Indices pare some of gains in afternoon session

Markets pared some initial gains and continued their trade in green in afternoon session amid buying in blue chip stocks from across various sectors. Both the benchmarks were trading above their crucial psychological marks of 36,600 (Sensex) and 10,750 (Nifty). Buying in IT, TECK and Energy stocks helped markets to trade higher. Sentiments remained optimistic with PM Narendra Modi’s statement that the India-EU summit will strengthen economic, cultural ties, jobs, trade, other issues on cards. On the back of the coronavirus-led economic crisis, the leaders in the India-EU summit will discuss global cooperation and solidarity to protect lives, in order to mitigate the socio-economic risks. The 15th summit between India and the European Union will be held today via video conference. However, traders remain concerned with India Ratings and Research’s (Ind-Ra) latest report stating that private sector’s capital expenditure (capex) is set to contract by 20-26 percent in the current financial year (FY21) due to COVID-19 pandemic-led business disruptions.

On the global front, Asian markets were trading mixed led by coronavirus vaccine hopes though sentiment was cautious after Beijing vowed retaliatory sanctions against the United States. Back on street, the market breadth on BSE was positive, out of 2563 stocks traded, 1393 stocks advanced, while 1019 stocks declined on the BSE, while 151 stocks remain unchanged.

The BSE Sensex is currently trading at 36628.24, up by 595.18 points or 1.65% after trading in a range of 36297.65 and 36810.25. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.64%, while Small cap index was up by 0.96%.

The top gaining sectoral indices on the BSE were IT up by 4.85%, TECK up by 3.63%, Energy up by 1.49%, Bankex up by 1.35% and Metal was up by 1.27%, while Telecom down by 0.95% and Realty was down by 0.69% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 6.11%, HCL Tech up by 4.39%, Axis Bank up by 4.03%, Tech Mahindra up by 3.31% and TCS was up by 2.68%. On the flip side, Bharti Airtel down by 1.34%, Nestle down by 0.84%, Asian Paints down by 0.38% and Kotak Mahindra Bank was down by 0.27% were the top losers.

Meanwhile, a part-time member of the Economic Advisory Council to the Prime Minister (EACPM), V Anantha Nageswaran has said that a policy of whittling away unwanted rules, restrictions and regulations will help provide a start for India to emulate China in becoming an exports powerhouse as local businesses are struggling with legislative and compliance burdens. He also said doing such a thing can help get government out of business and gives a medium term target for growth. However, he pitched for making a start towards the country a powerhouse of exports even though a shift to re-shoring amid a nationalistic wave in many markets may make exports difficult.

Nageswaran said ‘emulating China from where we are with the kind of high cost of production and the legislative and compliance burdens that our businesses carry, is not going to happen. That is why Vietnam, Mexico and Bangladesh are getting the industry moving out of China and not India. We are not there yet.’ For the domestic market, he said making goods for the 80 percent of the population depends on the cost at which the goods can be produced and underlined that the compliance burdens imposed by the laws by governments both at the central and the state levels are a worry on this as well.

While terming efforts to push exports as a ‘process’ and that such dominance cannot be achieved in three to six months, he pitched for making a start in that direction. He said in a situation of weak global growth, and everybody trying to re-shore production and becoming very nationalistic, to expect exports to be a growth driver as it was between 2003-08 is a pipe dream. According to him, the situation is about grabbing market share because the pie is not growing. He added that Indian policymakers need to support exports but need to insist on a quid pro quo where the help accorded is tied to certain performance milestones like the way East Asian countries do.

The CNX Nifty is currently trading at 10770.70, up by 163.35 points or 1.54% after trading in a range of 10683.45 and 10827.45. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Wipro up by 15.47%, Infosys up by 6.20%, HCL Tech up by 4.34%, Axis Bank up by 4.12% and Tech Mahindra was up by 3.26%. On the flip side, Zee Entertainment down by 2.35%, Eicher Motors down by 1.43%, Bharti Airtel down by 1.42%, Nestle down by 0.89% and Shree Cement was down by 0.88% were the top losers.

Asian markets were trading mixed; KOSPI rose 18.27 points or 0.84% to 2,201.88, Nikkei 225 surged 358.49 points or 1.59% to 22,945.50, Straits Times advanced 31.41 points or 1.2% to 2,651.60 and Jakarta Composite was up by 6.40 points or 0.13% to 5,085.52.

On the other hand; Taiwan Weighted dropped 6.16 points or 0.05% to 12,202.85, Shanghai Composite declined 25.47 points or 0.75% to 3,389.15 and Hang Seng was down by 59.88 points or 0.24% to 25,418.01.