Markets continue to trade with marginal gains in morning deals

Indian equity benchmarks continued to trade with marginal gains in morning deals, helped by gains in Auto, Consumer Discretionary and Metal stocks amid positive trend in other Asian markets. Domestic sentiments remained positive with Foreign Secretary Harsh Vardhan Shringla’s statement that India has received over $20 billion in FDI amid the coronavirus pandemic, showcasing the country as one of the most attractive destinations for investment globally. Some optimism also came 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. Meanwhile, the Reserve Bank of India (RBI) has proposed allowing foreign portfolio investors (FPIs) to undertake exchange-traded rupee Interest Rate Derivatives (IRD) transactions subject to an overall ceiling of Rs 5,000 crore. On the sectoral front, stocks related to textile sector remained in focus with rating agency ICRA’s report that the US restrictions on some textile imports from Xinjiang in China is likely to augur well for the Indian textile exporters.  

On the global front, Asian markets were trading mostly higher, following the positive cues from Wall Street amid a continued rebound by tech stocks and on higher crude oil prices. Investors now look ahead to the U.S. Federal Reserve's monetary policy decision due later in the day, with the central bank's latest economic projections likely to attract attention. Meanwhile, the Ministry of Finance said that Japan had a merchandise trade surplus of 248.299 billion yen in August. That was well above expectations for a deficit of 37.5 billion yen following the 11.6 billion yen surplus in July. Exports were down 14.8 percent on year to 5.232 trillion yen, beating forecasts for a fall of 16.1 percent after sinking 19.2 percent in the previous month. Imports tumbled an annual 20.8 percent to 4.984 trillion yen versus expectations for a fall of 18.0 percent following the 22.3 percent decline a month earlier.

The BSE Sensex is currently trading at 39119.44, up by 75.09 points or 0.19% after trading in a range of 39037.96 and 39161.40. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.36%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Auto up by 2.21%, Consumer Discretionary up by 0.84%, Metal up by 0.78%, Capital Goods up by 0.76% and Basic Materials up by 0.66%, while Oil & Gas down by 0.35%, Bankex down by 0.23%, Utilities down by 0.19% and Energy down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.55%, Bajaj Auto up by 3.26%, Maruti Suzuki up by 1.18%, Bajaj Finserv up by 1.16% and Tata Steel up by 0.78%. On the flip side, Axis Bank down by 0.98%, Asian Paints down by 0.86%, Indusind Bank down by 0.82%, SBI down by 0.67% and ICICI Bank down by 0.48% were the top losers.

Meanwhile, Chief Economic Advisor Krishnamurthy Subramanian has 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. He said ‘we have been there before (in this kind of economic crisis) and will do that again.’

He pointed out that core sectors like cement, steel, railway freight and Information and Communication Technology were all in positive territory for the first time since July 2019. He said ‘if you look at the Purchasing Managers Index (PMI), there was a sharp increase in both PMI for manufacturing and services. But to say that there has been a decline in the GDP over the last 12 quarters is incorrect'.

Earlier, He said the centre was requesting state governments to bring in changes in labour laws, which is within their ambit since some were more than a hundred years old. He mentioned there are many archived labour laws as wages and salaries, are defined in multiple ways, creating a 'compliance nightmare'… there are several states which are planning to bring in changes in labour laws.

The CNX Nifty is currently trading at 11546.25, up by 24.45 points or 0.21% after trading in a range of 11516.75 and 11556.20. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 5.62%, Bajaj Auto up by 3.49%, Tata Motors up by 2.32%, Hindalco up by 2.26% and Hero MotoCorp up by 2.20%. On the flip side, Zee Entertainment down by 1.06%, Axis Bank down by 1.03%, Asian Paints down by 1.02%, UPL down by 0.94% and Cipla down by 0.87% were the top losers.

Asian markets were trading mostly higher; Taiwan Weighted strengthened 152.65 points or 1.19% to 12,998.30, Nikkei 225 surged 33.93 points or 0.14% to 23,488.82, Straits Times advanced 11.00 points or 0.44% to 2,496.83 and KOSPI rose 0.77 points or 0.03% to 2,444.35.

On the flip side, Shanghai Composite declined 7.75 points or 0.24% to 3,287.93, Jakarta Composite lost 37.74 points or 0.74% to 5,063.13 and Hang Seng decreased 60.44 points or 0.24% to 24,672.32.