Indian stock markets continue upward trend

Indian equity markets continued their upward trend in the afternoon session tracking firm global cues. Sentiments on the street were optimistic 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. Markets paid no attention to domestic rating agency India Ratings and Research revised the country's FY21 GDP growth forecast to (-) 11.8 per cent from (-) 5.3 per cent earlier. The agency, however, expects India’s gross domestic product (GDP) to rebound and grow at 9.9 per cent year-on-year in FY22 mainly due to the weak base of FY21. Buying in frontline stocks such as HCL Tech, Infosys and Tech Mahindra were aiding sentiment, while selling in Nestle, ONGC and NTPC kept the gains in the markets in check.

On the global front; Asian markets were trading firm with the optimism over potential coronavirus vaccines. Back on street; in scrip specific developments, Amber Enterprises rallied after the company launched a qualified institutional placement (QIP) to raise up to Rs 500 crore for growth capital and IRCTC gained on operation of additional special trains with effect from Saturday, September 12.

The BSE Sensex is currently trading at 38686.44, up by 269.21 points or 0.70% after trading in a range of 38332.20 and 38719.64. There were 14 stocks advancing against 15 stocks declining, while 1 stock remains unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.13%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were IT up by 2.60%, TECK up by 1.81%, Energy up by 1.20%, Oil & Gas up by 0.92%, Consumer Discretionary was up by 0.25%, while Telecom down by 1.71%, Metal down by 1.05%, Capital Goods down by 0.44%, Utilities down by 0.43% and Power was down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 3.71%, Infosys up by 2.82%, Tech Mahindra up by 2.64%, TCS up by 2.27% and Mahindra & Mahindra was up by 1.49%. On the flip side, Nestle down by 1.20%, ONGC down by 1.18%, NTPC down by 1.03%, Bharti Airtel down by 0.91% and Tata Steel was  by 0.91% were the top losers.

Meanwhile, Reserve Bank of India (RBI) is in the process of setting up an innovation hub to promote innovation across the financial sector by leveraging on technology. Detailed guidelines in this respect are expected to be released soon. The Innovation Hub will act as a centre for ideation and incubation of new capabilities which can be leveraged to create innovative and viable financial products and / or services to help achieve the wider objectives of deepening financial inclusion, efficient banking services, business continuity in times of emergency, strengthening consumer protection.

RBI executive director T Rabi Sankar said ‘innovation Hub is one of the things that we are trying out where we are looking at actually creating ideation, creating ideas to evolve technologies.’ He also said ‘we would expect technology firms, financial entities, academic entities, even funding agencies, all of them to interact on this hub and start the entire process from ideation to creation to piloting of solutions.’ He noted that the RBI has released a framework for setting up umbrella entities for operating pan-India retail payments systems.

Sankar further said the RBI has invited applications from eligible companies by February 26, 2021. As per the framework, the companies with a net worth of over Rs 500 crore will be eligible to set up an umbrella entity which among other things will be permitted to set up, manage and operate new payment systems in the retail space comprising ATMs, White Label PoS, Aadhaar-based payments and remittance services. Among other things, the umbrella entity will be permitted to operate clearing and settlement systems for banks and non-banks; identify and manage relevant risks such as settlement, credit, liquidity and operational; and preserve the integrity of the system.

The CNX Nifty is currently trading at 11413.30, up by 58.25 points or 0.51% after trading in a range of 11328.75 and 11432.40. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 3.56%, BPCL up by 3.27%, Tech Mahindra up by 2.70%, Wipro up by 2.67% and Infosys was up by 2.53%. On the flip side, Bharti Infratel down by 5.82%, Grasim Industries down by 2.16%, Tata Motors down by 1.91%, Zee Entertainment down by 1.70% and Shree Cement was down by 1.35% were the top losers.

All Asian markets were trading higher; Hang Seng increased 58.59 points or 0.24% to 24,648.24, Jakarta Composite soared 13.64 points or 0.26% to 5,243.84, Shanghai Composite gained 21.04 points or 0.64% to 3,313.63, Taiwan Weighted strengthened 62.16 points or 0.49% to 12,663.56, Nikkei 225 surged 184.18 points or 0.8% to 23,274.13, Straits Times advanced 14.75 points or 0.59% to 2,525.96 and KOSPI was up by 17.69 points or 0.74% to 2,401.91.