Bulls dominate bears on Dalal Street; Nifty surpasses 13,100 mark

Tuesday turned out to be a fabulous day of trade for Indian equity benchmarks, where frontline gauges traded jubilantly throughout the day and garnered gains of over a percentage point each. Markets made a cautious start on report that 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. But, soon after a cautious start, key gauges gained traction and started moving northward as signs of recovery in India’s economic growth supported the market sentiments. 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, 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 rally to end near intraday highs, as traders took encouragement 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. Meanwhile, India has reported a significant drop in the number of fresh Covid-19 cases, taking its tally to 9,463,254. The country's death toll stands at 137,659. 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 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.

Global cues too remained supportive with European markets making a positive start after the major averages notched sharp monthly gains for November. Asian markets ended higher 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.

Back home, Goods and services tax collections surpassed Rs one trillion for the second month straight in November. The mop up was Rs 192 crore less at Rs 1.049 trillion in November compared to Rs 1.051 trillion in October. On the sectoral front, stocks related to auto sector remained in limelight reacting to their monthly sales numbers. Banking stocks remained in focus as Moody's Investors Service said the bank capital will moderately fall in emerging Asia over the next two years, with India seeing larger capital decline without further infusion.

Finally, the BSE Sensex rose 505.72 points or 1.15% to 44,655.44, while the CNX Nifty was up by 140.10 points or 1.08% to 13,109.05.

The BSE Sensex touched high and low of 44,730.79 and 44,118.10, respectively and there were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.94%, while Small cap index was up by 0.82%.

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 lone losing index on BSE.

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.

Meanwhile, continuing contracting trend for the eighth consecutive month, 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. In September, the rate of contraction was 0.1 per cent. The ministry of Commerce and Industry in its latest data has showed that the combined Index of Eight Core Industries stood at 124.2 in October, 2020, which declined by 2.5 per cent as compared to the Index of October, 2019. Its cumulative growth during April to October, 2020-21 has been (-) 13.0%. Meanwhile, final growth rate of Index of Eight Core Industries for July 2020 is revised to (-) 7.6%.

Among eight core sectors, Coal production having 10.33 per cent weight increased by 11.6 per cent in October, 2020 over October, 2019. Its cumulative index declined by 3.6 per cent during April to October, 2020-21 over corresponding period of the previous year. Fertilizers production having 2.63 per cent weight increased by 6.3 per cent in October, 2020 over October, 2019. Its cumulative index increased by 4.1 per cent during April to October, 2020-21 over the corresponding period of previous year. Cement production having 5.37 per cent weight increased by 2.8 per cent in October, 2020 over October, 2019. Its cumulative index declined by 21.3 per cent during April to October, 2020-21 over the corresponding period of previous year. Electricity generation having 19.85 per cent weight increased by10.5 per cent in October, 2020 over October, 2019. Its cumulative index declined by 5.6 per cent during April to October, 2020-21 over the corresponding period of previous year.

On the other hand, Crude Oil production having 8.98 per cent weight declined by 6.2 per cent in October, 2020 over October, 2019. Its cumulative index declined by 6.1 per cent during April to October, 2020-21 over the corresponding period of previous year. The Natural Gas production having 6.88 per cent weight declined by 8.6 per cent in October, 2020 over October, 2019. Its cumulative index declined by 12.5 per cent during April to October, 2020-21 over the corresponding period of previous year. Petroleum Refinery production having 28.04 per cent weight declined by 17.0 per cent in October, 2020 over October, 2019. Its cumulative index declined by 16.4 per cent during April to October, 2020-21 over the corresponding period of previous year. Steel production having 17.92 per cent weight declined by 2.7 per cent in October, 2020 over October, 2019. Its cumulative index declined by 22.8 per cent during April to October, 2020-21 over the corresponding period of previous year.

The CNX Nifty traded in a range of 12,962.80 and 13,128.40 and there were 37 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were GAIL India up by 8.09%, Sun Pharma up by 5.66%, Indusind Bank up by 4.94%, Tech Mahindra up by 3.99% and UPL up by 3.85%. On the flip side, Nestle down by 2.56%, Kotak Mahindra Bank down by 1.50%, Titan Company down by 1.30%, Bajaj Finance down by 0.99% and HDFC Bank down by 0.94% were the top losers.

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.