Local indices add some gains in morning session

Indian equity benchmarks added some gains in morning session, tracking firm cues from global peers. Traders took support with industry chamber Assocham’s statement that the rate of decline in output of core segments of the economy has been arrested considerably in July 2020. In line with an evaluation by Assocham, cement, steel and coal, which suffered heavy declines in the first quarter, recovered significantly in July 2020, even though the annualised numbers reflect contraction. Adding to the optimism, the Finance Ministry said banks have sanctioned loans of about Rs 1,61,017 crore under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector reeling under the slowdown caused by the coronavirus pandemic. However, there was some cautiousness too with Moody's Investors Service’s report that the continued rise in new infection rates across parts of Europe and Asia highlights the risk of a second wave of infections which could lead to renewed closures and a sustained pullback in consumption.

On the global front, Asian markets were trading mostly in green, amid optimism about coronavirus vaccines. Investors shrugged off data that showed Japan's economy contracted more than initially estimated in the second quarter. The Cabinet Office said Japan’s seasonally adjusted real gross domestic product contracted at an annualized rate of 28.1%, worse than the 27.8% figure given last month. Back home, on the sectoral front, majority of telecom stocks were trading in red as India Ratings and Research’s (Ind-Ra) report stated that the telecom industry's subscriber base continued to decline month-on-month in May for the third month in a row due to outbreak of COVID-19, which led to issues like movement of migrant labourers to their home towns and SIM card consolidation.

The BSE Sensex is currently trading at 38571.55, up by 154.32 points or 0.40% after trading in a range of 38332.20 and 38574.91. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.15%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were IT up by 1.78%, Energy up by 1.18%, TECK up by 1.14%, Oil & Gas up by 0.75% and Healthcare up by 0.54%, while Telecom down by 1.62%, Utilities down by 0.59%, Realty down by 0.50%, Metal down by 0.49% and FMCG down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.28%, Bajaj Finance up by 1.45%, HCL Technologies up by 1.40%, TCS up by 1.40% and Reliance Industries up by 1.38%. On the flip side, NTPC down by 1.35%, Bharti Airtel down by 1.21%, Nestle down by 1.16%, Kotak Mahindra Bank down by 1.01% and ONGC down by 0.85% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has said that it will conduct simultaneous purchase and sale of government securities under the Open Market Operation (OMO) for Rs 10,000 crore each on September 10.  The RBI on August 31 had announced that it would conduct special simultaneous purchase and sale of government securities under OMO for an aggregate amount of Rs 20,000 crore in two tranches of Rs 10,000 crore each as part of its measures to foster orderly market conditions.

The first auction is scheduled for September 10, 2020.  It would be selling three securities totalling Rs 10,000 crore and also purchasing equal number of securities of the same amount.  The result of the auctions will be announced on the same day. The second tranche of auction would be conducted on September 17.
Simultaneous purchase and sale of government securities under OMOs, popularly known as Operation Twist, involves purchasing G-Sec of longer maturities and selling equal amount of G-Sec of shorter maturities.

The CNX Nifty is currently trading at 11386.60, up by 31.55 points or 0.28% after trading in a range of 11328.75 and 11393.25. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.00%, Infosys up by 1.99%, Wipro up by 1.69%, Bajaj Finance up by 1.56% and Reliance Industries up by 1.41%. On the flip side, Bharti Infratel down by 3.90%, Zee Entertainment down by 1.32%, NTPC down by 1.30%, Nestle down by 1.17% and Bharti Airtel down by 1.07% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 114.62 points or 0.5% to 23,204.57, Taiwan Weighted strengthened 36.39 points or 0.29% to 12,637.79, KOSPI rose 13.87 points or 0.58% to 2,398.09, Jakarta Composite soared 8.34 points or 0.16% to 5,238.54 and Straits Times advanced 7.45 points or 0.3% to 2,518.66.

On the flip side, Shanghai Composite declined 11.30 points or 0.34% to 3,281.29 and Hang Seng decreased 139.41 points or 0.57% to 24,450.24.