Markets trade higher in early deals tracking Asian peers

Indian equity benchmarks made gap-up opening on Monday tailing the Asian cues coupled with hopes in vaccine developments. Markets are trading higher with notable gains in early deals on account of buying in Energy, Oil & Gas and Utilities counters. Though, selling in Telecom, Consumer Durables and Auto stocks kept upside in check. Sentiments got a boost with Industry body FICCI's latest quarterly survey on manufacturing showing that India's manufacturing sector is poised to witness recovery in the July-September quarter, even as hiring outlook for the segment remains bleak. The proportion of respondents reporting higher output during July-September rose to 24 per cent, as compared to 10 per cent in the previous quarter. Some support also came in with report that Foreign Portfolio Investors (FPI) have continued to buy domestic equities and debt instruments. So far in November FPIs have bought Rs 44,378 crore worth of stocks and Rs 5,175 crore worth of debt.  However, rising coronavirus cases kept investors little cautious. The total confirmed case count in India has now crossed 9.1 million. On Sunday, India reported 44,404 fresh Covid-19 cases, taking its tally to 9,140,312. The country's death toll has mounted to 133,773.

On the global front, most of the Asian markets were trading higher amid optimism about the development of coronavirus vaccines and a quick economic recovery lifted the markets. The Japanese market is closed for the Labor Thanksgiving Day. Back home, banking-related stocks and financials were in focus, after the RBI panel recommended several changes in the banking industry which includes proposals to raise promoters cap to 26 per cent from current 15 per cent in 15-year period and to allow large corporate houses as promoters of banks or take a significant stake in banks. In scrip specific development, Reliance Industries rallied after the Competition Commission of India cleared its bid to buy Future group's retail, wholesale and logistics assets.

The BSE Sensex is currently trading at 44035.83, up by 153.58 points or 0.35% after trading in a range of 43948.39 and 44271.15. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index jumped 0.95%, while Small cap index was up by 0.92%.

The top gaining sectoral indices on the BSE were Energy up by 1.82%, Oil & Gas up by 1.47%, Utilities up by 1.39%, Metal up by 1.31%, Power up by 1.27%, while Telecom down by 0.13%, Consumer Durables down by 0.12%, Auto down by 0.09%, Bankex down by 0.04%, Consumer discretionary down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.35%, Bajaj Finserv up by 2.92%, Reliance Industries up by 2.04%, ONGC up by 1.75% and NTPC up by 1.74%. On the flip side, HDFC down by 1.65%, Mahindra & Mahindra down by 1.54%, Kotak Mahindra Bank down by 0.80%, Asian Paints down by 0.67% and Titan Company down by 0.64% were the top losers.

Meanwhile, Fitch Ratings has said that the government's coronavirus pandemic-driven renewed reform agenda has the potential to raise India's medium-term growth rate. Nevertheless, it said there are also downside pressures to growth and it will take time to assess whether the reforms are implemented effectively. It also noted that raising medium-term growth rates under these circumstances will require reforms to support investment and boost productivity and it will take time to assess whether the reforms are implemented effectively.

According to Fitch, the pandemic will slow medium-term growth, as damaged corporate balance sheets are expected to dampen investment for years. It pointed out that renewed asset-quality challenges in banks and generally fragile liquidity for non-bank financial companies could also constrain growth prospects and jeopardise the stability of the medium-term government debt/GDP trajectory. It stated that several reforms passed by Parliament since the pandemic set in, could lift medium-term growth prospects, including the agricultural reforms to give farmers more flexibility over where to sell their produce. It added that stripping out middle men, as the reform allows, could improve farmer incomes while reducing consumer prices.

It further said the government also intends to privatise some state-owned enterprises, of which more than 200 are owned by the central government and 800 by state governments. It said a wide-ranging privatisation push could be transformative. It also said the process of reforms in India remains especially complex and implementation at times has proven difficult.

The CNX Nifty is currently trading at 12906.30, up by 47.25 points or 0.37% after trading in a range of 12880.45 and 12962.10. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 3.88%, Divis Lab up by 2.56%, Bajaj Finserv up by 2.33%, Reliance Industries up by 2.32% and NTPC up by 2.23%. On the flip side, Tata Motors down by 1.57%, HDFC down by 1.53%, Mahindra & Mahindra down by 1.45%, ICICI Bank down by 0.89% and Axis Bank down by 0.78% were the top losers.

Asian markets were trading mostly higher; Straits Times rose 20.99 points or 0.75% to 2,834.00, Taiwan Weighted jumped 144.99 points or 1.06% to 13,861.43, KOSPI surged 48.64 points or 1.90% to 2,602.14, Jakarta Composite added 49.32 points or 0.89% to 5,620.98 and Shanghai Composite was up by 29.06 points or 0.86% to 3,406.79, while Hang Seng lost 48.37 points or 0.18% to 26,403.17.