Benchmarks trade firm in early deals

Indian equity benchmarks made optimistic start on Tuesday tracking rally in global peers. Markets are trading firm in early deals on the back of buying in all the sector indices except telecom. Sensex and Nifty surpassed 40,100 and 11,750 marks, respectively, with gains of over a percent each. sentiments got a boost with the economic think-tank NCAER's statement that its Business Confidence Index (BCI) rose 41.1 per cent in the July-September 2020 period, indicating signs of improvement. Some support also came in as the Finance Ministry released Rs 6,000 crore as the second tranche to 16 States and three Union territories under its special window to states for meeting the GST compensation cess shortfall. Besides, India has reported a decline in the number of fresh Covid-19 cases to 37,592 in the past 24 hours. The total caseload stands at 8,266,914. The country's death toll has mounted to 123,139.

On the global front, Asian markets were trading higher as upbeat manufacturing activity data from the US, Europe and China helped offset worries about the surge in global coronavirus cases and uncertainty about the outcome of the US presidential election. The Japanese market is closed for a holiday. Back home, the RBI has extended trading hours for currency and rupee markets including forex derivatives, government securities, commercial paper and certificates of deposit by 90 minutes. The revised trading hours for rupee and bond markets are from 10 am to 3:30 pm as per Indian Standard Time as against 2 pm earlier. The revised timings will be effective from November 9, 2020. In scrip specific development, HDFC rallied after its net interest income rose 21 percent year-on-year in the second quarter ended September.

The BSE Sensex is currently trading at 40187.31, up by 429.73 points or 1.08% after trading in a range of 39952.79 and 40188.83. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.81%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Bankex up by 2.21%, Metal up by 1.67%, PSU up by 1.54%, Utilities up by 1.29%, Power up by 1.21%, while Telecom down by 0.65% was the sole losing index on BSE.

The top gainers on the Sensex were ICICI Bank up by 3.51%, SBI up by 2.98%, Indusind Bank up by 2.50%, HDFC Bank up by 2.48% and HDFC up by 2.23%. On the flip side, Bharti Airtel down by 0.92%, Infosys down by 0.36%, Hindustan Unilever down by 0.09% and Ultratech Cement down by 0.04% were the top losers.

Meanwhile, amid the government hiking import duties on a slew of products to help boost local manufacturing, SBI Research in its report has pitched for lowering such levies and said that higher duties will not promote competitive manufacturing but may lead to inefficiency. It noted that since the beginning of 2000, successive governments have been eyeing a quarter of the Gross domestic product (GDP) to come from manufacturing by 2025 but not much has moved in that direction.

As per to the report, between 2004 and 2017, the incremental gain in the country's manufacturing global share is a low 1.5 percentage points to 3 per cent, while China has gained a whopping 18 per cent share. It also noted that even with such a negligible gain, the country is the sixth-largest manufacturing economy globally, controlling 3 per cent of global output. It said ‘if we were to build self-reliance, increasing tariffs is not the way to go. Rather, the focus should be on building the right infrastructure that can help make our manufacturing more efficient, which can make our exports more competitive.’

It further said a mere 1 percent hike in import duties leads to a $2 billion worth decline in imports on average. In the export basket, it said the highest share is of consumer goods, followed by intermediate goods and these two attract the highest tariffs in the import basket, thus making a case against the fact that higher import tariffs have not protected these industries. On the contrary, it said ‘other countries with much lower tariff structures than ours have built strong manufacturing bases, which have helped them in exports. High tariffs are impacting the country's position in global value chains, wherein both backward and forward integration is needed.’

The CNX Nifty is currently trading at 11787.95, up by 118.80 points or 1.02% after trading in a range of 11723.30 and 11796.00. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 3.52%, SBI up by 3.03%, Tata Motors up by 2.90%, HDFC Bank up by 2.49% and BPCL up by 2.41%. On the flip side, Adani Ports & SEZ down by 1.37%, Bharti Airtel down by 0.86%, Infosys down by 0.46%, Ultratech Cement down by 0.17% and Asian Paints down by 0.12% were the top losers.

Asian markets were trading in green; Straits Times rose 32.12 points or 1.31% to 2,475.25, Hang Seng jumped 487.95 points or 1.99% to 24,947.96, KOSPI advanced 39.08 points or 1.70% to 2,339.24, Taiwan Weighted surged 144.82 points or 1.15% to 12,736.13, Jakarta Composite gained 34.84 points or 0.68% to 5,149.96 and Shanghai Composite was up by 36.59 points or 1.13% to 3,261.71.