Benchmarks trade firm in early deals; Nifty surpasses 12,750 mark

Indian equity benchmarks continued their previous session gaining momentum with positive start on Wednesday led by buying across the board amid positive global cues. Markets are trading firm in early deals, with Sensex and Nifty surpassing their 43,600 and 12,750 levels, respectively. Gains across sectors - led by automobile, Capital Goods and Healthcare shares - pushed the domestic indices higher. Traders took encouragement as the health ministry said the National Expert Group on Vaccine Administration for COVID-19 is in conversation with all vaccine manufacturers, including domestic and foreign ones, a day after Pfizer Inc. and BioNTech SE announced more than 90 per cent efficacy of their potential vaccine for the coronavirus. Support also came as Commerce and Industry Minister Piyush Goyal and Minister of State Hardeep Singh Puri held a virtual dialogue with their UK counterparts to review the progress towards a post-Brexit Enhanced Trade Partnership with Britain, which could lead to a free trade agreement in the future. Meanwhile, India has reported nearly 44,679 fresh Covid-19 cases in the past 24 hours. The total caseload now stands at 8,635,754. The country's death toll has mounted to 127,615.

On the global front, most of the Asian markets were trading higher amid continued optimism that a coronavirus vaccine being developed by Pfizer and BioNTech will enable a quick economic recovery. The optimism helped offset worries about the surge in coronavirus cases worldwide. Back home, telecom stocks were in focus with TRAI data showing that Bharti Airtel added 28.99 lakh users, Reliance Jio added 18.64 lakh users, while Vodafone Idea lost 12.28 lakh users in August. In scrip specific development, Coal India, Aurobindo Pharma and Indiabulls Housing Finance surged ahead of their earnings results.

The BSE Sensex is currently trading at 43609.94, up by 332.29 points or 0.77% after trading in a range of 43347.64 and 43675.59. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.93%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Auto up by 1.86%, Capital Goods up by 1.49%, Healthcare up by 1.46%, Oil & Gas up by 1.40%, Power up by 1.23%, while Consumer Durables down by 0.41%, FMCG down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.53%, Bajaj Finance up by 2.88%, Kotak Mahindra Bank up by 2.84%, SBI up by 2.35% and ONGC up by 1.91%. On the flip side, Hindustan Unilever down by 1.19%, Indusind Bank down by 1.08%, Titan Company down by 0.54%, Power Grid down by 0.54% and Asian Paints down by 0.35% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that states are likely to cut capital outlay on infrastructure by up to 40 percent, with coronavirus disease (covid-19) pandemic severely impacting revenues of state governments, and additional expenditure towards healthcare and public welfare. It noted that major states together had a budgeted capital outlay of over Rs 5.7 lakh crore for 2020-21 as against revised estimate of Rs 5.1 lakh crore in 2019-20.

According to the report, some states could witness a steeper decline depending on the extent of additional borrowings, which is availed. It noted that with covid-19 and the related slowdown in the economic activities, states are staring at a significant decline in their revenues, which in turn could push them to cut down on discretionary expenditure including deferment of capital outlay. Furthermore, it said of the Rs 111 trillion worth infrastructure investments planned under the National Infrastructure Pipeline (NIP), about 40 percent is from state governments.

ICRA has stated that NIP envisages the state’s budgetary outlay on capital investments to be around 1.7 percent of GDP and states are expected to fund 24-26 per cent of the total expenditure under NIP. To bridge the shortfall, it said states’ unconditional borrowing limit has been raised from 3 per cent of gross state domestic product (GSDP) to 4 per cent of GSDP for 2020-21. It added that States also have the option of availing another 1 per cent of the GSDP, but on completing specified reforms.

The CNX Nifty is currently trading at 12762.60, up by 131.50 points or 1.04% after trading in a range of 12656.60 and 12766.40. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.88%, Bajaj Finance up by 3.62%, GAIL India up by 3.49%, Hero MotoCorp up by 3.30% and Kotak Mahindra Bank up by 2.90%. On the flip side, Indusind Bank down by 1.25%, Britannia Industries down by 0.96%, Hindustan Unilever down by 0.93%, Titan Company down by 0.72% and Asian Paints down by 0.50% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 434.61 points or 1.75% to 25,340.20, Taiwan Weighted jumped 119.62 points or 0.91% to 13,201.34, KOSPI soared 26.69 points or 1.09% to 2,479.52, Jakarta Composite rose 43.90 points or 0.80% to 5,506.64 and Shanghai Composite was up by 2.92 points or 0.09% to 3,363.07. On other hand, Straits Times fell 14.72 points or 0.54% to 2,690.28 and Hang Seng lost 20.07 points or 0.08% to 26,281.41.