Barometer gauges maintain gains

Indian stock markets were trading in fine fettle in the afternoon session due to heavy buying in banking, capital goods and industrials sectors. The sentiments were positive with Assocham report that India's economy has shown a remarkable resilience in the last few months, braving the impact of the coronavirus pandemic with lead indicators such as manufacturing PMI and exports returning to growth trajectory. Meanwhile, Reserve Bank of India (RBI) left key interest rates unchanged but signalled more easing ahead to support an economy that it sees contracting 9.5 per cent in the current fiscal. RBI states that it will maintain comfortable liquidity conditions and conduct market operations in the form of outright and special open market operations. It will conduct on tap targeted long-term repo operations (TLTRO) with tenors of up to three years for a total amount of up to Rs one lakh crore at a floating rate linked to the policy repo rate.

On the global front, Asian markets were trading mixed with the cautious outlook on US fiscal stimulus talks and US election uncertainty. Back on street, in scrip specific development, JK Cement surged as its Gujarat unit commences commercial dispatches and Lakshmi Vilas Bank gained on receiving non-binding offer from Clix Group.

The BSE Sensex is currently trading at 40408.23, up by 225.56 points or 0.56% after trading in a range of 40066.54 and 40568.91. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.09%, while Small cap index was down by 0.19%.

The top gaining sectoral indices on the BSE were Bankex up by 1.83%, Capital Goods up by 1.51%, Industrials up by 0.57%, PSU up by 0.49% and Metal was up by 0.45%, while FMCG down by 0.68%, Utilities down by 0.57%, Healthcare down by 0.56%, Telecom down by 0.50%, Consumer Discretionary was down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.52%, HDFC Bank up by 2.48%, ICICI Bank up by 2.46%, Axis Bank up by 2.38% and HDFC was up by 2.24%. On the flip side, Asian Paints down by 1.87%, Ultratech Cement down by 1.35%, Nestle down by 1.22%, Sun Pharma down by 1.20% and Bajaj Auto was down by 1.20% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the performance of auto component makers is likely to remain subdued in Q2 (July-September) of FY21 over the year-ago period, but may witness significant improvement on a sequential basis. For 2020-21, it expects the revenue of auto ancillaries, except tyre segment, to fall by 16-20 percent following the double-digit decline during FY20.

According to the report, tyre manufacturers are expected to perform better, with revenue decline likely to be in the high single-digit. It also said the auto component industry was already impacted by muted demand in FY20, with the industry witnessing 16 months of decline in volumes pre-COVID and was aggravated following the pandemic. However, going forward, it said the industry is expected to register strong growth in FY22, which will result in improved profitability and coverage indicators for most vendors. It noted that during the period FY 2014-19, most auto ancillaries have ploughed back their accruals to deleverage their balance sheet.

ICRA further said that 28 percent of its rated auto component portfolio had availed moratorium, and the need for restructuring will be limited despite eligibility. It has indicated that about 28 percent of its auto component portfolio has availed of the moratorium. Of this, it said 72 percent of the entities that availed moratorium are rated in the investment-grade (BBB category and above). It added that they have availed moratorium primarily to conserve cash in an uncertain environment.

The CNX Nifty is currently trading at 11888.00, up by 53.40 points or 0.45% after trading in a range of 11805.20 and 11935.75. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 3.47%, ICICI Bank up by 2.65%, HDFC Bank up by 2.41%, Axis Bank up by 2.39% and Indian Oil Corporation was up by 1.99%. On the flip side, Grasim Industries down by 2.53%, SBI Life Insurance down by 1.79%, UPL down by 1.59%, Asian Paints down by 1.58% and Tata Motors was down by 1.45% were the top losers.

Asian markets were trading mixed; Nikkei 225 slipped 27.38 points or 0.12% to 23,619.69, Straits Times trembled 1.37 points or 0.05% to 2,541.74 and Hang Seng was down by 113.31 points or 0.47% to 24,080.04.

On the flip side; Jakarta Composite soared 1.11 points or 0.02% to 5,040.25 and Shanghai Composite was up by 55.05 points or 1.71% to 3,273.10.