Key gauges extend winning run to fourth day

Extending winning run to fourth day, Indian equity benchmarks clocked significant gains on Tuesday, propped up by Finance, Realty and Banking stocks amid positive global cues. Indian markets made gap-up opening and continued positive momentum for whole day, as traders took encouragement with Commerce Minister Piyush Goyal’s statement Indian exports will automatically increase if the products are good and competitively priced and that products are entrepreneurs should not think that subsidies are the only solution. Some solace also came with IT Minister Ravi Shankar Prasad’s statement that artificial intelligence (AI) has massive potential to generate development and India is well-poised to tap into the opportunity with its large pool of skilled professionals. He also said the proposed data protection legislation will give a big fillip to the country's data economy.  

Domestic indices witnessed a strong rally in the last hour of trade, taking support from the survey report indicated that Indian service sector output broadly stabilized in September. The seasonally adjusted India Services Business Activity Index rose for the fifth straight month in September to 49.8 from 41.8 in August. But, it remained in the contraction zone as incoming new business fell moderately due to the damaging impact of the pandemic on demand, leading to more job losses. Meanwhile, the Centre said it will release Rs 20,000 crore to states on account of GST compensation dues. In the meeting of the 42nd GST Council, Finance Minister Nirmala Sitharaman said the states which received less apportionment of Integrated GST (IGST) for 2017-18, the Centre will next week transfer a cumulative Rs 24,000 crore to them.

On the global front, Asian markets ended mostly higher on Tuesday, as U.S. President Donald Trump's return to the White House from hospital coupled with Joe Biden's increasing lead in weekend polls in the U.S. presidential race helped reduce uncertainties surrounding the 2020 presidential election. Rising optimism that U.S. lawmakers could agree on new stimulus also offered some support as talks between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued. European markets were trading mostly in green, as data from Destatis revealed German factory orders grew at a faster pace in August on robust foreign demand. Factory orders climbed 4.5 percent month-on-month, which was faster than the 3.3 percent rise in July and the 2.6 percent increase economists' had forecast. On a yearly basis, manufacturing orders dropped at a slower pace of 2.2 percent, following a 6.9 percent decrease in July. Back home, on the sectoral front, aviation stocks ended mixed with ICRA’s report that recovery in domestic air passenger traffic continued in September with a sequential growth about 37-39 per cent in passenger volume in the previous month over August. Stocks related to logistics sector were in watch as ratings agency ICRA said that the near-term growth of the Covid-19-battered logistics sector is expected to be driven by specific segments like e-commerce.

Finally, the BSE Sensex rose 600.87 points or 1.54% to 39,574.57, while the CNX Nifty was up by 159.05 points or 1.38% to 11,662.40.

The BSE Sensex touched high and low of 39,623.76 and 39,191.10, respectively and there 24 stocks advancing against 6 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.59%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Finance up by 3.04%, Realty up by 2.41%, Bankex up by 2.06%, Auto up by 1.25% and Consumer Discretionary up by 0.86%, while Metal down by 0.58%, Oil & Gas down by 0.22%, Power down by 0.19%, Capital Goods down by 0.11% and Energy down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 8.35%, Indusind Bank up by 3.44%, Mahindra & Mahindra up by 3.42%, Asian Paints up by 3.16% and Bajaj Finance up by 2.80%. On the flip side, Tata Steel down by 1.26%, Nestle down by 1.00%, Larsen & Toubro down by 0.46%, Sun Pharma down by 0.45% and NTPC down by 0.24% were the top losers.

Meanwhile, Commerce Minister Piyush Goyal has said that Indian exports will automatically increase if the products are good and competitively priced and that entrepreneurs should not think that subsidies are the only solution. He asserted that the country has the capability to become a global player in many sectors, and underscored the need for bolstering manufacturing.

Goyal has stated that sectors having the potential to become globally competitive needed to be identified. He said there is no need to segregate between products for exports and domestic sector. He also said ‘we require quality, good technology and scale, though some support may be needed at times’.

Underscoring the need for ‘bolder ideas’ for signing Free Trade Agreements (FTA), the minister said India could leverage the lower labour cost to promote its products. He also said ‘we need to penetrate the developed world where we can leverage on the lower labour cost or our skills. When we are going to try and export to Africa and Chile, we'll be competing with people who are already very low-cost & low quality.  He said India can surely be part of the global supply chain and also a reliable partner, and added that building capabilities, scale and good manufacturing practices are the need of the hour.

The CNX Nifty traded in a range of 11,680.30 and 11,564.30 and there were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 7.73%, HDFC up by 7.56%, Adani Ports &Special up by 3.53%, Mahindra & Mahindra up by 3.48% and Indusind Bank up by 3.32%. On the flip side, Britannia Industries down by 1.53%, Coal India down by 1.31%, Wipro down by 1.27%, Hindalco down by 1.23% and Tata Steel down by 1.16% were the top losers.

European markets were trading mostly in green; France’s CAC increased 14.86 points or 0.31% to 4,886.73 and Germany’s DAX increased 16.56 points or 0.13% to 12,844.87, while UK’s FTSE 100 decreased 5.05 points or 0.08% to 5,937.89.

Asian markets ended mostly higher on Tuesday as investors' risk appetite was improved by renewed optimism surrounding stimulus negotiations in the United States with reports that US President Donald Trump returned to the White House after being treated for corona virus for three days at the hospital. Data showed the US services sector grew for a fourth consecutive month in September as the country attempts to re-open from earlier corona virus shutdowns, too supported market sentiment. Meanwhile, markets in China were closed for the National Day holiday.