Domestic indices trade higher with marginal gains in early deals

Indian equity benchmarks made slightly negative start on Wednesday on weakness in global peers, but soon markets managed to wipeout all the losses. Domestic indices were trading higher with marginal gains in early deals on the back of buying in Telecom, Auto and TECK stocks. Early cautiousness also came in with report that a day after recording the lowest number of fresh Covid-19 cases since July 18, India on Tuesday reported a daily jump of 42,965, even as the tally soared to 7,988,853. Though, some respite came with union finance minister Nirmala Sitharaman’s statement that she expects India to become one of the fastest-growing economies by FY22 with pick-up in demand and manufacturing. Also, Niti Aayog Vice Chairman Rajiv Kumar exuded confidence that India's economic growth would be in positive territory in the second half of this fiscal, and will do even better than a large part of the world in 2021-22.

On the global front, most of the Asian markets were trading lower with investors turning cautious amid worries about the recent spike in coronavirus cases in the US and Europe on global economic growth and on receding hopes for new US stimulus before the presidential election. Back home, investors were tracking the assembly elections in Bihar, where the first phase of voting begins today, as well as the Covid trend. In scrip specific development, Bharti Airtel jumped after the telecom major posted its biggest-ever quarterly consolidated revenue on increased data consumption by those stuck at home during the pandemic.

The BSE Sensex is currently trading at 40565.34, up by 43.24 points or 0.11% after trading in a range of 40406.17 and 40664.35. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.44%, while Small cap index was up by 0.38%.

The top gaining sectoral indices on the BSE were Telecom up by 7.88%, Auto up by 1.35%, TECK up by 1.13%, Capital Goods up by 0.84%, Power up by 0.74%, while Bankex down by 0.60%, Metal down by 0.40%, Realty down by 0.37%, FMCG down by 0.24%, PSU down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 10.00%, Mahindra & Mahindra up by 2.67%, Maruti Suzuki up by 1.32%, Bajaj Finance up by 0.97% and NTPC up by 0.95%. On the flip side, Kotak Mahindra Bank down by 1.87%, HDFC down by 1.17%, Hindustan Unilever down by 0.86%, Titan Company down by 0.78% and ICICI Bank down by 0.70% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that with most basic chemical and petrochemical players having a diverse range of end-user industries, the impact of coronavirus disease (covid-19) slowdown is likely to be moderated. It noted that while the industry may face near-term headwinds, the medium to long-term credit outlook remains stable for the industry.

ICRA has stated that credit profiles of most of its rated basic chemical and petrochemical players are expected to remain resilient in the current financial year (FY21), on account of diversification of products in their portfolio, wide applications of these chemicals and manageable leveraging levels. It pointed out that despite the pronounced decline in revenues and margins in FY21, the credit profile of most incumbents is supported by their large size, strong balance sheets, healthy liquidity and strong financial flexibility.

According to the report, margins will be impacted by a decline in capacity utilisation levels resulting in lower absorption of fixed costs and an increase in overheads such as freight costs this fiscal. However, it said softer crude price and various cost rationalization exercises carried out by companies should provide some offset. In case of petrochemicals, it said demand has been impacted adversely across most products. However, it stated that decline in crude oil prices have strengthened the economics of naphtha-based crackers owing to the significant flattening of the ethylene cash cost curve.

The CNX Nifty is currently trading at 11901.05, up by 11.65 points or 0.10% after trading in a range of 11858.30 and 11929.40. There were 25 stocks advancing against 23 stocks declining, while 2 stocks remain unchanged on the index.

The top gainers on Nifty were Bharti Airtel up by 9.99%, Hero MotoCorp up by 3.88%, Tata Motors up by 3.17%, Mahindra & Mahindra up by 2.34% and UPL up by 1.57%. On the flip side, Kotak Mahindra Bank down by 1.97%, HDFC down by 1.48%, Hindustan Unilever down by 1.11%, ICICI Bank down by 0.82% and Titan Company down by 0.78% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 lost 72.57 points or 0.31% to 23,413.23, Straits Times fell 11.94 points or 0.48% to 2,500.93, Hang Seng slipped 80.34 points or 0.32% to 24,706.85, Taiwan Weighted plunged 55.84 points or 0.43% to 12,819.17 and KOSPI declined 4.23 points or 0.18% to 2,326.61, while Shanghai Composite was up by 5.28 points or 0.16% to 3,259.60.