Benchmarks trade in fine-fettle in early deals; IT index up around 4%

Indian equity benchmarks extended their winning streak for yet another session with optimistic start on Thursday following largely positive global cues. Markets are trading in fine-fettle with gains of over a percent each in early deals. Buying in all in sector indices except Oil & Gas and Consumer Durables. IT stocks were leading with HCL Technologies, TCS and Infosys gaining around 4% each. Sentiments got a boost with the Union health ministry’s statement that the number of people recovered from Covid-19 has exceeded those with active infection by more than 48 lakh as the recovery rate surpassed 85% on Wednesday. Adding more optimism, the chairman of the Standing Committee on Statistics, ministry of statistics and programme implementation Pranob Sen said that the government should continue with the stimulus to revive the economy for three years and it should not be one off. Traders took note of Principal Economic Adviser Sanjeev Sanyal’s statement that the government recognises the need for further stimulus at an appropriate time to perk up demand in the economy, hit by COVID-19.

Global cues remained supportive with most of the Asian markets trading higher as risk appetite improved amid renewed optimism about more US fiscal stimulus. US President Donald Trump said he would support aid to airlines and other stimulus measures, after calling off negotiations over a broader relief package. Meanwhile, the Ministry of Finance said that Japan posted a current account surplus of 2,102.8 billion yen in August, down 1.5 percent on year. The markets in China remain closed for the National Day holiday.

Back home, banking and MSME stocks were in focus as the RBI said the two per cent interest subvention scheme for micro, small and medium enterprises (MSMEs) on loans extended by co-operative banks has been extended till March 31 next year. In scrip specific developments, Tata Consultancy Services surged after posting better-than-expected quarterly numbers and said it expects demand for software services to continue to gain pace. Bharti Airtel rose after it extended a pact with Ericsson for deployment of 5G-ready radio network.

The BSE Sensex is currently trading at 40367.71, up by 488.76 points or 1.23% after trading in a range of 40183.37 and 40383.47. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.78%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were IT up by 3.98%, TECK up by 3.51%, Bankex up by 1.25%, Realty up by 1.14%, Telecom up by 0.81%, while Oil & Gas down by 0.26%, Consumer Durables down by 0.21% were the only losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 4.68%, TCS up by 4.48%, Infosys up by 3.48%, Tata Steel up by 2.35% and Tech Mahindra up by 2.28%. On the flip side, ONGC down by 1.28%, Asian Paints down by 0.84%, Titan Company down by 0.66%, ITC down by 0.62% and Larsen & Toubro down by 0.19% were the top losers.

Meanwhile, the chairman of the Standing Committee on Statistics, ministry of statistics and programme implementation, Pranob Sen has said that the government should continue with the stimulus to revive the economy for three years and it should not be one off. He also said the improvement in economic activity at the moment is due to the pent up demand.

Sen further said ‘what is happening at the moment is due to the pent up demand which has come to the market and has led to certain increase in economic activity.’ He noted that when coronavirus disease (covid-19) pandemic struck India and the lockdown began, there was already a negative momentum in the economy and capacity utilisation had gone down. He stated the government should immediately pay off the dues of the states, beneficiaries of social sector schemes and clean its budget.

Talking about monetization of deficit, he said according to the RBI, the central bank is not in a position to do that. He said a clause was inserted in the RBI Act on monetisation of deficit and the government can only come out with an ordinance to change it. He added that this ordinance will allow RBI to monetize the deficit for a limited period of time, but then there is a fear of rise in inflation.

The CNX Nifty is currently trading at 11875.10, up by 136.25 points or 1.16% after trading in a range of 11820.20 and 11877.85. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Wipro up by 4.74%, HCL Technologies up by 4.64%, TCS up by 4.50%, Infosys up by 3.46% and Tech Mahindra up by 2.36%. On the flip side, GAIL India down by 2.25%, ONGC down by 1.28%, Asian Paints down by 0.94%, Titan Company down by 0.78% and Coal India down by 0.74% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 231.10 points or 0.99% to 23,653.92, Taiwan Weighted jumped 134.35 points or 1.05% to 12,880.72, KOSPI rose 9.54 points or 0.40% to 2,396.48 and Jakarta Composite was up by 23.30 points or 0.47% to 5,027.63. On the other hand, Straits Times fell 1.66 points or 0.07% to 2,536.70 and Hang Seng slipped 189.12 points or 0.78% to 24,053.74.