Benchmarks continue firm trade in morning session

Indian equity benchmarks continued to trade firm in morning session, tracking heightened buying sentiment across the board amid strong cues from global markets as hopes of a COVID-19 vaccine boosted investor confidence. Traders also found support with the India Meteorological Department (IMD) in its latest forecast said rains would pick up in the next few days over north and south India. Encouraging and better-than-expected earnings by corporates along with appreciating rupee against dollar also provided support to the markets. However, there was some cautiousness too with External Affairs Minister S Jaishankar’s statement that the free trade agreements (FTAs) that India entered into over the years have not been able to largely serve the country's economy well in terms of building its capacities, though all such pacts are not the same. On the sectoral front, select power stocks were trading in red with ratings agency Icra’s report stated that India's electricity demand is likely to fall by up to 6 percent this fiscal due to re-imposition of lockdown restrictions in many parts of the country. 

On the global front, Asian markets were trading higher as positive data from trials of three potential Covid-19 vaccines, including a closely-watched candidate from Oxford University, and hopes for another round of U.S. stimulus boosted investors' appetite for riskier assets. Meanwhile, media reports suggest that European Union leaders are close to reaching an agreement on a 750-billion-euro stimulus plan for regional economies hard-hit by the pandemic. Back home, the BSE Sensex is currently trading at 37817.37, up by 398.38 points or 1.06% after trading in a range of 37742.05 and 37923.38. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.51%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Realty up by 2.84%, Energy up by 1.76%, Auto up by 1.75%, Oil & Gas up by 1.69% and Bankex up by 1.63%, while Telecom down by 0.88% and FMCG down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 3.56%, ICICI Bank up by 2.84%, Reliance Industries up by 1.76%, HDFC up by 1.71% and Axis Bank up by 1.63%. On the flip side, Bajaj Finserv down by 0.81%, Tech Mahindra down by 0.64%, Hindustan Unilever down by 0.54%, Bharti Airtel down by 0.43% and Asian Paints down by 0.37% were the top losers.

Meanwhile, ratings agency Icra has said cement demand may de-grow by up to 25 percent in current financial year (FY21) on account of the coronavirus lockdown and subsequent specific restrictions disrupting construction activities. It further said cement manufactures may witness a compression in operating profitability by 150-200 basis points (bps) in FY21.

However, it stated that despite the expected decline in demand, cement prices are likely to remain stable or get only marginally corrected. According to Icra Ratings Assistant Vice President Anupama Reddy, demand offtake effectively dried up during the lockdown period of close to 40 days.

She added with the lockdown being extended with varying forms and severities across different regions, the demand has seen a sharp correction in Q1 FY2021. The demand is likely to recover only from H2 FY2021 post monsoons.

The CNX Nifty is currently trading at 11137.15, up by 114.95 points or 1.04% after trading in a range of 11113.25 and 11164.45. There were 33 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were BPCL up by 5.42%, Maruti Suzuki up by 3.71%, Eicher Motors up by 3.54%, Tata Motors up by 2.76% and ICICI Bank up by 2.75%. On the flip side, Bharti Infratel down by 1.75%, Zee Entertainment down by 0.87%, Bajaj Finserv down by 0.87%, Britannia Industries down by 0.68% and Cipla down by 0.62% were the top losers.

Asian markets were trading higher; Hang Seng increased 471.03 points or 1.88% to 25,529.02, Jakarta Composite soared 51.06 points or 1.01% to 5,102.17, Taiwan Weighted strengthened 275.62 points or 2.26% to 12,450.16, KOSPI rose 35.50 points or 1.61% to 2,233.70, Straits Times advanced 11.47 points or 0.44% to 2,627.77, Nikkei 225 surged 186.26 points or 0.82% to 22,903.74 and Shanghai Composite gained 2.41 points or 0.07% to 3,316.56.