Domestic indices pare gains in afternoon session

Markets pared initial gains but continued to trade in green in early noon session amid buying in blue chip stocks from across various sectors. Buying in IT, TECK and Power stocks helped markets to trade higher. Sentiments were positive with NITI Aayog CEO Amitabh Kant’s statement that India's massive digital footprint is one of its biggest strengths for Artificial Intelligence (AI) development, and established platforms like Aadhaar, UPI along with massive digital infrastructure create a unique opportunity for this futuristic technology to be leveraged to enhance transparency and improve governance. However, markets trimmed gains, traders were concerned as large parts of Mumbai and its suburbs are facing a power failure, due to which several trains have been held up. The outage, according to the city's electricity supply board, is because of the TATAs incoming electric supply failure. After a widespread power outage in and around Mumbai for over an hour, supply was gradually restored in a few areas.

On the global front, Asian markets were trading mostly higher on expectation over new US coronavirus aid package followed by the comments from President Donald Trump that he is in favour of a broad relief package. Back on street, in scrip specific developments, Adani Gas surged on cutting CNG, PNG prices and Premier Explosives gained on bagging order worth Rs 82.83 crore. 

The BSE Sensex is currently trading at 40541.97, up by 32.48 points or 0.08% after trading in a range of 40541.97 and 40905.49. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.50%, while Small cap index was down by 0.46%.

The top gaining sectoral indices on the BSE were IT up by 1.26%, TECK up by 0.99%, Power up by 0.15% and FMCG was up by 0.03%, while Metal down by 3.99%, Basic Materials down by 1.56%, Oil & Gas down by 1.05%, Auto down by 0.77%, Consumer Discretionary was down by 0.50% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.28%, Infosys up by 1.73%, ITC up by 1.43%, HCL Tech up by 1.20% and TCS was up by 1.00%. On the flip side, HDFC Bank down by 1.80%, Tata Steel down by 1.50%, ONGC down by 1.42%, Indusind Bank down by 1.21% and Bharti Airtel was down by 0.95% were the top losers.

Meanwhile, power producers' total dues owed by distribution firms rose over 37 percent year-on-year to Rs 1.33 lakh crore in August 2020, reflecting stress in the sector. According to portal PRAAPTI (Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators), distribution companies (discoms) owed a total of Rs 96,963 crore to power generation firms in August 2019. The portal was launched in May 2018 to bring in transparency in power purchase transactions between the generators and discoms.

In August 2020, the total overdue amount, which was not cleared even after 45 days of grace period offered by generators, stood at Rs 1,20,439 crore, as against Rs 78,646 crore in the year-ago period. According to the latest data on the portal, total outstanding dues in August increased on month-on-month basis as well. In July 2020, total outstanding dues of discoms stood at Rs 1,30,452 crore. The overdue amount in August 2020 has increased from Rs 1,17,637 crore in July 2020. Power producers give 45 days to discoms for paying bills for the supply of electricity. After that, outstanding dues become overdue and generators charge penal interest on that in most cases.

In order to give relief to power generation companies (gencos), the Centre enforced a payment security mechanism from August 1, 2019. Under this mechanism, discoms are required to open letters of credit for getting power supply. The central government had also given some breathers to discoms for paying dues to power generating companies (gencos) in view of COVID-19-induced lockdown. The government had also waived the penal charges for late payment of dues in the directive.

The CNX Nifty is currently trading at 11922.25, up by 8.05 points or 0.07% after trading in a range of 11898.60 and 12022.05. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Power Grid Corporation up by 2.15%, Infosys up by 1.87%, ITC up by 1.64%, HCL Tech up by 1.38% and TCS was up by 1.10%. On the flip side, JSW Steel down by 3.99%, Tata Motors down by 2.60%, GAIL India down by 2.51%, Tata Steel down by 1.77% and SBI Life Insurance was down by 1.67% were the top losers.

Asian markets were trading mostly in green; KOSPI rose 11.77 points or 0.49% to 2,403.73, Taiwan Weighted strengthened 68.72 points or 0.53% to 12,955.91, Jakarta Composite soared 43.28 points or 0.86% to 5,096.94, Shanghai Composite gained 77.94 points or 2.38% to 3,350.02, Straits Times advanced 13.91 points or 0.55% to 2,546.87 and Hang Seng was up by 549.92 points or 2.28% to 24,669.05. On the flip side; Nikkei 225 was down by 61.00 points or 0.26% to 23,558.69.