Domestic markets remain in green in morning deals

Indian equity benchmarks continued to trade in green in morning deals led by gains in index-heavyweights NTPC, Nestle and Ultratech Cement. Traders took support with Prime Minister Narendra Modi’s statement that the Indian economy is getting back on track faster than expected as a timely lockdown and various relief measures announced by the government helped address issues faced by all sections of society and all economic sectors due to the COVID-19 pandemic. Some support also came with Union Minister Nitin Gadkari’s statement that micro, small and medium enterprises (MSMEs) are the backbone of the Indian economy and can help in boosting exports. He said ‘we are giving highest priority for how we can reduce our import and increase our exports’. However, gains remain capped as the government's fiscal deficit rose to Rs 9.14 lakh crore, about 114.8 percent of the annual budget estimate, during the first six months of the current financial year, mainly on account of poor revenue realisation.

On the global front, Asian markets were trading lower, as investors remained cautious due to the surging coronavirus cases in Europe as well as the U.S. and next week's U.S. presidential election. Investors also digested mixed Japanese economic data. Industrial output in Japan climbed a seasonally adjusted 4.0 percent on month in September. That exceeded expectations for a gain of 3.2 percent following the 1.0 percent increase in August. Overall inflation in the Tokyo region of Japan was down 0.3 percent on year in October, in line with expectations following the 0.2 percent increase in September. The unemployment rate in Japan came in at a seasonally adjusted 3.0 percent in September. That was shy of forecasts for 3.1 percent and was unchanged from the August reading.

The BSE Sensex is currently trading at 39896.87, up by 147.02 points or 0.37% after trading in a range of 39636.03 and 39988.25. 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 1.25%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Realty up by 2.09%, Oil & Gas up by 1.91%, PSU up by 1.72%, Metal up by 1.70% and Power up by 1.35%, while Telecom down by 0.20% was the top losing index on BSE.

The top gainers on the Sensex were NTPC up by 2.26%, Nestle up by 1.81%, Ultratech Cement up by 1.79%, HCL Technologies up by 1.79% and ONGC up by 1.71%. On the flip side, Bajaj Finance down by 1.58%, Maruti Suzuki down by 1.46%, Bharti Airtel down by 0.89%, Power Grid down by 0.85% and Kotak Mahindra Bank down by 0.73% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has said that it  would conduct the second Open Market Operations (OMOs) purchase of State Developments Loans (SDLs), aggregating Rs 10,000 crore, on November 5, 2020. The RBI had conducted the first-ever auction under OMOs in SDLs on October 22, 2020.

The RBI said the response was positive, with securities offered for each state being subscribed to, and at yield spreads over central government securities of equivalent maturity at levels which would foster supportive financing conditions for new primary issuances of SDLs.  The BRI had decided to conduct OMOs in SDLs as a special case during the current financial year with an aim to improve liquidity and facilitate efficient pricing.

At present, SDLs are eligible collateral for Liquidity Adjustment Facility (LAF) along with T-bills, dated government securities and oil bonds. The OMOs will be conducted for a basket of SDLs comprising securities issued by states. The RBI will purchase the SDLs through a multi-security auction, using the multiple price method. The result of the auction will be announced on November 5 itself.

The CNX Nifty is currently trading at 11714.40, up by 43.60 points or 0.37% after trading in a range of 11637.20 and 11748.95. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Adani Ports &SEZ up by 4.79%, Indian Oil Corp. up by 3.64%, Coal India up by 3.02%, BPCL up by 2.95% and Grasim Industries up by 2.31%. On the flip side, Maruti Suzuki down by 1.69%, Bajaj Finance down by 1.57%, Eicher Motors down by 1.24%, Bharti Airtel down by 0.89% and Divis Lab down by 0.86% were the top losers.

Asian markets were trading lower; Nikkei 225 slipped 195.16 points or 0.84% to 23,136.78, Taiwan Weighted dropped 47.68 points or 0.38% to 12,615.23, Hang Seng decreased 6.38 points or 0.03% to 24,580.22, Straits Times trembled 5.66 points or 0.23% to 2,445.02, KOSPI fell 28.16 points or 1.21% to 2,298.51 and Shanghai Composite declined 3.28 points or 0.1% to 3,269.45.