Post Session: Quick Review

Indian equity benchmarks witnessed strong gaining rally on Tuesday. After a cautious start, indices soon gained momentum, India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on consumer demand bouncing back. Adding more optimism among traders, data from the Department for Promotion of Industry and Internal Trade (DPIIT) showed that FDI inflow rose 15 per cent during the April-September period to $30 billion (Rs 2.2 trillion) as compared to inflows of $26 billion during the same period last fiscal, with India being an attractive destination for foreign funds despite the pandemic.

Markets extended gains in second half of the session, taking support with Fitch Solutions’ statement that after a COVID-19 pandemic-led contraction in consumer spending in 2020, household spending will return to growth in 2021, expanding by as much as 6.6 percent. Sentiments were positive, even after Indian manufacturing sector lost momentum in the month of November, amid slower increases in factory orders, exports, buying levels and output. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - eased to 56.3 in November as against 58.9 in October, although it well above the 50-level that separates growth from contraction.
 
Traders overlooked reports stating that the output of eight core infrastructure sectors dropped 2.5 per cent in October, mainly due to decline in production of crude oil, natural gas, refinery products and steel. The production of eight core sectors had contracted 5.5 per cent in October 2019. The output of eight key sectors is in the negative zone since March. The street also paid no heed towards report that the Union government's fiscal deficit further widened to Rs 9.53 lakh crore, which is nearly 120 per cent of the annual budget estimate, at the end of October of the current financial year. The deficit widened mainly on account of poor revenue realisation.

On the global front, European markets were trading higher after the major averages notched sharp monthly gains for November. Asian markets ended higher on Tuesday, after China's manufacturing sector logged its strongest growth in a decade in November, to indicate a sustained recovery from the Covid-19 outbreak. The survey data from IHS Markit showed that the Caixin manufacturing Purchasing Managers' Index rose to 54.9 in November from 53.6 in October. A score above 50 indicates expansion in the sector. This was the highest score since November 2010. The sector has expanded in each of the past seven months.

The BSE Sensex ended at 44655.44, up by 505.72 points or 1.15% after trading in a range of 44118.10 and 44730.79. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.94%, while Small cap index was up by 0.82%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 3.49%, Telecom up by 2.52%, TECK up by 2.42%, IT up by 2.39% and Oil & Gas up by 2.12%, while Consumer Durables down by 0.16% was the only losing index on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 5.51%, Indusind Bank up by 4.37%, Tech Mahindra up by 3.86%, ONGC up by 3.82% and Bharti Airtel up by 3.46%. On the flip side, Kotak Mahindra Bank down by 1.40%, Nestle down by 1.36%, Titan Co down by 1.21%, Bajaj Finance down by 0.94% and HDFC Bank down by 0.50% were the top losers. (Provisional)

Meanwhile, in order to protect the domestic players and to discourage cheap imports, the commerce ministry has recommended imposition of an anti-dumping duty on imports of a certain type of radial tyres from Thailand. The Automotive Tyre Manufacturers' Association had filed an application before the directorate on behalf of the domestic industry alleging dumping of radial tyres from Thailand.

The ministry's investigation arm -- the Directorate General of Trade Remedies (DGTR), which ensures a level playing field to the Domestic Industry against the adverse impact of the unfair trade practices, has recommended a duty of up to USD 527.08 per tonne on imports of 'new pneumatic radial tyres of rubber for buses and lorries, with or without tubes and/or flaps' from Thailand for five years.

After completing its probe, the DGTR has concluded that the product has been exported to India from Thailand below its normal value which has impacted the domestic industry. The finance ministry will take the final decision to impose the duty, which would give a level-playing field to domestic players in global markets.

The CNX Nifty ended at 13109.05, up by 140.10 points or 1.08% after trading in a range of 12962.80 and 13128.40. There were 36 stocks advancing against 14 stocks declining on the index. (Provisional)

The top gainers on Nifty were GAIL India up by 7.84%, Sun Pharma up by 5.41%, Indusind Bank up by 4.41%, ONGC up by 3.89% and UPL up by 3.67%. On the flip side, Nestle down by 2.63%, Kotak Mahindra Bank down by 1.64%, Titan Co down by 1.48%, NTPC down by 1.00% and Bajaj Finance down by 0.97% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 77.55 points or 1.24% to 6,343.74, France’s CAC increased 40.60 points or 0.74% to 5,559.15 and Germany’s DAX was up by 112.72 points or 0.85% to 13,403.88.

Asian markets ended higher on Tuesday on growing optimism over a corona vaccine after Moderna Inc said it had applied for US emergency authorization for its Covid-19 vaccine. Full results from a late-stage study showed that the Moderna Covid vaccine was 94.1 percent effective with no serious safety concerns. Chinese shares closed higher after data showed Caixin's China general manufacturing purchasing managers' index (PMI) rose to 54.9 in November, the highest level in a decade and compared with 53.6 in October. South Korean shares climbed as upbeat trade and manufacturing data boosted hopes of a faster than expected economic recovery from the corona virus pandemic crisis, while the country's real Gross Domestic Product (GDP) grew 2.1 percent in the July-September period from the previous quarter also offered some support. Japanese shares ended higher despite mixed economic data. The manufacturing sector in Japan continued to contract in November, the latest survey from Jibun bank revealed with a manufacturing PMI score of 49.0 up from 48.7 in October. Separate data showed that the unemployment rate in Japan increased to a seasonally adjusted 3.1 percent in October, in line with expectations and up from 3.0 percent in September.