Local equities extend gains in morning deals

Indian equity benchmarks extended gains and traded over half a percent higher in morning session, on account of buying in frontline blue chip counters. The sentiments were on optimistic note with report that companies garnered more than Rs 1 lakh crore from the capital markets in August, a surge of 64 percent from the preceding month, with private placement of debt instruments emerging as the most preferred route for financing business needs. The funds have been mopped-up mainly for business expansion plans, loan repayments and working capital requirements. Some support also came as Fitch Ratings’ report stated that IT services sector is likely to resume high single-digit revenue growth in 2021-2022 on the back of higher demand for digital transformation after a flattish 2020. However, some cautiousness prevailed as traders awaited corporate earnings from heavyweights and the outcome of a policy review by the RBI due in the coming days. The Reserve Bank of India's Monetary Policy Committee will to begin a three-day review later in the day. The central bank is widely expected to hold key interest rates at existing levels in the upcoming policy statement, due on October 9, in a bid to tackle high inflation. Tata Consultancy Services (TCS) - the country's largest IT company - will kick of the earnings season by reporting its financial results for the July-September period.   

On the global front, Asian markets were trading mixed, after U.S. President Donald Trump abandoned Covid-19 relief talks with congressional Democrats, saying they won't resume until after the election. Back home, on the sectoral front, stocks related to textile sector were in focus as India Ratings and Research (Ind-Ra) said the US withhold release order on cotton and apparel imports from specific producers in Xinjiang Uygur Autonomous Region (XUAR) may escalate global trade tensions and thus have negative implications on Indian textile sector in the short run. However, it could be beneficial in the medium term.

The BSE Sensex is currently trading at 39827.32, up by 252.75 points or 0.64% after trading in a range of 39450.82 and 39862.26. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.34%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Energy up by 3.01%, Consumer Durables up by 1.64%, Oil & Gas up by 0.84%, Auto up by 0.73% and Consumer Discretionary up by 0.47%, while Power down by 0.82%, Metal down by 0.80%, Capital Goods down by 0.78%, Realty down by 0.66% and Industrials down by 0.51% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Co up by 4.28%, Reliance Industries up by 3.66%, ONGC up by 2.67%, Maruti Suzuki up by 1.63% and Ultratech Cement up by 1.30%. On the flip side, Bajaj Finance down by 3.85%, Bajaj Finserv down by 1.59%, Indusind Bank down by 0.90%, Infosys down by 0.83% and Power Grid down by 0.83% were the top losers.

Meanwhile, according to data available with the markets regulator Securities and Exchange Board of India (SEBI), Companies have raised a total of Rs 1.1 lakh crore in August 2020 as compared to Rs 66,915 crore in July 2020 by way of issuing equity and debt securities. Out of the cumulative Rs 1.1 lakh crore garnered in August, Rs 58,419 crore was mopped up from private placement of debt securities and Rs 45,471 crore through private placement of equity, which include qualified institutional placement (QIP) and preferential allotment routes.

A total of Rs 42,725 crore and Rs 2,746 crore were raised through QIP and issuance of shares on preferential allotment basis, respectively. In comparison, corporates had mobilised just Rs 2,882 crore from private placement of equities in July. The funds have been mopped-up mainly for business expansion plans, loan repayments and working capital requirements.

When it comes to raising funds through public issuance in August, Rs 6,096 crore was raised through rights issue and Rs 11.5 crore by SMEs' initial share-sales. There was no public issue of corporate bonds in the month of August 2020. However, during July 2020, there was one public issue of corporate bonds amounting to Rs 160 crore.

The CNX Nifty is currently trading at 11728.75, up by 66.35 points or 0.57% after trading in a range of 11629.35 and 11737.60. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Titan Co up by 4.31%, Reliance Industries up by 3.74%, ONGC up by 3.10%, UPL up by 2.28% and Maruti Suzuki up by 1.58%. On the flip side, Bajaj Finance down by 3.81%, Bajaj Finserv down by 1.62%, Tata Motors down by 1.42%, Indusind Bank down by 1.07% and JSW Steel down by 0.96% were the top losers.

Asian markets were trading mixed; Hang Seng increased 111.32 points or 0.46% to 24,091.97, Taiwan Weighted strengthened 59.43 points or 0.47% to 12,763.66 and KOSPI rose 15.00 points or 0.63% to 2,380.90. On the flip side, Straits Times trembled 1.48 points or 0.06% to 2,527.78, Jakarta Composite lost 31.57 points or 0.63% to 4,967.65 and Nikkei 225 slipped 45.96 points or 0.2% to 23,387.77.