Bourses manage to trade above neutral lines in morning session

Key Indian benchmarks managed to trade above their neutral lines in morning session, on account of buying in frontline blue chip counters. Sentiments remained positive as the Ministry of Corporate Affairs has extended the duration of several schemes till 31.12.2020 in view of the continued disruption caused due to the COVID-19 pandemic in certain parts of the country and to provide greater Ease of Doing Business. Some support also came as the Reserve Bank of India (RBI) has decided to extend by six months the enhanced borrowing facility provided to banks to meet liquidity shortage till March 31, 2021 amid the ongoing economic woes created by the coronavirus pandemic. However, gains remain capped as domestic rating agency ICRA has further revised down its Gross Domestic Product (GDP) estimate for the country and now expects the Indian economy to contract by 11 percent in FY21. Meanwhile, seeking to make fund-raising easier, markets regulator Sebi has provided relaxations to REITs and InvITs for preferential and institutional placement of their respective units.

On the global front, Asian markets were trading mostly in green, tracking strong overnight gains in the U.S and European markets as investors cheered signs that U.S. lawmakers are moving toward new fiscal stimulus.  Back home, on the sectoral front, select telecom stocks were trading in green as outgoing TRAI chief RS Sharma said the telecom sector, backed by strong demand for services and its ability to adapt swiftly to changes even amid disruptions, has a bright future ahead.

The BSE Sensex is currently trading at 38063.18, up by 81.55 points or 0.21% after trading in a range of 37995.83 and 38235.94. 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 0.08%, while Small cap index was up by 0.09%.

The top gaining sectoral indices on the BSE were IT up by 1.44%, Metal up by 1.09%, Energy up by 1.03%, TECK up by 0.89% and Auto up by 0.63%, while Telecom down by 2.34%, Bankex down by 1.12%, PSU down by 0.78%, Utilities down by 0.67% and FMCG down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.90%, Infosys up by 1.44%, Tata Steel up by 1.33%, Reliance Industries up by 1.25% and Asian Paints up by 1.17%. On the flip side, Indusind Bank down by 3.32%, Bharti Airtel down by 2.51%, ONGC down by 1.88%, ICICI Bank down by 1.83% and Axis Bank down by 1.74% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has decided to extend by six months the enhanced borrowing facility provided to banks to meet liquidity shortage till March 31, 2021 amid the ongoing economic woes created by the coronavirus pandemic. The RBI, as a temporary measure, had increased the borrowing limit for scheduled banks under the marginal standing facility (MSF) scheme from 2 per cent to 3 per cent of their Net Demand and Time Liabilities (NDTL) with effect from March 27, 2020.

The facility, which was initially available up to June 30, 2020 was later extended up to September 30, 2020 in view of the disruptions caused by the COVID-19 pandemic. With a view to providing comfort to banks on their liquidity requirements as also to enable to continue to meet LCR requirements, it has been decided to continue with the MSF relaxation for a further period of six months, i.e., up to March 31, 2021.

RBI said this dispensation provides increased access to funds to the extent of Rs 1.49 lakh crore, and also qualifies as High-Quality Liquid Assets (HQLA) for the Liquidity Coverage ratio (LCR). Under the MSF, banks can borrow overnight at their discretion by dipping into the Statutory Liquidity Ratio (SLR). The marginal standing facility rate currently stands at 4.25 per cent.

The CNX Nifty is currently trading at 11265.60, up by 38.05 points or 0.34% after trading in a range of 11233.90 and 11305.40. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.16%, TCS up by 2.86%, Hero MotoCorp up by 2.46%, JSW Steel up by 1.75% and Reliance Industries up by 1.48%. On the flip side, Indusind Bank down by 3.09%, Bharti Airtel down by 2.37%, ONGC down by 1.81%, UPL down by 1.66% and ICICI Bank down by 1.56% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 53.80 points or 0.23% to 23,565.42, KOSPI rose 22.82 points or 0.99% to 2,330.90, Jakarta Composite soared 19.82 points or 0.4% to 4,926.37, Shanghai Composite gained 16.86 points or 0.52% to 3,234.39 and Straits Times advanced 14.87 points or 0.6% to 2,497.88.

On the flip side, Taiwan Weighted dropped 12.20 points or 0.1% to 12,450.56 and Hang Seng decreased 57.82 points or 0.25% to 23,418.23.