Markets trade lower in early deals; Manufacturing PMI data eyed

Indian equity benchmarks made optimistic start on Monday but failed to hold onto the gains and slipped in red territory amid mixed cues from Asian peers. Markets are trading lower in early deals due to selling in Energy, Oil & Gas and IT stocks, while buying in Telecom, Bankex and Power counters kept down side in check. Early optimism came in as traders took encouragement with Ficci President Sangita Reddy’s statement that India's strategy of dealing with the COVID-19 crisis has paid off and the country's economy is set to bounce back and emerge stronger. She said it was time to take bold actions and push the growth agenda vigorously. However, market participants turned cautious with a private report that the pandemic-induced growth contraction and additional spending to support the needy amounting to a little over 2 percent of the economy are likely to push the combined fiscal deficit to 13 percent of GDP this fiscal - nearly double of the past year. Besides, India has reported a daily jump of 46,441 Covid-19 cases, even as the tally has soared to 8,222,231. The country's death toll has mounted to 122,642. Investors are eyeing Markit Manufacturing PMI data for October, slated to be declared later in the day.

On the global front, Asian markets were trading mixed following the weak cues from Wall Street Friday and as data showed China's manufacturing activity continued to expand at a faster rate in October. Investors remained cautious amid worries about the recent spike in coronavirus cases in the US as well as Europe and uncertainty about Tuesday's US presidential election. Back home, auto stocks were in focus reacting to their monthly sales numbers. Banking stocks were in limelight as the Supreme Court gets ready to hear the loan moratorium case. In scrip specific development, Reliance Industries was trading under pressure on posting a 15% drop in September-quarter profit as the coronavirus crisis hammered its oil business, although the Indian conglomerate reaped double-digit revenue growth at its Jio telecom service. Consolidated net profit slipped to Rs 9,567 crore in July-September compared with Rs 11,262 crore a year back.

The BSE Sensex is currently trading at 39467.50, down by 146.57 points or 0.37% after trading in a range of 39407.16 and 39880.46. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.21%, while Small cap index was down by 0.37%.

The top gaining sectoral indices on the BSE were Telecom up by 1.83%, Bankex up by 1.71%, Power up by 1.11%, Utilities up by 0.66%, Realty up by 0.57%, while Energy down by 3.80%, Oil & Gas down by 1.50%, IT down by 1.07%, TECK down by 0.72%, Healthcare down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 5.01%, Indusind Bank up by 4.35%, Bharti Airtel up by 2.78%, NTPC up by 1.48% and SBI up by 1.48%. On the flip side, Reliance Industries down by 4.36%, HCL Technologies down by 2.12%, TCS down by 1.97%, Asian Paints down by 1.57% and Bajaj Auto down by 0.85% were the top losers.

Meanwhile, the Federation of Indian Chambers of Commerce & Industry (FICCI) President Sangita Reddy has said that India's strategy of dealing with the coronavirus disease (covid-19) pandemic has paid off and the country's economy is set to bounce back and emerge stronger. She said it was time to take bold actions and push the growth agenda vigorously. She also said the dilemma for governments across the world was creating a balance between protecting lives and livelihoods. India took the path of a strict lockdown to ramp up health infrastructure and focused on human lives and this strategy has paid off.

Reddy observed that science evolved to give better cures, medical infrastructure was created, supplies like PPEs ramped up and death rate has been contained. She noted that it's clearly time for bold actions on the livelihood front. The recent monetary policy assures that the government and the regulator will do everything it takes to keep the economy afloat. She said ‘let us start pushing our growth agenda vigorously.  As we can see the initial green shoots of recovery have begun’.

She noted that the PMI for manufacturing and services has recovered to 56.8 and 49.8, respectively in September 2020. Besides, there has been a pick-up in e-way bill volumes, improvement in revenue earning freight traffic of major commodities, positive growth in exports, and most significant increase in the September GST collections to almost pre-COVID-19 level. She added that these incremental trends are heartening and need to be sustained, and further initiatives like the consumption vouchers must continue to remain focused on demand generation.

The CNX Nifty is currently trading at 11574.00, down by 68.40 points or 0.59% after trading in a range of 11568.25 and 11697.35. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 4.46%, ICICI Bank up by 3.94%, Bharti Airtel up by 2.85%, SBI up by 1.27% and Axis Bank up by 1.06%. On the flip side, Reliance Industries down by 4.85%, Divis Lab down by 2.46%, UPL down by 2.35%, Eicher Motors down by 2.30% and IOC down by 2.14% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 287.46 points or 1.25% to 23,264.59, Straits Times rose 14.32 points or 0.59% to 2,438.16, Hang Seng jumped 210.98 points or 0.88% to 24,318.40 and KOSPI advanced 21.66 points or 0.96% to 2,288.81. On other hand, Taiwan Weighted plunged 27.11 points or 0.22% to 12,519.23, Jakarta Composite fell 1.06 points or 0.02% to 5,127.17 and Shanghai Composite was down by 1.62 points or 0.05% to 3,222.91.