Benchmarks trade in high spirit in early deals

Indian equity benchmarks made optimistic start on Monday taking cues from global peers. Markets are trading in fine-fettle in early deals with gains of over a percent each, supported by buying in Energy, Bankex and Oil & Gas counters. Investors are eyeing the June quarter GDP data which will be released by the National Statistical Office later in the day. Sentiments got a boost with report that the Ministry of Home Affairs (MHA) has issued new guidelines for opening up of more activities in areas outside the Containment Zones. In Unlock 4, which will come into effect from September 1, 2020, the process of phased re-opening of activities has been extended further. Under the new guidelines, states are not to impose any local lockdown (State/ District/ sub-division/City/ village level), outside the containment zones, without prior consultation with the central government. adding more optimism,  Public Enterprises Selection Board (PESB) chairman Rajiv Kumar said that central public sector enterprises, which have a combined net worth of close to Rs 12 lakh crore, can boost India's GDP by 2-3 percent by leveraging funds and stepping up capital expenditure. Meanwhile, India has recorded its worst-ever single-day spike of 79,457 new coronavirus cases, taking its total caseload to 3,619,169.

On the global front, Asian markets were trading mixed after official data showed activity in China's services sector expanded at a much faster pace in August, bolstering expectations for economic recovery. The manufacturing sector in China continued to expand in August, albeit at a slower pace, the latest survey from the National Bureau of Statistics revealed with a manufacturing PMI score of 51.0. That missed expectations for a reading of 51.2 and it's down from 51.1 in July.

Back home, banking stocks were buzzing with the RBI’s data showing that bank credit grew 5.52 per cent to Rs 102.19 trillion and deposits increased 11.04 per cent to Rs 140.80 trillion in the fortnight ended August 14. In the year-ago period, bank credit stood at Rs 96.84 trillion and deposit at Rs 126.8 trillion, respectively. In scrip specific development, Reliance Industries climbed after it announced the acquisition of businesses of Kishore Biyani's Future Group for Rs. 24,713 crore.

The BSE Sensex is currently trading at 39885.41, up by 418.10 points or 1.06% after trading in a range of 39790.08 and 40010.17. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.26%, while Small cap index was down by 0.10%.

The gaining sectoral indices on the BSE were Energy up by 1.41%, Bankex up by 1.34%, Oil & Gas up by 1.31%, IT up by 1.07%, Realty up by 1.00%, while Telecom down by 0.26%, Healthcare down by 0.20% were the only losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.63%, ONGC up by 2.62%, Tech Mahindra up by 2.49%, HDFC Bank up by 2.00% and Axis Bank up by 1.91%. On the flip side, Bharti Airtel down by 1.17%, Bajaj Auto down by 0.67% and Sun Pharma down by 0.58% were the few losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that since the share of agriculture in India’s gross value added is about 17 percent, rural demand at best can extend support to consumption demand, but cannot be a substitute for urban demand. It said while the industrial and services sectors are still struggling to recover from the adverse impact of Coronavirus disease (COVID-19), the agriculture sector could become an engine for economic recovery. However, it said a large part of the rural demand, notwithstanding the encouraging sales number of motorcycles/tractors in June 2020, comes from consumer non-durables.

Ind-Ra expects the first quarter 2020-21 GDP growth to come in at negative 17.03 percent. It said the current account in the June quarter is expected to record a surplus of around $18 billion. It also said one sector that has largely not been impacted either during the lockdown or even thereafter is agriculture. Besides, it expects the agriculture sector to grow at 3.5 percent year-on-year in 2020-21. It pointed out that after several years, the agricultural sector has witnessed three consecutive good harvests - rabi 2019, kharif 2019 and rabi 2020. Moreover, it noted that the adequate pre-monsoon rainfall followed by the timely arrival of monsoons in most parts of the country has led to an increase in the total kharif sowing area in 2020 in comparison to the last year.

The report further stated that the rainfall and area sown so far indicate that the country is headed towards a good 2020 kharif harvest, notwithstanding the floods in several areas. However, it said the flip side of high agricultural production levels could be lower prices of agricultural commodities impacting agricultural income itself. Therefore, it said the government needs to have a well-crafted strategy in place, both to continuously monitor the progress of the kharif crop and prevent the distressed sale of kharif harvest.

The CNX Nifty is currently trading at 11777.25, up by 129.65 points or 1.11% after trading in a range of 11734.95 and 11794.25. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 4.43%, Bharti Infratel up by 3.85%, Tata Motors up by 3.29%, ONGC up by 2.61% and Wipro up by 2.55%. On the flip side, JSW Steel down by 1.26%, Bharti Airtel down by 1.24%, Sun Pharma down by 0.77%, Eicher Motors down by 0.61% and Bajaj Auto down by 0.58% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 392.90 points or 1.72% to 23,275.55, Straits Times rose 8.83 points or 0.35% to 2,548.46, Hang Seng jumped 323.37 points or 1.27% to 25,745.43 and Shanghai Composite gained 27.07 points or 0.80% to 3,430.88. On the other hand, Taiwan Weighted declined 42.97 points or 0.34% to 12,685.88, KOSPI fell 4.01 points or 0.17% to 2,349.79 and Jakarta Composite was down by 2.80 points or 0.05% to 5,343.86.