Benchmarks trade tad above neutral lines in early deals

Indian equity benchmarks made slightly positive start following overnight gains on Wall Street. Markets are trading near neutral lines in early deals with modest gains. Buying in Auto, Capital Goods and Consumer Discretionary stocks aided the domestic indices. Traders draw some support as Chief Economic Advisor Krishnamurthy Subramanian exuded confidence that the country would be back to a high growth path through reforms announced by the government, after overcoming the COVID-19 pandemic. Adding more optimism, a private report stated that consumer confidence index has shown a marginal uptick of 1.1 percentage points in September 2020. However, gains remained capped with the government data showing that contracting for the sixth straight month, India's exports slipped 12.66% to $22.7 billion in August, on account of decline in the shipments of petroleum, leather, engineering goods and gems and jewellery items. The trade deficit for August this year was estimated at $6.77 billion, against $4.8 billion in July 2020 and $13.86 billion in August 2019.

On the global front, Asian markets were trading mostly higher with modest gains following the positive cues overnight from Wall Street and as investors turned cautious ahead of the US Federal Reserve's monetary policy decision due later in the day. While the Fed is widely expected to leave interest rates unchanged, investors are likely to pay close attention to any tweaks to the accompanying statement. The central bank's latest economic projections may also attract attention.

Back home, sugar stocks were in focus with report that sugar mills owed nearly Rs 13,000 crore to cane farmers as on September 11 for the crop procured during 2019-20 marketing season that started October last year. In scrip specific developments, Pfizer gained as its giant trial of an experimental Covid-19 vaccine have reported no safety problems even after more than 12,000 people received their second of two doses. On the other hand, SpiceJet came under pressure on reporting a consolidated loss of Rs 600.52 crore for the June quarter, primarily due to muted travel demand following the coronavirus outbreak.

The BSE Sensex is currently trading at 39084.62, up by 40.27 points or 0.10% after trading in a range of 39037.96 and 39161.40. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.48%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Auto up by 1.85%, Capital Goods up by 0.89%, Consumer Discretionary up by 0.77%, Industrials up by 0.64%, Healthcare up by 0.61%, while Bankex down by 0.38%, Utilities down by 0.28%, IT down by 0.23%, TECK down by 0.18% were the few losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.58%, Bajaj Auto up by 2.60%, Maruti Suzuki up by 1.21%, Larsen & Toubro up by 0.87% and Bajaj Finserv up by 0.82%. On the flip side, HCL Technologies down by 1.20%, Axis Bank down by 1.09%, Indusind Bank down by 0.81%, ICICI Bank down by 0.67% and Asian Paints down by 0.54% were the top losers.

Meanwhile, contracting for the sixth straight month, India’s merchandise exports slipped 12.66% to $22.70 billion in August 2020 as compared to same period of last year, on account of fall in the shipments of petroleum, leather, engineering goods and gems and jewellery items. Trade deficit, gap between imports and exports, narrowed to $6.77 billion in August 2020 from $13.86 billion a year ago.

As per the data released by the Commerce Ministry, merchandise exports fell by 12.66% to $22.70 billion in August 2020, as compared to $25.99 billion in the same month a year ago. In Rupee terms, it was down by 8.33% to Rs 1,69,513.81 crore in August 2020, as compared to Rs 1,84,921.23 crore in August 2019. Cumulative value of exports for the period April- August 2020-21 was $97.66 billion as against $133.14 billion during the period April- August 2019-20, registering a negative growth of 26.65%. In Rupee terms, it was down by 20.73% to Rs 7,35,835.87crore from Rs 9,28,243.85 crore.

Non-petroleum and Non Gems and Jewellery exports in August 2020 were $18.95 billion, as compared to $19.57 billion in August 2019, exhibiting a negative growth of 3.17%. Non-petroleum and Non Gems and Jewellery exports in April- August 2020-21 were $83.24 billion, as compared to $99.65 billion for the corresponding period in 2019-20.

On the other hand, imports during August 2020 too decreased by 26.04% to $29.47 billion as compared to $39.85 billion in August 2019, while in rupee terms it was down by 22.38% to Rs 2,20,083.69 crore from Rs 2,83,530.41 crore in August 2019. Cumulative value of imports for the period April- August 2020-21 was $118.38 billion, as against $210.39 billion during the period April- August 2019-20, registering a negative growth of 43.73%. In rupee terms, it was Rs 8,91,978.43 crore, down by 39.18% from Rs 14,66,659.90 crore in the same period last year.  

Oil imports in August 2020 were $6.42 billion, which were 41.62% lower, compared to $11.00 billion in August 2019. Oil imports in April- August 2020-21 were $26.03 billion which were 53.61% lower compared to $56.11 billion, over the same period last year. Non-oil imports during August 2020 were estimated at $23.05 billion which was 20.10% lower than non-oil imports of $28.85 billion in August 2019. Non-Oil and Non-Gold imports were $19.35 billion in August 2020, down 29.61% over the same period of last year.  Non-Oil and Non-Gold imports were $86.17 billion in April- August 2020-21, down 38.34%, over the same period of last year.

The CNX Nifty is currently trading at 11538.15, up by 16.35 points or 0.14% after trading in a range of 11516.75 and 11546.55. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.94%, Tata Motors up by 2.83%, Bajaj Auto up by 2.69%, Hero MotoCorp up by 1.67% and Hindalco up by 1.67%. On the flip side, HCL Technologies down by 1.29%, Axis Bank down by 1.17%, UPL down by 0.85%, JSW Steel down by 0.73% and Indusind Bank down by 0.72% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 rose 35.70 points or 0.15% to 23,490.59, Straits Times added 10.88 points or 0.44% to 2,496.71, Taiwan Weighted surged 153.38 points or 1.19% to 12,999.03 and KOSPI inched up 2.24 points or 0.09% to 2,445.82. On the other hand, Hang Seng lost 60.44 points or 0.24% to 24,672.32, Jakarta Composite fell 40.26 points or 0.79% to 5,060.61 and Shanghai Composite was down by 7.75 points or 0.24% to 3,287.93.