Firm trade persists on Dalal Street

Indian stock markets continued to trade in positive terrain in the afternoon session due to buying in energy, consumer durables and auto stocks. Buying in frontline stocks such as Titan Company, Yes Reliance Industries and Ultratech Cement were aiding sentiments. Traders were optimistic 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. Meanwhile, according to a private report, Indian bankers fear the government's decision to waive some interest payments on loans under a COVID-19 support plan will create unnecessary work for lenders and lead to more litigation, without providing much of a boost for the sagging economy.

On the global front, Asian markets were trading mixed as after US President Donald Trump calls to end fiscal stimulus talks until after the November election. Back on Dalal Street, in scrip specific developments, ABB India jumped on launching LV motors on its e-commerce marketplace and Titan Company shined as its arm to introduce light weight jewellery to attract customers.

The BSE Sensex is currently trading at 39845.29, up by 270.72 points or 0.68% after trading in a range of 39450.82 and 39903.73. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.46%, while Small cap index was down by 0.17%.

The top gaining sectoral indices on the BSE were Energy up by 2.82%, Consumer Durables up by 2.09%, Auto up by 0.45%, FMCG up by 0.40% and Consumer Discretionary was up by 0.39%, while Metal down by 2.40%, Realty down by 1.58%, Capital Goods down by 1.21%, Power down by 0.93% and Industrials was down by 0.92% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 4.84%, Reliance Industries up by 3.59%, Ultratech Cement up by 3.34%, ONGC up by 2.24% and Bajaj Auto was up by 2.09%. On the flip side, Bajaj Finance down by 4.21%, Sun Pharma down by 1.88%, Bajaj Finserv down by 1.63%, Larsen & Toubro down by 1.55% and Power Grid Corporation was down by 1.41% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that the US withhold release order on cotton and apparel imports from specific producers in Xinjiang Uygur Autonomous Region (XUAR) might escalate global trade tensions and thus have negative implications on Indian textile sector in the short run. However, Ind-Ra said it could be beneficial in the medium term.

According to the report, there is a risk of further sanctions by the US government on curbing imports of the products originating from or having linkages with XUAR. Furthermore, it said importers in the US are likely to be concerned about any economic, legal or reputational concerns on any of their supply chains linked to XUAR. It noted that this action may have spooked China and it could resort to retaliatory measures. It added that cotton procurement from the United States could be delayed by Chinese mills, leading to favourable supplies from Brazil and India -- both of which are likely to have high inventories.

The report further said while demand from the United States could impact overall cotton demanded by China, the value-addition could gradually move out of China to other geographies. However, it said this is more of a medium term-phenomenon. Indian yarn players have high export dependence on China (FY16 to FY19: around 30 percent) which reduced to around 20 percent for the three months ended June on account of lower demand and growing competition from Vietnam and Pakistan.

The CNX Nifty is currently trading at 11726.10, up by 63.70 points or 0.55% after trading in a range of 11629.35 and 11747.85. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 4.87%, Reliance Industries up by 3.56%, Ultratech Cement up by 3.19%, Bajaj Auto up by 2.30% and ONGC was up by 2.24%. On the flip side, Bajaj Finance down by 4.18%, Tata Motors down by 2.90%, Hindalco down by 2.60%, Sun Pharma down by 1.88% and BPCL was down by 1.78% were the top losers.

Asian markets were trading mixed; Straits Times advanced 10.00 points or 0.4% to 2,539.26, KOSPI rose 21.04 points or 0.89% to 2,386.94, Taiwan Weighted strengthened 42.14 points or 0.33% to 12,746.37 and Hang Seng was up by 214.29 points or 0.89% to 24,194.94.

On the flip side; Jakarta Composite lost 24.98 points or 0.5% to 4,974.24 and Nikkei 225 was down by 10.91 points or 0.05% to 23,422.82.