Markets trade firm in early deals on Friday

Indian equity benchmarks made positive start on Friday following Asian peers. Markets are trading firm in early deals with gains of over half a percent each, aided by buying at Metal, Telecom and Consumer Durables counters. Brooder indices are outperforming larger peers with gains of around a percent each. Sentiments got a boost with Nasscom President Debjani Ghosh’s statement that India has the potential to become a magnet for digital innovation by focusing on areas like talent, policy framework and trust. Some support also came in with report that investments through participatory notes (P-notes) in the domestic capital market surged to Rs 62,138 crore till June-end, making it the third consecutive monthly rise. Traders took note that India and the United States on Thursday discussed the possibility of a free trade pact.  Though, upside remained capped as the domestic rating agency ICRA revised its forecast for contraction in India's GDP in FY21 to 9.5% from 5% it expected earlier, as continued lockdowns in some states have affected the recovery seen in May and June. Meanwhile, India has recorded over 35,000 Covid-19 cases in the past 24 hours - its biggest single-day spike so far - taking the total number of coronavirus cases to 1,005,637. With over 680 deaths on Thursday, the country's death toll has now risen to 25,609.

On the global front, most of the Asian markets are trading higher after sharp losses in the previous session and as investors shrugged off the weak cues overnight from Wall Street following the release of worse-than-expected weekly jobless claims data. Expectations of more stimulus measures to aid a global economic recovery boosted sentiment.

Back home, aviation stocks were in focus with Civil Aviation Minister Hardeep Singh Puri’s statement that India has established individual bilateral bubbles with France and the US that will allow airlines of each country in the pact to operate international flights, and added that similar arrangement with Germany and the UK will soon be permitted. In scrip specific development, Cyient gained after the company reported a 76.2% rise in Q1FY21 net profit to Rs 81.4 crore as against Rs 46.2 crore in the previous quarter. Thomas Cook India trading in green as it signed an agreement with dnata Travel to take over the firm's corporate travel portfolio in the country.

The BSE Sensex is currently trading at 36672.83, up by 201.15 points or 0.55% after trading in a range of 36512.92 and 36728.59. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 0.95%, while Small cap index was up by 0.92%.

The top gaining sectoral indices on the BSE were Metal up by 1.83%, Telecom up by 1.51%, Consumer Durables up by 1.30%, Basic Materials up by 1.25%, Utilities up by 1.03%, while IT down by 0.81% and TECK down by 0.39% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.25%, ONGC up by 3.02%, Bajaj Finance up by 1.71%, Titan Company up by 1.71% and HDFC up by 1.65%. On the flip side, TCS down by 1.01%, Infosys down by 0.87% and Tech Mahindra down by 0.47% were the few losers.

Meanwhile, domestic rating agency ICRA in its latest report has revised its forecast for contraction in India’s Gross Domestic Product (GDP) growth to 9.5 percent in the current fiscal (FY21) from earlier assessment of 5 percent. It cited the climbing COVID-19 infections resulting in a spate of localised lockdowns in some states and cities as the reason for the sharp downward revision. It added that these localised lockdowns are arresting the nascent recovery that had set in during May-June 2020.

The report said the country's economy may have contracted by a sharp 25 percent in the first quarter of FY21, and expects a shallow recovery in the subsequent quarters, with a contraction of 12.4 percent in the second quarter of FY21 and a milder 2.3 percent in the third quarter, followed by a growth of 1.3 percent in the fourth quarter of FY21. Besides, it stated that the Indian economy had started to recover from the troughs experienced in April 2020, when the lockdown was at its severest, and many sectors seemed to be adjusting to the new normal. However, it said the unabated rise in COVID-19 infections in the unlock phase and re-imposition of localised lockdowns in several states appear to have interrupted this recovery.

However, the rating agency expects rural economy to partly counter the slowdown in urban economy, and is optimistic regarding the outlook for agricultural growth and rural consumption. It expects agricultural GVA to rise by 3.5-4 percent in FY21, supporting rural sentiments. It has, however, tempered its expectations regarding the extent of fiscal support that may be forthcoming, given the revenue shock being experienced by various levels of governments.

The CNX Nifty is currently trading at 10795.60, up by 55.65 points or 0.52% after trading in a range of 10749.65 and 10817.95. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 4.13%, Tata Steel up by 3.23%, ONGC up by 2.76%, JSW Steel up by 2.51% and Adani Ports & SEZ up by 1.82%. On the flip side, Wipro down by 1.18%, Infosys down by 1.11%, TCS down by 1.11%, IOC down by 0.71% and BPCL down by 0.28% were the top losers.

Asian markets are trading mostly in green; Straits Times rose 3.04 points or 0.12% to 2,626.71, Hang Seng jumped 152.89 points or 0.61% to 25,123.58, Taiwan Weighted surged 77.05 points or 0.63% to 12,234.79 and KOSPI added 15.65 points or 0.72% to 2,199.41. On the other hand, Nikkei 225 declined 69.75 points or 0.31% to 22,700.61, Jakarta Composite lost 5.06 points or 0.10% to 5,093.31 and Shanghai Composite was down by 16.28 points or 0.51% to 3,193.82.