Indian indices end higher in volatile trade on Friday

In a volatile session, Indian equity benchmarks ended in green with gains of over half percent each on Friday, tracking gains in index-heavyweights Bajaj Finserv, Titan Company and Bajaj Finance amid largely positive cues from global markets and sustained foreign fund inflow. Benchmarks made positive start, as traders got encouragement with report that investments through participatory notes (P-notes) in the Indian capital market surged to Rs 78,686 crore at October-end, making it the highest level in 14 months, on enhanced global liquidity and measures taken by the government back home. Some support also came as the Reserve Bank announced to conduct simultaneous purchase and sale of government securities under open market operations (OMOs) for Rs 10,000 crore each on November 26. The decision was taken after a review of the current liquidity and financial conditions. However, key gauges cut all of their gains to turn negative in late morning deals, as Global forecasting firm Oxford Economics revised downwards its India growth forecast over the medium term to an average 4.5 per cent over 2020-25, from its pre-pandemic projection of 6.5 per cent. In a research note, it said India's post-COVID-19 scars could be among the worst in the world.

But, market indices once again turned bullish in the last hour of trade, as some optimism remained among traders with Rating agency ICRA’s report stated that the Year-on-Year (YoY) contraction in India’s Gross Domestic Product (GDP) (at constant 2011-12 prices) is expected to narrow appreciably to 9.5 percent in the second quarter of the current fiscal (Q2FY21) from 23.9 percent in Q1FY21, as the economy recovered from the lows of the pandemic-induced lockdown. Some support also came with Prime Minister Narendra Modi’s statement that the belief in democracy, rule of law and freedom is the strength of the partnership between India and Luxembourg. He also said India-Luxembourg's partnership amid the COVID-19 pandemic can be beneficial for the recovery of both the countries. Market participants also took a note of Union IT and Communications Minister Ravi Shankar Prasad’s statement that the government was very keen to promote India as a very big centre of the data economy and would finalise a data protection law very soon.

On the global front, Asian markets ended mostly higher on Friday, amid optimism about potential resumption of negotiations over a new U.S. fiscal stimulus bill.  However, the latest survey from Jibun Bank revealed that the manufacturing sector in Japan continued to contract in November, and at a faster pace, with a manufacturing PMI score of 48.3. That's down from 48.7 in October and was shy of expectations for 49.4. It also moved further beneath the boom-or-bust line of 50 that separates expansion from contraction; the index has been in contraction for 19 straight months. European markets were trading higher, after U.K. retail sales figures surpassed analysts' expectations and health minister Matt Hancock said that coronavirus cases in Britain are starting to flatten as a result of current lockdowns.

Back home, on the sectoral front, healthcare sector stocks were in focus after Niti Aayog Member (Health) V K Paul said India’s overall spending on the health sector is low and the situation must be corrected. Emphasising that there is a need to request both the union and state governments to enhance spending on health, he said the COVID-19 experience will justify an increase in expenditure on health sector. Realty sector stocks too were in watch with Crisil’s report that the financial capital has seen a 1.3 times increase in property registrations on lower duties, but FY21 is going to be a difficult year for the realty sector with primary sales likely to decline by 50 percent in top 10 cities.

Finally, the BSE Sensex rose 282.29 points or 0.65% to 43,882.25, while the CNX Nifty was up by 87.35 points or 0.68% to 12,859.05.

The BSE Sensex touched high and low of 44,013.02 and 43,453.75, respectively and there were 23 stocks advancing against 7 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.22%, while Small cap index was up by 0.77%.

The top gaining sectoral indices on the BSE were Telecom up by 4.73%, Consumer Durables up by 2.77%, Power up by 1.83%, Finance up by 1.44% and TECK up by 1.43%, while Energy down by 2.84% was the lone losing index on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 9.13%, Titan Company up by 5.61%, Bajaj Finance up by 4.05%, Kotak Mahindra Bank up by 3.52% and Bharti Airtel up by 3.18%. On the flip side, Reliance Industries down by 3.72%, Indusind Bank down by 0.94%, Sun Pharma down by 0.87%, ONGC down by 0.69% and Axis Bank down by 0.57% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the Year-on-Year (YoY) contraction in India’s Gross Domestic Product (GDP) (at constant 2011-12 prices) is expected to narrow appreciably to 9.5 percent in the second quarter of the current fiscal (Q2FY21) from 23.9 percent in Q1FY21, as the economy recovered from the lows of the pandemic-induced lockdown. The Central Statistics Office (CSO) will release the GDP data for the second quarter of FY21 on November 27.

Similarly, the report stated that the contraction in the Gross Value Added (GVA) at basic prices is expected to have moderated considerably to 8.5 per cent in the July-September quarter from 22.8 percent in the previous three months. It noted that the ease in GVA would be led by industry to (-) 9.3 percent from (-) 38.1 percent, driven primarily by manufacturing and construction and services to (-) 10.2 percent from (-) 20.6 percent). It also said a substantial recovery in manufacturing and construction is likely to underpin the expected improvement in the performance of the industrial GVA in the second quarter of the current fiscal.

According to the report, various sectors of manufacturing recorded an improvement in demand and volumes in the September quarter although the performance was admittedly uneven. In addition to the continued cost-cutting measures, it said the availability of raw material inventory that had been procured previously at subdued costs, supported the earnings of the manufacturing entities in the just-concluded quarter relative to Q1 FY2021.

The CNX Nifty traded in a range of 12,892.45 and 12,730.25 and there were 33 stocks advancing against 16 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Bajaj Finserv up by 9.27%, Titan Company up by 5.39%, GAIL India up by 4.22%, Bajaj Finance up by 3.98% and Bharti Airtel up by 3.12%. On the flip side, Reliance Industries down by 3.66%, Adani Ports & SEZ down by 1.58%, Indusind Bank down by 1.47%, Axis Bank down by 1.15% and Sun Pharma down by 0.97% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 45.20 points or 0.71% to 6,379.55, France’s CAC increased 39.71 points or 0.73% to 5,514.37 and Germany’s DAX increased 64.64 points or 0.49% to 13,150.80.

Asian markets ended mostly higher on Friday, tracking modest gains at Wall Street overnight as fresh fiscal stimulus hopes boosted risk appetite. Investors remained focused on the latest developments concerning a public spat between the US Treasury and Federal Reserve over emergency lending facilities and the resumption of US fiscal aid talks. Meanwhile, US Pharmaceutical giant Pfizer said that the Covid-19 vaccine developed in partnership with BioNTech was found to be 95% effective in the final analysis of the phase 3 trial too supported market sentiment. Although, surging corona virus cases and chances of fresh restrictions in the United States kept the market under pressure. Japanese shares ended lower after the Tokyo Metropolitan Government raised its virus alert status to its fourth and highest level after daily corona virus cases in Japan hit another record high on Thursday.