Local equities continue to trade higher in morning deals

Indian equity markets continued to trade higher in morning deals, on account of buying in front line counters amid favourable global cues. Sentiments remained up-beat with union minister Prakash Javadekar’s statement that the pandemic-hit economy is coming back on rails at more speed than expected. He also said that an increase in rail freight collection, higher goods and services tax mop-up, rise in power demand and improved FDI inflows indicate that the economy was doing better in the second quarter of the current financial year. Some support also came with Director General of Foreign Trade -- Amit Yadav stating that while October data looked promising for exports, the situation will improve further in the coming months due to collaborative efforts of all the stakeholders. On the sectoral front, there was some buzz in auto stocks as ratings agency Icra said Commercial vehicles (CV) volumes are expected to shrink 25-28 per cent this fiscal amid multiple headwinds along with the pandemic impact, and the outlook for the sector remains negative on the back of continuing challenges. 

On the global front, Asian markets were trading higher, following the positive cues overnight from Wall Street as investors continued to await the outcome of the U.S. presidential election. Investors are bracing for the prospects of Joe Biden as President and a divided Congress, which is likely to dim chances of tough financial regulations and higher taxes.

The BSE Sensex is currently trading at 41143.17, up by 527.03 points or 1.30% after trading in a range of 41030.17 and 41282.60. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.27%, while Small cap index was up by 1.29%.

The top gaining sectoral indices on the BSE were Metal up by 2.43%, PSU up by 2.03%, IT up by 2.00%, TECK up by 1.86% and Basic Materials up by 1.79%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Tata Steel up by 4.61%, SBI up by 4.35%, HCL Tech up by 3.54%, Bajaj Finance up by 2.77% and Tech Mahindra up by 2.34%. On the flip side, ONGC down by 0.23% was the lone losers.

Meanwhile, the Finance Ministry in its monthly report has said that Indian economy is poised to recover at a fast pace and reach pre-Covid-19 levels by the end of the year, but also cautioned about the possibility of ‘fatigue with social distancing norms’ triggering a second wave of coronavirus infections. The report for October said the sustained surge of activity levels in India, itself, is a reflection of a relatively more manageable pandemic situation in the country as compared to advanced nations.

It said 'a steady contraction of active Covid-19 cases and a low case fatality rate has instilled measured optimism in India that the worst is behind us'. At the same time, a second wave of the pandemic in advanced nations is a grim reminder of how reality hits back when caution is compromised. It added that ‘From a trickle in not so distant past to now a sea of humanity coming out on the streets, the people of India have embraced the new normal where self-protection is inseparable from economic activity’.

The report further said the continuous improvement in forward-looking RBI indices of consumption and business sentiment for the next year augur hope of a strong economic rebound. It said this is also corroborated by IMF's October 2020 projection of 8.8 per cent real GDP growth of India in FY 2021-22, highest globally. Pointing to the movement of high frequency indicators, the report said October numbers clearly indicate broad-based resurgence of economic activity, notably in healthy kharif output, power consumption, rail freight, auto sales, vehicle registrations, highway toll collections, e-way bills, rebound in GST collections and record digital transactions. Rural consumption has stayed strong, in part helped by sustained MSP (Minimum Support Price) procurement of food grains by government at higher prices.

The CNX Nifty is currently trading at 12073.15, up by 164.65 points or 1.38% after trading in a range of 12027.60 and 12100.85. There were 49 stocks advancing against 1 stocks declining on the index.

The top gainers on Nifty were SBI up by 5.12%, Tata Steel up by 4.54%, Hindalco up by 3.48%, HCL Technologies up by 3.33% and UPL up by 3.15%. On the flip side, Hero MotoCorp down by 0.66% was the lone losers.

Asian markets were trading higher; Hang Seng increased 675.10 points or 2.71% to 25,561.24, Nikkei 225 surged 306.54 points or 1.29% to 24,001.77, Taiwan Weighted strengthened 21.47 points or 0.17% to 12,889.37, KOSPI rose 45.45 points or 1.93% to 2,402.77, Straits Times advanced 54.88 points or 2.18% to 2,570.86, Shanghai Composite gained 28.75 points or 0.88% to 3,306.19 and Jakarta Composite soared 94.49 points or 1.85% to 5,199.69.