Bourses manage to keep their heads above water in morning deals

Indian equity benchmarks managed to keep their heads above water in morning session on the back of buying by funds and retail investors. Traders were taking support from Niti Aayog CEO Amitabh Kant’s statement that India will witness huge growth in digital lending as the COVID-19 pandemic has increased the acceptance of digital payments. Some support also came with Chief Economic Adviser (CEA) K V Subramanian’s statement that the government may announce more fiscal measures to boost demand once the uncertainty related to Coronavirus disease (COVID-19) pandemic wanes. However, gains remain capped as a private report forecast deeper distress for India which will lead to a 6 per cent growth contraction in FY21, citing the yet to be stabilised infection curve and the COVID-19 caseload in economically key states. According to the report, just 7 percent of the districts in economically key states of Maharashtra, Tamil Nadu and Gujarat, accounting for 30.5 percent of the national economic output, and in Karnataka and Andhra Pradesh account for as much as 70 percent of the caseload. On the sectoral front, pharma stocks remained in limelight as the department of pharmaceuticals notified two key policies -- Production Linked Incentive (PLI) scheme for promotion of domestic manufacturing of critical Key Starting Materials (KSMs)/ drug intermediates (DIs) and Active Pharmaceutical Ingredients (APIs) and scheme for promotion of bulk drug parks, in a bid to boost domestic manufacturing and reduce import dependence.

On the global front, Asian markets were trading mixed, as fresh diplomatic tensions between Washington and Beijing heightened investor jitters and overshadowed the boost to Wall Street from U.S. stimulus hopes. Back home, the BSE Sensex is currently trading at 37907.33, up by 35.81 points or 0.09% after trading in a range of 37738.59 and 37969.60. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.74%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.91%, PSU up by 1.37%, Healthcare up by 1.08%, Realty up by 1.03% and Energy up by 0.95%, while IT down by 0.51%, TECK down by 0.43%, Bankex down by 0.13% and Telecom down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.83%, Asian Paints up by 1.78%, SBI up by 1.17%, Sun Pharma up by 0.95% and NTPC up by 0.83%. On the flip side, Axis Bank down by 2.77%, Infosys down by 0.96%, Tech Mahindra down by 0.95%, Hindustan Unilever down by 0.70% and Mahindra & Mahindra down by 0.49% were the top losers.

Meanwhile, pushing for a relaxation in fiscal norms governing the finances of the states, chairman of the 15th Finance Commission -- NK Singh has said states needed greater fiscal space to meet their expenditure obligations. He said ‘clearly, the finances of the states are under stress, there are issues of fiscal pressure. This is a time, when I believe, some of the basic tenets of the fiscal norms need to be suitably relaxed. This is a time when states need greater freedom to be able to meet their initial obligations, on account of this pandemic.’

According to Singh, the opaqueness and clutter in the demarcation of powers of the central and state governments under the Constitution and other Acts posed a hindrance to India’s pandemic response. In the short term, Singh called for greater harmony between the Disaster Management Act, 2005, and the Epidemic Diseases Act, 1897, both of which have been invoked in the process of responding to the pandemic.

While the newer Act gives powers to all levels of governments from the Centre to districts to set up disaster management authorities, more power rests with the Centre in terms of policy. The older legislation demarcates powers of the Centre and state governments in their response to an epidemic. It grants states powers over laws governing people within its jurisdiction while the Centre is empowered to dictate terms on ports of entry.

The CNX Nifty is currently trading at 11167.55, up by 34.95 points or 0.31% 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 BPCL up by 4.86%, Zee Entertainment up by 3.98%, Indian Oil Corporation up by 3.64%, UPL up by 2.85% and GAIL India up by 2.21%. On the flip side, Axis Bank down by 2.78%, Shree Cement down by 1.26%, Tech Mahindra down by 1.04%, Infosys down by 0.87% and Bharti Infratel down by 0.65% were the top losers.

Asian markets were trading mixed; Hang Seng increased 93.58 points or 0.37% to 25,151.52, Jakarta Composite soared 43.76 points or 0.86% to 5,153.95 and Straits Times advanced 18.70 points or 0.72% to 2,613.23. On the flip side, KOSPI fell 17.95 points or 0.81% to 2,210.71, Shanghai Composite declined 39.62 points or 1.19% to 3,293.54 and Taiwan Weighted dropped 67.40 points or 0.54% to 12,405.87.