Indian equity benchmarks made negative start on Tuesday amid weakness in Asian peers coupled with weak macro-economic data. The government data showed that Industrial production declined by 8% in August, mainly due to lower output of manufacturing, mining and power generation sectors. Also, retail inflation rose to 7.34% in September, mainly on account of higher food prices. But, soon markets wiped out all the losses to enter into green territory and are trading slightly higher in early deals on the back of buying in Basic Materials, Metal and Consumer Durables stocks. Sentiments got a boost as Finance Minister Nirmala Sitharaman announced a Rs 73,000 crore package, including advance payment of a part of wages to central government employees and cash in lieu of LTC, to stimulate consumer demand and investment in the economy damaged by the coronavirus pandemic. Some support came in with Ficci President Sangita Reddy’s statement that there is a need for convergence between self-reliance and globalization.
On the global front, most of the Asian markets were trading lower despite the positive cues overnight from Wall Street reflecting gains by tech stocks and optimism about a new US stimulus bill. Investors turned cautious ahead of the release of earnings results by major US banks this week and as they digested news that Johnson & Johnson's COVID-19 vaccine study has been paused due to an unexplained illness in a study participant. Trading in Hong Kong was suspended due to Typhoon Nangka. Back home, telecom stocks were in focus reacting to the Telecom Regulatory Authority of India's (TRAI) latest telecom subscription data report. Reliance Jio added 3.55 million subscribers in July 2020, while Vodafone Idea lost 3.7 million users. Bharti Airtel added 3.26 million wireless subscribers during the month. In scrip specific developments, Infosys gained a day after it completed the acquisition of Kaleidoscope Innovation. On other hand, Wipro dropped ahead of their quarterly earnings results.
The BSE Sensex is currently trading at 40649.49, up by 55.69 points or 0.14% after trading in a range of 40468.24 and 40696.34. There were 22 stocks advancing against 8 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.20%.
The top gaining sectoral indices on the BSE were Basic Materials up by 1.48%, Metal up by 1.30%, Consumer Durables up by 0.86%, Telecom up by 0.65%, Capital Goods up by 0.55%, while Bankex down by 0.70%, PSU down by 0.32%, Oil & Gas down by 0.22%, Energy down by 0.02% were the few losing indices on BSE.
The top gainers on the Sensex were Ultratech Cement up by 3.45%, Titan Company up by 1.69%, Bharti Airtel up by 1.44%, Asian Paints up by 1.38% and HCL Technologies up by 1.05%. On the flip side, ICICI Bank down by 1.89%, Indusind Bank down by 1.14%, SBI down by 1.13%, Axis Bank down by 0.89% and HDFC Bank down by 0.28% were the top losers.
Meanwhile, in order to stimulate consumer demand and investment in the economy, which has been hit hard by the coronavirus pandemic, Finance Minister Nirmala Sitharaman has announced a Rs 73,000 crore package, including advance payment of a part of wages to central government employees and cash in lieu of leave travel concession (LTC). She said as much as Rs 11,575 crore would be paid as LTC allowance and advance to central government and PSU employees on the condition that they spend on non-essential goods before March 31.
The minister further said states would separately be eligible to get Rs 12,000 crore in 50-year interest-free loans for capital expenditure, while the Union government will spend an additional Rs 2,500 crore toward capital expenditure on roads, defence infrastructure, water supply and urban development. She said all these measures are likely to create an additional demand of Rs 73,000 crore and the proposals would stimulate demand in a fiscally prudent way. She added that the government, which had in May announced a Rs 20 lakh crore 'Aatmanirbhar Bharat' stimulus package, is pushing ahead with a full opening to try to boost the economy ahead of the usually high-spending festival season.
Sitharaman said the government will give its employees income tax-exempt cash vouchers in lieu of their entitled travel allowances this year. This cash will have to be spent on buying goods that attract 12 per cent or more GST -- a condition which eliminates the possibility of the cash being spent on essential items. She noted that Central public sector enterprises and banks will also follow the cue and give cash in place of LTC as travelling during the pandemic is near to impossible. Additionally, she said the government will as a one-time measure give Rs 10,000 salary loan to all its officers and employees as festival advance. These two measures are expected to create a consumer demand of about Rs 28,000 crore.
The CNX Nifty is currently trading at 11965.50, up by 34.55 points or 0.29% after trading in a range of 11888.90 and 11966.25. There were 37 stocks advancing against 13 stocks declining on the index.
The top gainers on Nifty were Ultratech Cement up by 3.28%, Shree Cement up by 2.06%, Titan Company up by 1.73%, Asian Paints up by 1.55% and Bharti Airtel up by 1.43%. On the flip side, ICICI Bank down by 2.07%, GAIL India down by 1.55%, Tata Motors down by 1.10%, Indusind Bank down by 0.97% and SBI down by 0.86% were the top losers.
Asian markets were trading mostly in red; Taiwan Weighted lost 58.02 points or 0.45% to 12,897.89, KOSPI fell 12.21 points or 0.51% to 2,391.52, Jakarta Composite declined 18.23 points or 0.36% to 5,074.87 and Shanghai Composite was down by 9.57 points or 0.28% to 3,348.90, while Nikkei 225 gained 28.93 points or 0.12% to 23,587.62 and Straits Times rose 7.67 points or 0.30% to 2,560.09.
