Sensex, Nifty trade in green in late morning deals

Indian equity benchmarks were managing to keep their heads above neutral lines in late morning session, with both Sensex and Nifty trading in green terrain. Positive cues from other Asian markets helped key indices to hold gains. Domestic sentiments got boost after India’s services sector, hit severely by the over two-month long pandemic-induced lockdown, posted expansion in October for the first time since February supported by improved market conditions, with the purchasing managers' index (PMI) for services rising to 54.1 from 49.8 in September. This signals a gradual normalization of business activities after relaxation of lockdown curbs by the government. Note that a reading above 50 indicates expansion, while a sub-50 print signals contraction.

On the global front, Asian markets were trading mostly in green, after China's service sector expanded strongly in October signaling a sustained recovery from the Covid-19 related drops in activity seen earlier in the year. The survey results published by IHS Markit showed that the Caixin services Purchasing Managers' Index advanced to 56.8 in October from 54.8 in the previous month. A score above 50 indicates expansion in the sector. The sector posted its second fastest growth for over a decade, driven by a substantial rise in new work. However, new work from overseas markets declined further due to the resurgence of Covid-19 cases across a number of export markets.

The BSE Sensex is currently trading at 40498.87, up by 237.74 points or 0.59% after trading in a range of 40107.96 and 40660.22. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.32%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were IT up by 2.05%, TECK up by 1.75%, Healthcare up by 1.71%, Capital Goods up by 1.22% and Consumer Durables up by 1.08%, while Realty down by 1.35%, Utilities down by 0.64%, Power down by 0.60%, Bankex down by 0.60% and PSU down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 6.58%, Indusind Bank up by 4.28%, Infosys up by 2.45%, TCS up by 2.30% and Nestle up by 2.24%. On the flip side, Axis Bank down by 2.74%, ICICI Bank down by 2.25%, Power Grid down by 1.78%, HDFC down by 1.46% and Bharti Airtel down by 0.12% were the top losers.

Meanwhile, Economic Affairs Secretary Tarun Bajaj has said that Finance Minister Nirmala Sitharaman will soon announce the next set of stimulus package to boost the coronavirus-hit economy. He added that the Finance Ministry is looking into suggestions and requests received from various sectors of the economy. He said ‘We are actually discussing that. It is difficult for me to commit a date but we have received a lot of requests and comments from various sectors and we are looking into it. Very soon it will be unveiled. The finance minister will come out and speak to you on that’.

The finance minister last month had announced a slew of measures to spur demand and ramp-up capital expenditure. This was the third stimulus package since the outbreak of the COVID-19 pandemic. The government had announced a Rs 1.70 lakh crore Pradhan Mantri Garib Kalyan Yojana (PMGKP) in March to protect the poor and vulnerable sections from the impact of COVID-19 crisis. It was followed by the Aatmanirbhar Bharat Abhiyan package of Rs 20.97 lakh crore in May, largely focussed on supply-side measures and long-term reforms. The finance minister last month had said the option for another stimulus package has not been closed.

Terming elevated food prices a temporary phenomenon, Bajaj said it should be back to normal soon on the back of arrival of new crops and government measures for improving supply of essential commodities. Some commodities like onion, potato and tomato are as costly as Rs 100 per kg, much higher than the average price. He said ‘I think this should be temporary in our view... There is actually a difference between the WPI and the CPI. So, that itself shows that this should be something to do with logistics and with good agricultural season that is coming and the new crop with us we are hoping that this should cool down’. Nevertheless, he said agriculture and consumer affairs ministries have also announced some steps to cool down the prices.

On the recovery, Bajaj said India continues to see an uptick in the economy for the past few months since the unlock began and there would be further improvement in the months to come. He added ‘We are actually seeing an improvement in all parameters generally and we are expecting further improvement in the month of November and this should continue. Hopefully the economy should be back on rails and it is moving much faster than what had been anticipated by a lot of experts and economists’.

The CNX Nifty is currently trading at 11877.65, up by 64.15 points or 0.54% after trading in a range of 11777.70 and 11920.70. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 6.66%, Indusind Bank up by 3.93%, Wipro up by 2.99%, Divis Lab up by 2.59% and Infosys up by 2.40%. On the flip side, UPL down by 3.49%, Axis Bank down by 3.00%, ICICI Bank down by 2.46%, Power Grid down by 1.78% and HDFC down by 1.58% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 463.10 points or 1.99% to 23,758.58, Taiwan Weighted strengthened 107.09 points or 0.84% to 12,843.10, KOSPI rose 15.11 points or 0.64% to 2,358.42, Straits Times advanced 19.75 points or 0.79% to 2,516.97, Shanghai Composite gained 0.99 points or 0.03% to 3,272.06 and Jakarta Composite soared 6.70 points or 0.13% to 5,166.15. On the flip side, Hang Seng decreased 6.25 points or 0.03% to 24,933.48.