Domestic markets trade higher with notable gains in early deals

Indian equity benchmarks made positive start on Friday and soon gained traction. Markets were trading firm with gains of over half a percent each in early deals ahead of the Reserve Bank of India's bi-monthly monetary policy to be announced later in the day. The central bank is widely expected to keep interest rates steady in the face of rising inflation and shrinking gross domestic product (GDP). Buying in Utilities, Capital Goods and Industrials stocks also supported the domestic indices. Sentiments also got a boost with the International Monetary Fund’s statement that India's economy, severely affected by the coronavirus pandemic, is gradually recovering. It said 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 percent and held out hopes for further improvement on better consumer demand. Adding more optimism, Finance Minister Nirmala Sitharaman said that India’s economy will return to growth in 2021-22 and higher spending in the budget due in February will lay the foundations for even stronger growth in the next four to five years. Meanwhile, on Thursday, India reported 31,094 fresh Covid-19 cases. Its case tally now stands at 9,564,565. The country's death toll has mounted to 139,102.

On the global front, Asian markets were trading mixed as a bipartisan, $908 billion coronavirus aid plan gained momentum in the US Congress and negotiations over a Brexit trade deal continued, despite differences over fisheries, state aid for companies and rules to resolve disputes. The US markets ended mixed overnight after Pfizer reportedly cut the number of Covid-19 vaccine doses it plans to distribute this year because of supply-chain problems.

Back home, most of the aviation stocks were trading higher with Civil Aviation Minister Hardeep Singh Puri’s statement that the cap on the number of domestic flights that Indian airlines are permitted to operate was increased from 70 per cent to 80 per cent of their pre-COVID levels. In scrip specific development, Tata Power Company soared after it emerged as the winner in bids for two electricity distribution companies (discoms) in Odisha.

The BSE Sensex is currently trading at 44865.57, up by 232.92 points or 0.52% after trading in a range of 44665.91 and 44880.80. There were 24 stocks advancing against 6 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index rose 0.81%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Utilities up by 1.64%, Capital Goods up by 1.63%, Industrials up by 1.59%, Basic Materials up by 1.47%, Auto up by 1.47%, while IT down by 0.27%, Energy down by 0.11%, TECK down by 0.10% were the few losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 4.64%, Larsen & Toubro up by 2.77%, Mahindra & Mahindra up by 2.31%, ONGC up by 1.47% and ICICI Bank up by 1.28%. On the flip side, Asian Paints down by 0.65%, Infosys down by 0.48%, Reliance Industries down by 0.44%, Tech Mahindra down by 0.29% and Sun Pharma down by 0.26% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that India's economy will return to growth in 2021-22 and higher spending in the budget due in February will lay the foundations for even stronger growth in the next four to five years. With the world's second highest cases of coronavirus despite a severe lockdown of its 1.3 billion people early on in the pandemic, India's economy is expected to contract nearly 10% in the 2020/21 financial year. But, she said a recovery is taking hold now.
Sitharaman said ‘I would think 2021-22 will be very big, good traction year for achieving a really good rate of growth that itself is going to be a launching pad for 4-5 years of growing at a good speed, provided we do enough on the budget and spend on infrastructure’.

Unlike other countries such as the United States, Japan and the United Kingdom which poured billions of dollars in relief measures, the Indian government has been more measured in its approach because of limited resources and to curb its budget deficit from ballooning.

Sitharaman suggested the government could ease up on spending in the months ahead to boost the growth rate. she also said ‘I have to be conscious that if I don't spend now, then the stimulus is meaningless, if I don't spend now the revival is going to get deferred and we can't afford that’.

The CNX Nifty is currently trading at 13202.10, up by 68.20 points or 0.52% after trading in a range of 13164.65 and 13213.55. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 4.45%, Hindalco up by 3.82%, Larsen & Toubro up by 2.43%, Adani Ports & SEZ up by 2.09% and GAIL India up by 1.99%. On the flip side, Asian Paints down by 0.90%, Dr. Reddy’s Lab down by 0.67%, Infosys down by 0.60%, Reliance Industries down by 0.55% and HDFC Life Insurance down by 0.47% were the top losers.

Asian markets were trading mixed; Nikkei 225 declined 108.70 points or 0.41% to 26,700.67, Hang Seng lost 41.96 points or 0.16% to 26,686.54, Jakarta Composite fell 31.23 points or 0.54% to 5,791.71 and Shanghai Composite was down by 12.11 points or 0.35% to 3,430.03. On the other hand, Straits Times increased 7.84 points or 0.28% to 2,830.18, Taiwan Weighted advanced 114.22 points or 0.82% to 14,091.31 and KOSPI surged 35.44 points or 1.31% to 2,731.66.