Indian equities rise for third straight session

Rising for the third straight session, Indian equity benchmarks ended Monday’s session with gains of over half a percent each, propelled by IT, TECK and Metal counters amid positive cues from Asian markets. Key gauges started the session on a high note, as traders got encouragement with Finance Ministry’s report that important structural reforms undertaken by the government to combat risks associated with the coronavirus pandemic will strengthen the country's economic fundamentals and ensure long-term sustained growth. Additional support also came with a report stated that the CEOs of top 115 companies who met at CII's National Council earlier this week indicated a revival of business sentiment and a gradual rise in expected corporate performance in a poll, raising hopes that a steady recovery of India's economy is on the anvil.

However, domestic indices gave up most of initial gains to come off intraday high point in late afternoon session, as traders turned anxious with report that snapping their three-month buying spree, overseas investors turned net sellers in Indian markets in September due to uncertainty ahead of the US presidential polls and surging coronavirus cases. Some concern also came as the National Bank for Agriculture and Rural Development (Nabard) in its latest data report has showed that regional rural banks (RRBs) as a group reported net loss of Rs 2,206 crore in the fiscal year ended March 31, 2020 (FY20), as against Rs 652 crore net loss in FY19.

But, Indian equities regained some traction in late hour of trade to end higher, as some optimism remained among traders with the Commerce Ministry in its latest data has showed that India’s merchandise exports snapped six-month losing streak and grew by 5.27 percent to $27.4 billion in September 2020 as compared to $26.02 billion in the same month a year ago. Traders also found some solace  with Commerce and Industry Minister Piyush Goyal’s statement that quality, technology and scale of production -- not government subsidies -- will help India take its annual exports to $1 trillion. He exhorted exporters and the industry as a whole to target $1 trillion worth of shipments. He said there is a need to identify areas where sensible policies can help take exports to $1 trillion.

On the global front, Asian markets ended higher on Monday, as reports of U.S. President Donald Trump's improving health eased some of the political uncertainty surrounding the U.S. presidential election in November. Optimistic statements by key U.S. officials related to the new $2.2 trillion stimulus proposal also helped underpin investor sentiment. Some support also came as the latest survey from IHS Markit showed that the services sector in Australia moved into expansion territory in September, with a seasonally adjusted services PMI score of 50.8, up from 49.0 in August.  However, the latest survey from Jibun Bank showed the services sector in Japan continued to contract in September, albeit at a slower pace with a seasonally adjusted services PMI score of 46.6, up from 45.0 in August. European markets were trading higher, as Eurostat data revealed Eurozone retail sales grew 4.4 percent month-on-month in August, in contrast to a 1.8 percent fall in July due to relaxation of the coronavirus containment measures. Economists had forecast a monthly growth of 2.4 percent.

Finally, the BSE Sensex rose 276.65 points or 0.71% to 38,973.70, while the CNX Nifty was up by 86.40 points or 0.76% to 11,503.35.

The BSE Sensex touched high and low of 39,263.85 and 38,819.89, respectively and there 14 stocks advancing against 15 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended mixed; the BSE Mid cap index fell 0.18%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were IT up by 4.06%, TECK up by 3.23%, Metal up by 2.31%, Healthcare up by 1.44% and Bankex up by 0.65%, while Telecom down by 1.28%, Utilities down by 0.51%, Consumer Durables down by 0.47%, Consumer Discretionary down by 0.40% and Energy down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 7.30%, Tata Steel up by 4.71%, Sun Pharma up by 3.23%, Infosys up by 3.00% and Tech Mahindra up by 2.26%. On the flip side, Bajaj Finserv down by 2.70%, Bajaj Finance down by 1.86%, Bharti Airtel down by 1.85%, Bajaj Auto down by 1.27% and Power Grid down by 1.15% were the top losers.

Meanwhile, the monthly economic report prepared by the Economic Affairs Department of the Finance Ministry has said that important structural reforms undertaken by the government to combat risks associated with the coronavirus disease (Covid-19) pandemic will strengthen the country's economic fundamentals and ensure long-term sustained growth. It also said the enabling policy environment and initiatives taken by all stakeholders to seize the available opportunities will actualize the growth potential of the Indian economy.

According to the report, major structural reforms launched by the government in agriculture markets, labour laws and definition of MSMEs provide unparalleled opportunity for the resilient MSME sector to grow and prosper now and thereby, contribute to job creation in the primary and secondary sectors. It also noted that the historic labour reforms, discussed for three decades after the conditionality in the 1991 loan from International Monetary Fund (IMF) but never implemented thus far, will benefit MSMEs to increase employment, enhance labour productivity and thereby wages in MSMEs.

Saying that the reforms in agricultural sector were overdue, the report said the existing laws kept Indian farmers enslaved to the local mandi and their rent-seeking intermediaries. The implementation of 'Aatmanirbhar Bharat' package and unlocking of the economy have ensured that economic recovery in India has gained momentum.

The CNX Nifty traded in a range of 11,578.05 and 11,452.30 and there were 29 stocks advancing against 20 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were TCS up by 7.55%, Wipro up by 7.01%, Tata Steel up by 4.93%, Sun Pharma up by 3.39% and JSW Steel up by 3.17%. On the flip side, Bajaj Finserv down by 2.79%, Shree Cement down by 2.75%, Bharti Airtel down by 1.95%, Bajaj Finance down by 1.83% and GAIL India down by 1.75% were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 41.70 points or 0.71% to 5,943.82, France’s CAC increased 34.94 points or 0.72% to 4,859.82 and Germany’s DAX increased 83.51 points or 0.66% to 12,772.55.

Asian markets ended higher on Monday as investors were encouraged by positive reports about US President Donald Trump’s health after he was hospitalized for corona virus, eased some of the political uncertainty surrounding the US presidential election in November. Further, optimistic statements by US officials related to the new $2.2 trillion stimulus proposal also supported investors' sentiment. Hong Kong-listed shares of Semiconductor Manufacturing International Corporation, China’s largest chipmaker declined after the firm announced Sunday it has undertaken preliminary exchanges with the US Bureau of Industry and Security on export restrictions. Meanwhile, the markets in China remain closed for the National Day holiday.