Markets end marginally higher in choppy trade

Swinging in between gains and losses, domestic benchmark indices ended a choppy day of trade with marginal gains on Monday, as IT, FMCG and TECK stocks witnessed buying. After making cautious start, key indices fell sharply as traders got anxious with FICCI’s statement that the recent rise in smuggling in the northeastern region can be attributed to economic distress insinuated by Covid-19 pandemic. After that, key gauges trimmed some of their initial losses and traded in range-bound for most part of the day, as rising coronavirus cases in the country kept the inventors nervous. Sentiments remained in lackluster mood with former Reserve Bank Governor Raghuram Rajan stated that the negative GDP growth numbers should alarm everyone. Emphasising on the importance of government relief or support in the given scenario, he pointed out that it is ‘meagre’ so far.

However, domestic markets erased all the losses and managed to end marginally higher, taking support from Finance Minister Nirmala Sitharaman’s statement that India’s commitment to reform is being taken seriously by foreign investors, which is evident from the good inflow of FDI even during the time of COVID-19. Between April-July, the Foreign Direct Investment (FDI) into India stood at $20 billion. Market participants also took a note of Former Union finance minister P Chidambaram’s statement that the government needs to borrow more to help stimulate demand and revive the country's Gross Domestic Product (GDP) growth. He also suggested some measures to raise money which include relaxing FRBM norms, accelerating disinvestment and borrowing money from global banks.

On the global front, Asian markets ended mostly lower on Monday, following mixed trade data released by China and on worries about rising U.S.-China tensions after Reuters reported that the U.S. government is considering adding China's largest chipmaker Semiconductor Manufacturing International Corp. or SMIC to a trade blacklist. Data from the General Administration of Customs showed that China's exports grew more than expected in August mainly due to base effects, while imports dropped unexpectedly from last year. European markets were trading higher with investors keeping a close watch on COVID-19 vaccine developments. Back home, on the sectoral front, auto stocks were in focus with the Society of Indian Automobile Manufacturers (SIAM) report that the commercial vehicle industry, which is facing challenging times, is expected to take at least 1-2 years to get back to the 2018-19 sales volume level when the industry crossed the one million sales mark.

Finally, the BSE Sensex rose 60.05 points or 0.16% to 38,417.23, while the CNX Nifty was up by 21.20 points or 0.19% to 11,355.05.

The BSE Sensex touched high and low of 38,519.92 and 38,060.74, respectively and there were 18 stocks advancing against 12 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.78%, while Small cap index was down by 0.20%.

The top gaining sectoral indices on the BSE were IT up by 0.81%, FMCG up by 0.73%, TECK up by 0.72%, Metal up by 0.23% and Consumer Durables up by 0.19%, while Realty down by 0.82%, Utilities down by 0.76%, Basic Materials down by 0.59%, Oil & Gas down by 0.58% and Auto down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.77%, TCS up by 1.64%, ITC up by 1.42%, Asian Paints up by 1.33% and HDFC up by 1.17%. On the flip side, Mahindra & Mahindra down by 3.46%, Bajaj Finance down by 2.54%, NTPC down by 2.43%, Ultratech Cement down by 1.97% and ONGC down by 1.92% were the top losers.

Meanwhile, former Union finance minister P Chidambaram has suggested the government to borrow more to help stimulate demand and revive the country's Gross Domestic Product (GDP) growth. He also suggested some measures to raise money which include relaxing FRBM norms, accelerating disinvestment and borrowing money from global banks.

Chidambaram sought transferring cash to the poorest 50 percent of families, offering them foodgrains and increasing spending on infrastructure. Besides, he has called upon it to provide Goods and Services Tax (GST) compensation to states, as promised to them at the time of GST implementation. He further said the government needs to start massive public works in order to boost economic activity and should pay wages in terms of food grains.

To enhance the lending capacity of banks, he said the government must re-capitalise them. He also said that the government must relax the Fiscal Responsibility and Budget Management (FRBM) norms to borrow more this year. He noted that the divestment plan should also be expedited and added that the government must utilise the offer from international organisations like International Monetary Fund, World Bank and Asian Development Bank.

The CNX Nifty traded in a range of 11,381.15 and 11,251.70 and there were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 5.72 %, HDFC Life Insurance up by 3.24%, Dr. Reddys Lab up by 2.33%, ITC up by 1.87% and Hindustan Unilever up by 1.66%. On the flip side, Mahindra & Mahindra down by 3.59%, UPL down by 2.82%, Bajaj Finance down by 2.47%, GAIL India down by 2.35% and NTPC down by 2.16% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 92.44 points or 1.59% to 5,891.52, France’s CAC rose 59.91 points or 1.21% to 5,024.98 and Germany’s DAX was up by 169.29 points or 1.32% to 13,011.95.

Asian markets ended mostly lower on Monday. Japanese shares plunged tracking negative Wall Street cues; and ahead of a heavy week of macroeconomic data with figures on household spending, current account and gross domestic product due on Tuesday. Further, Chinese shares ended lower on worries about rising Sino-US tensions after reports that the United States was planning to blacklist the China’s largest contract chipmaker SMIC in a move that could neuter the country’s semiconductor industry. Data from the General Administration of Customs showed that China's exports grew more than expected in August mainly due to base effects, while imports dropped unexpectedly from last year. Though, Seoul shares rebounded as South Korea reported a slowdown in daily corona virus infection cases.