old Essential Commodities Act to deregulate food items, including cereals, edible oil, oilseeds, pulses, onion and potato.

The amendment, besides deregulating production and sale of food products, will provide for no stock limit to be imposed on any produce. Last month, the government approved an ordinance to allow barrier-free trade in agriculture produce outside the notified Agriculture Produce Marketing Committees (APMC) mandis. Besides, any conflicts arising from the transactions will be dealt with exclusively by the Sub Division Magistrate (SDM) and District Collectorate within 30 days and not in the jurisdiction of civil courts.

The CNX Nifty is currently trading at 10755.80, up by 148.45 points or 1.40% after trading in a range of 10683.45 and 10765.80. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Wipro up by 16.80%, Infosys up by 4.93%, Tech Mahindra up by 4.85%, HCL Tech. up by 4.55% and Axis Bank up by 3.87%. On the flip side, Bharti Airtel down by 1.61%, Indian Oil Corporation down by 1.27%, Shree Cement down by 0.75%, UPL down by 0.56% and GAIL India down by 0.45% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 327.71 points or 1.45% to 22,914.72, Straits Times advanced 26.48 points or 1.01% to 2,646.67, KOSPI rose 16.67 points or 0.76% to 2,200.28 and Jakarta Composite soared 5.96 points or 0.12% to 5,085.08.

On the flip side, Taiwan Weighted dropped 18.42 points or 0.15% to 12,190.59, Shanghai Composite declined 47.41 points or 1.39% to 3,367.21 and Hang Seng decreased 140.55 points or 0.55% to 25,337.34.