Benchmarks trade firm in early deals; Nifty surpasses 12,850 mark

Indian equity benchmarks made optimistic start on Tuesday tracking gains in global markets amid COVID-19 vaccine hopes. US-based biotechnology firm Moderna Inc said its vaccine candidate has been found to be 94.5 percent effective in preventing COVID-19, based on Phase 3 trials. Domestic markets are trading firm with gains of over half a percent each in early deals on the back of buying in Metal, Telecom and Capital Goods. Sentiments got a boost with a private report that the Indian economy is seen recovering faster than expected and the Reserve Bank is likely to have come to an end of the rate easing cycle. Though, gains remained capped with government data showing that India's exports fell 5.12 per cent to $24.89 billion in October, after recording positive growth in September, on account of drop in shipments of petroleum products, gems and jewellery, leather and engineering goods. Besides, trade deficit in October narrowed to $8.71 billion as against $11.75 billion in the corresponding month a year ago. Also, the wholesale price-based inflation rose to an eight-month high of 1.48 percent in October, as manufactured products turned costlier. The WPI inflation was 1.32 percent in September and zero percent in October last year.

On the global front, most of the Asian markets were trading higher on record closing highs overnight on Wall Street, as more upbeat news on the coronavirus vaccine front was offset by worries about the continued surge in coronavirus cases worldwide. Moderna said data from a late-stage trial showed its coronavirus vaccine candidate was more than 94 percent effective in preventing infection. Back home, aviation stocks were in focus as Civil aviation minister Hardeep Singh Puri said that domestic aviation operations reached a new high on occasion of Diwali as 2,25,097 passengers flew on 1,903 flights. In scrip specific development, Tata Steel jumped after it reported better-than-expected earnings for the September quarter. On other hand, ONGC was marginally lower on reporting a 54.6 percent decline in its Q2 standalone net profit.

The BSE Sensex is currently trading at 43939.75, up by 301.77 points or 0.69% after trading in a range of 43851.37 and 44161.16. There were 21 stocks advancing against 8 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.64%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were Metal up by 2.34%, Telecom up by 1.64%, Capital Goods up by 1.55%, Industrials up by 1.34%, Bankex up by 1.22%, while IT down by 0.80%, Healthcare down by 0.76%, TECK down by 0.52%, Oil & Gas down by 0.29%, Consumer Durables down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 5.47%, SBI up by 2.72%, HDFC Bank up by 2.59%, Indusind Bank up by 2.51% and Mahindra & Mahindra up by 1.78%. On the flip side, HCL Technologies down by 1.53%, Infosys down by 1.08%, Bajaj Auto down by 0.92%, Tech Mahindra down by 0.86% and TCS down by 0.50% were the top losers.

Meanwhile, Fitch Solutions in its latest report has said that India's third tranche of stimulus measures (Stimulus 3.0) should support economic rebound over the coming quarters but the actual fiscal impact is difficult to ascertain. It also noted that the country’s fiscal deficit is likely to be 7.8 percent of the GDP in the Fiscal Year'21 (April 2020 to March 2021). It also said the Production-Linked Incentive (PLI) scheme, for instance, spans across a five-year period, and their fiscal impact will likely only be seen from FY2021-22 onward.

Estimating using the outright fiscal outlays from this announcement, the report said ‘Stimulus 3.0' appears to suggest additional expenditure of Rs 1 lakh crore (0.44 per cent of FY2019/20 GDP). Moreover, it said the announcement did not outline any additional borrowing to finance these additional spending, which suggests a reallocation of FY2020/21 budget expenditure plans instead.

Recently, the government has announced another stimulus package, called Aatmanirbhar Bharat Abhiyaan 3.0, totaling Rs 2.65 lakh crore. The package included a boost to formal employment, the Production Linked (PLI) Scheme, an increase in the fertiliser subsidy and the rural employment programme, MGNREGA. Exactly a month after the 'Aatmanirbhar Bharat Abhiyaan 2.0' package – which included announcements regarding consumption and investment – was announced on October 12, the central government came out with its third round of stimulus package.

The CNX Nifty is currently trading at 12863.10, up by 82.85 points or 0.65% after trading in a range of 12838.10 and 12934.05. There were 33 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Tata Steel up by 5.87%, Tata Motors up by 2.99%, SBI up by 2.94%, HDFC Bank up by 2.72% and Hindalco up by 2.46%. On the flip side, BPCL down by 3.55%, Hero MotoCorp down by 2.38%, Dr. Reddy’s Lab down by 1.73%, HCL Technologies down by 1.48% and Cipla down by 1.40% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 rose 24.14 points or 0.09% to 25,931.07, Straits Times jumped 27.35 points or 1.00% to 2,775.35, Hang Seng gained 28.72 points or 0.11% to 26,410.39, Taiwan Weighted surged 94.95 points or 0.70% to 13,646.78, KOSPI added 4.55 points or 0.18% to 2,547.58 and Jakarta Composite soared 54.62 points or 0.99% to 5,549.49, while Shanghai Composite was down by 6.65 points or 0.20% to 3,340.32.