Sensex, Nifty remain in green terrain

Indian equity benchmarks remained in green terrain, with both Sensex and Nifty trading with marginal gains. Positive cues from other Asian markets helped key indices to remain higher. However, upside remained capped, after The growth of India’s service sector slowed in the month of November, although it remained well above the 50-level that separates growth from contraction, with a further upturn in new work supporting business activity growth and the first rise in employment for nine months. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index fell to 53.7 in November from 54.1 in October. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - eased to 56.3 in November from 58.0 in October.

On the global front, Asian markets were trading mostly higher, after China's service sector expanded strongly in November amid greater customer demand and a sustained recovery in market conditions after the coronavirus disease outbreak. The survey data from IHS Markit showed that the services Purchasing Managers' Index rose to 57.8 in November from 56.8 in the previous month. The rate of growth was the second fastest since April 2010, exceeded only by that recorded in June 2020. New orders climbed the most since April 2010 as export sales grew for the first time since June. Efforts to expand capacity and rising order volumes led companies to increase their staffing levels for the fourth month in a row.

The BSE Sensex is currently trading at 44682.73, up by 64.69 points or 0.14% after trading in a range of 44676.12 and 44953.01. There were 16 stocks advancing against 13 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.59%, while Small cap index up by 0.71%.

The top gaining sectoral indices on the BSE were PSU up by 2.14%, Metal up by 1.75%, Realty up by 1.24%, Utilities up by 1.12% and Power up by 1.07%, while Telecom down by 0.35%, IT down by 0.34% and TECK down by 0.33% were the only losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 4.07%, SBI up by 4.01%, NTPC up by 3.32%, Tata Steel up by 3.28% and Asian Paints up by 2.38%. On the flip side, Ultratech Cement down by 1.42%, HDFC down by 1.34%, Infosys down by 1.26%, Bharti Airtel down by 1.14% and Bajaj Auto down by 1.14% were the top losers.

Meanwhile, ICRA Ratings in its latest report has said that the Indian corporate sector, which gradually returned to normalcy from the second quarter of the current fiscal, is likely to sustain improvement in the third quarter, aided by strong festive demand. During the second quarter, sequential recovery from Q1 FY21 levels was visible across sectors as the lockdown restrictions eased. Some sectors were even able to bounce back to pre-COVID levels and post revenue growth on an annual basis. It said ‘on the demand side, we expect that India Inc would gradually revert to normalcy and would be able to sustain improvements in Q3 FY2021, given the seasonally strong festive season’.

The agency said rural demand continues to be on a positive trend, supported by the normal monsoon, healthy crop outputs, and government support in the form of increased MNREGA allocations, MSME guarantee loans, among others, he said. The recovery is expected to continue to be rural-led, while urban India would gradually catch up. Nevertheless, the sustainability of the recovery, post the ongoing festive season, would remain critical in determining the overall macroeconomic recovery trajectory.

However, it added that the occurrence of a second or third wave of pandemic can reverse the recovery in the absence of a vaccine so far. Icra said its analysis of financial results of 587 companies in the Indian corporate sector (excluding financial sector entities) showed aggregate revenue growing by 34.9 per cent in Q2 from Q1 levels, although it remained lower by 6.5 per cent on a year-on-year basis. The margins too have registered an improvement during the second quarter.

The report said commodity-oriented sectors such as cement, iron and steel and metals and mining sector also reported sequential and y-o-y recovery, supported by firming up of commodity prices as well as volume expansion; and aided by a pick-up in industrial activity. Industrial and infrastructure-oriented sectors, on the other hand, while exhibiting sequential recovery, are yet to reach their year-ago levels, and contracted by 11 per cent and 14 per cent on an annual basis respectively during the second quarter. It further said some sectors like aviation and hotels continue to face challenges, which are expected to persist over a prolonged period. The hotel sector continues to grapple with historically-low occupancy levels, despite some quarantine-related and healthcare staff traffic diverted to hotels.

The CNX Nifty is currently trading at 13140.95, up by 27.20 points or 0.21% after trading in a range of 13139.90 and 13216.60. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 4.06%, SBI up by 3.95%, NTPC up by 3.43%, Tata Steel up by 3.13% and Hindalco up by 2.61%. On the flip side, SBI Life Insurance down by 1.89%, Ultratech Cement down by 1.37%, HDFC down by 1.35%, Infosys down by 1.26% and Bajaj Auto down by 1.23% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 surged 15.68 points or 0.06% to 26,816.66, Straits Times increased 2.87 points or 0.10% to 2,813.82, Hang Seng surged 149.58 points or 0.56% to 26,682.16, Taiwan Weighted advanced 35.51 points or 0.25% to 14,024.65, KOSPI gained 3.64 points or 0.14% to 2,679.54, and Jakarta Composite added 16.38 points or 0.28% to 5,830.37, while Shanghai Composite was down by 3.19 points or 0.09% to 3,446.19.