Key indices remain higher in late morning deals

Indian equity benchmarks remained higher in late morning deals, with both Sensex and Nifty holding notable gains. Positive trade continued over the Dalal Street despite negative cues from other Asian markets. The street got relief, as industry body India Cellular and Electronics Association (ICEA) said it has set up a labour, human resource and training committee under Wistron India's Managing Director to work on reforms around labour norms to benefit both employees and employers. The government expects mobile phone manufacturing sector to create around 8 lakh new jobs in the next five years under the production linked incentives (PLI) and associated schemes which promise incentives of up to Rs 50,000 crore to the industry.

On the global front, Asian markets were trading mostly in red, after Malaysia's industrial production rose at a softer rate in August. The data from the Department of Statistics showed that industrial production rose 0.3 percent year-on-year in August, after a 1.2 percent increase in July. The growth in the production was mainly due to the rise in the manufacturing output. Factory output rose 2.4 percent yearly in August, after a 2.9 percent increase in the previous month.

The BSE Sensex is currently trading at 40660.39, up by 66.59 points or 0.16% after trading in a range of 40468.24 and 40786.82. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Basic Materials up by 1.50%, Telecom up by 1.43%, Power up by 1.07%, Realty up by 0.63% and Metal up by 0.61%, while Bankex down by 0.34%, PSU down by 0.30%, Oil & Gas down by 0.28% and Consumer Durables down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 4.31%, Bharti Airtel up by 2.60%, HCL Tech up by 1.85%, Power Grid up by 1.16% and Kotak Mahindra Bank up by 1.10%. On the flip side, ICICI Bank down by 1.78%, Bajaj Finance down by 0.97%, HDFC down by 0.67%, Bajaj Finserv down by 0.46% and SBI down by 0.40% were the top losers.

Meanwhile, with lower output of manufacturing, mining and power generation sectors, industrial production, measured on the basis of Index of Industrial Production (IIP), declined by 8 percent in August. The IIP had contracted by 1.4 percent in August 2019. The data released by the National Statistical Office (NSO) under Ministry of Statistics and Programme Implementation showed that for the month of July 2020, the Quick Estimates of IIP with base 2011-12 stood  at 116.1.

According to the IIP data, manufacturing sector production registered a decline of 8.6 percent, while the output of mining and power segments fell 9.8 percent and 1.8 percent, respectively. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of August 2020 stood at 83.0, 117.4 and 162.7 respectively.

As per Use-based classification, the indices stood at 108.4 for Primary Goods, 75.0 for Capital Goods, 126.6 for Intermediate Goods and 127.7 for Infrastructure/ Construction Goods for the month of August 2020. Further, the indices for Consumer durables and Consumer non-durables stood at 109.4 and 139.6 respectively for the month of August 2020.

The Ministry of Statistics and Programme Implementation said ‘It may not be appropriate to compare the IIP in the post pandemic months with the IIP for months preceding the COVID 19 pandemic’. It added that ‘with the gradual relaxation of restrictions, there has been a relative improvement in the economic activities by varying degrees as well as in data reporting’.

The CNX Nifty is currently trading at 11961.95, up by 31.00 points or 0.26% after trading in a range of 11888.90 and 11988.20. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 4.23%, Shree Cement up by 2.99%, Bharti Airtel up by 2.42%, HCL Tech up by 2.07% and Grasim Industries up by 1.93%. On the flip side, ICICI Bank down by 1.70%, Bajaj Finance down by 1.00%, GAIL India down by 0.95%, Tata Motors down by 0.81% and Indian Oil Corporation down by 0.73% were the top losers.

Asian markets were trading mostly in red; KOSPI fell 6.40 points or 0.27% to 2,397.33, Shanghai Composite declined 9.57 points or 0.28% to 3,348.90, Jakarta Composite lost 15.59 points or 0.31% to 5,077.51 and Taiwan Weighted dropped 49.26 points or 0.38% to 12,906.65. On the flip side, Nikkei 225 surged 28.23 points or 0.12% to 23,586.92, Straits Times advanced 2.32 points or 0.09% to 2,554.74.