Benchmarks trade slightly higher in early deals

Indian equity benchmarks made cautious start on Thursday amid mixed Asian cues coupled with rising coronavirus cases in the country. India witnessed a huge spike of over 45,000 in the count of new coronavirus cases in the past 24 hours, taking its tally to 1,239,684. Markets are trading slightly higher in early deals aided by buying at Oil & Gas, Healthcare and Realty counters. Sentiments got boost as calling for more investment in India, Prime Minister Narendra Modi said India is emerging as a land of opportunities. He added that stronger domestic economic capacities can ensure global resilience against external shocks. Some support also came in as pushing for a relaxation in fiscal norms governing the finances of the states, NK Singh, chairman of the 15th Finance Commission, said states needed greater fiscal space to meet their expenditure obligations. Though, upside remained capped as US Ambassador to India Kenneth Juster has flagged concerns about India’s policy environment and micro-management of the economy. Juster said ‘for India to become a part of the global supply chain, first you need a stable & predictable regulatory environment, a lighter touch on regulations and you need to unleash and not micromanage economic growth.’

On the global front, Asian markets are trading mixed as the positive cues overnight from Wall Street was offset by worries about rising tensions between the US and China after the US asked Beijing to close its diplomatic consulate in Houston within the next 72 hours. Chinese foreign ministry spokesperson Wang Wenbin condemned the action and warned of retaliation if the US does not reverse its decision.

Back home, telecom stocks were in focus with the Department of Telecom (DoT) ordering that telecom operators will now have to provide the location grid of the premises of bulk subscribers during physical verification for issuing new connections.  In scrip specific developments, Vodafone Idea rallied after the Supreme Court dismissed a petition filed by the income tax department and ordered it to refund Rs. 833 crore to the company. Alembic Pharma gained after its quarterly profit jumped over two fold.

The BSE Sensex is currently trading at 37941.96, up by 70.44 points or 0.19% after trading in a range of 37738.59 and 37969.60. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.86%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.62%, Healthcare up by 1.13%, Realty up by 1.13%, PSU up by 0.97%, Energy up by 0.95%, while IT down by 0.65%, TECK down by 0.50%, Power down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.76%, Asian Paints up by 1.72%, HDFC up by 1.40%, Larsen & Toubro up by 1.31% and Indusind Bank up by 1.11%. On the flip side, Axis Bank down by 1.58%, Infosys down by 1.13%, Tech Mahindra down by 1.12%, Mahindra & Mahindra down by 0.79% and HCL Technologies down by 0.48% were the top losers.

Meanwhile, pointing out that counter cyclical policy is important, Chief Economic Adviser (CEA) K V Subramanian has said that the government may announce more fiscal measures to boost demand once the uncertainty related to Coronavirus disease (COVID-19) pandemic wanes. He also said ‘the government is willing to do what is necessary in terms of government consumption but timing of this is extremely important...Till we have uncertainty, even if people have money in their pockets, they may decide to keep it in their bank.’

CEA said people are saving rather than spending due to uncertainty and added that even Jan Dhan account holders whose marginal propensity to consume is very high are indulging in saving. He said the right point would be if vaccines come and thereby uncertainty goes down. I think the time would be very right for the fiscal push which will really generate demand even for discretionary items.’ He noted that demand is important, countercyclical policy is important but the timing is also as important to ensure value for money spent.

Pointing out that the banking sector is holding back growth in a significant manner, Subramanian said India lags behind in global size which has affected investment. Thus, he said there are problems of scale and quality of lending and the banking sector in India has been also lagging in terms of technology adaptation like data analytics.

The CNX Nifty is currently trading at 11172.85, up by 40.25 points or 0.36% after trading in a range of 11103.15 and 11177.15. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 4.49%, BPCL up by 4.17%, UPL up by 3.47%, Asian Paints up by 1.95% and IOC up by 1.79%. On the flip side, Axis Bank down by 1.55%, Tech Mahindra down by 1.10%, Infosys down by 0.94%, Mahindra & Mahindra down by 0.82% and TCS down by 0.52% were the top losers.

Asian markets are trading mixed; Taiwan Weighted slipped 56.20 points or 0.45% to 12,417.07, KOSPI lost 20.50 points or 0.92% to 2,208.16 and Shanghai Composite was down by 39.62 points or 1.19% to 3,293.54. On the other hand, Straits Times gained 18.39 points or 0.71% to 2,612.92, Hang Seng rose 93.58 points or 0.37% to 25,151.52 and Jakarta Composite increased 41.99 points or 0.82% to 5,152.18.