Markets trade higher with notable gains in early deals

Indian equity benchmarks made positive start on Friday tracking modest gains in Asian peers. Markets were trading higher with notable gains in early deals supported by buying in all the sector indices except FMCG. Sentiments got a boost with report that the Reserve Bank of India (RBI) will purchase government securities under open market operations (OMOs) for an aggregate amount of Rs 10,000 crore on September 24, 2020. Some support also came in as investment through participatory notes (P-notes) in the domestic capital market surged to over Rs 74,000 crore till August-end, making it the highest level in 10 months. Though, rising coronavirus cases in the country kept upside in check. India has recorded 96,730 Covid-19 cases in just 24 hours, taking its tally past the 5.2-million mark. With this, India is rapidly nearing the US tally of 6.8 million. also, traders took note of report that advance tax collections fell 25.5 per cent to Rs 1,59,057 crore in the second quarter of the fiscal, However, there was improvement over the first quarter ended June, when advance tax revenue had plunged 76 per cent to a tepid Rs 11,714 crore as the whole economy was under a stringent lockdown.

On the global front, most of the Asian markets were trading higher with modest gains following the negative cues overnight from Wall Street reflecting weakness in tech stocks. Some of the markets pared early gains as investors preferred to remain on the sidelines amid worries about the global economic recovery. Meanwhile, the Ministry of Internal Affairs and Communications said that overall nationwide consumer prices in Japan were up 0.2 percent on year in August - in line with expectations and slowing from 0.3 percent in July.

Back home, the commerce ministry's investigation arm DGTR (Directorate General of Trade Remedies) has initiated a probe into an alleged circumvention of the anti-dumping duty imposed on the imports of axle for trailers from China. On the sectoral front, defence stocks were in focus as the government permitted foreign direct investment (FDI) of up to 74 per cent under automatic route in the defence sector with a view to attracting overseas investors.

The BSE Sensex is currently trading at 39117.92, up by 138.07 points or 0.35% after trading in a range of 39064.84 and 39200.42. There were 22 stocks advancing against 7 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.77%, while Small cap index up by 0.50%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.74%, Consumer Durables up by 1.21%, IT up by 0.83%, Realty up by 0.79%, Metal up by 0.77%, while FMCG down by 0.18% was the sole losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.93%, Tech Mahindra up by 1.73%, TCS up by 1.31%, Tata Steel up by 1.19% and Asian Paints up by 1.18%. On the flip side, Hindustan Unilever down by 1.05%, Bajaj Auto down by 0.43%, Maruti Suzuki down by 0.23%, HDFC Bank down by 0.18% and Nestle down by 0.14% were the top losers.

Meanwhile, investment in the Indian capital market through participatory notes (P-notes) climbed to over Rs 74,000 crore till August-end, making it the highest level in 10 months. This marks the fifth consecutive monthly rise in the investment through the route, also signaling at growing confidence of foreign portfolio investors (FPIs) in the local market.

According to Securities and Exchange Board of India (SEBI) data, the value of P-note investments in Indian markets--equity, debt, hybrid securities and derivatives--rose to Rs 74,027 crore till August-end from Rs 63,228 crore clocked by the end of July. The figure at August-end was the highest level of investment since October 2019, when the total value of P-note investments in the Indian markets stood at Rs 76,773 crore. The rise in FPI participation through P-notes shows their rise in confidence, since the 15-year lows of P-notes participation in March 2020. 

P-notes are issued by registered foreign portfolio investors (FPIs) to overseas players who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through due diligence.

The CNX Nifty is currently trading at 11569.35, up by 53.25 points or 0.46% after trading in a range of 11550.90 and 11584.10. There were 39 stocks advancing against 10 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Cipla up by 4.48%, Dr. Reddy’s Lab up by 4.43%, Sun Pharma up by 3.06%, Hindalco up by 1.82% and Tech Mahindra up by 1.72%. On the flip side, Hindustan Unilever down by 0.95%, Maruti Suzuki down by 0.62%, Bajaj Auto down by 0.62%, HDFC Life Insurance down by 0.33% and Bharti Infratel down by 0.31% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 rose 7.77 points or 0.03% to 23,327.14, Hang Seng added 75.65 points or 0.31% to 24,416.50, Taiwan Weighted gained 29.35 points or 0.23% to 12,902.09, Jakarta Composite surged 20.19 points or 0.40% to 5,058.59 and Shanghai Composite was up by 18.58 points or 0.57% to 3,289.02. On the other hand, Straits Times lost 4.09 points or 0.16% to 2,496.69 and KOSPI inched down by 0.80 points or 0.03% to 2,405.37.