Key gauges end in green on Friday

Indian equity benchmarks resumed their up move after a day's pause in the previous session, amid buying in utilities, oil and gas, power and metal stocks. The benchmarks staged a gap up opening, as Union Minister for Minister of Micro, Small and Medium Enterprises (MSME) Nitin Gadkari said that India was a destination with huge potential for attractive investments and urged people to invest in MSMEs in the country. He also said that with the world moving production away from dealings in China, India was the next best alternative. Some optimism also came as the finance ministry has notified the Viability Gap Funding (VGF) scheme under which infrastructure projects would be selected for financial support to give a push to the sector. As per the scheme notified by the ministry, funding up to Rs 200 crore will be sanctioned by the Empowered Committee (EC) headed by the economic affairs secretary, while projects needing over Rs 200 crore would be approved by the EC with the approval of the finance minister.

However, minor profit booking in late afternoon deals wiped out all intraday gains. Some anxiety also spread among traders with a private report stated that India’s retail inflation probably fell in November from October but remained above the Reserve Bank of India’s target, amid high food and petrol prices. Traders also took note of a private report that the handsome 25 per cent rise in corporate profits in the September quarter amid a sharp contraction in GDP was on the back of wage squeezes, leading to rise in inequalities in India. But, indexes resumed their positive momentum in the final minutes of trading to close higher, as Finance Minister Nirmala Sitharaman reviewed the situation about outstanding payments to micro, small and medium enterprises, especially by CPSEs and central government agencies. Top officials including Secretary in the Department of Financial Services Debasish Panda, MSME Secretary A K Sharma, among others, were present in the meeting.

On the global front, Asian markets ended mostly higher on Friday, after a high powered U.S. vaccine advisory panel endorsed mass use of the Pfizer-BioNTech Covid-19 vaccine and U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi cited progress over a new Covid-19 relief package. European markets were trading lower, amid uncertainties over Brexit, stalled U.S. stimulus talks and worries over surging Covid-19 cases. After months-long talks and with just three weeks to go until the end of the transition period, British Prime Minister Boris Johnson said there is now a ‘strong possibility’ the U.K. will leave the EU without a deal. Back home, on the sectoral front, telecom stocks were in focus as the Department of Telecommunications (DoT) is considering holding two spectrum auctions in 2021, starting with the sale of 4G airwave licences, which are due to expire next year. IT sector’s stocks also were buzzing as ratings agency ICRA stated that the Indian IT services revenue are expected to be flat in US dollar terms in FY21 as against a previous estimate of a negative growth, helped by acceleration in demand for digital services.

Finally, the BSE Sensex rose 139.13 points or 0.30% to 46,099.01, while the CNX Nifty was up by 35.55 points or 0.26% to 13,513.85.

The BSE Sensex touched high and low of 46,309.63 and 45,706.22, respectively and there were 18 stocks advancing against 12 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.15%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Utilities up by 1.93%, Oil & Gas up by 1.65%, Power up by 1.30%, Metal up by 1.23% and FMCG up by 0.80%, while Healthcare down by 0.43%, TECK down by 0.26%, IT down by 0.25%, Auto down by 0.20% and Telecom down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 5.68%, NTPC up by 5.30%, Tata Steel up by 1.90%, ITC up by 1.65% and ICICI Bank up by 1.63%. On the flip side, Axis Bank down by 2.19%, Mahindra & Mahindra down by 1.18%, Tech Mahindra down by 0.94%, HCL Technologies down by 0.61% and Bajaj Finserv down by 0.46% were the top losers.

Meanwhile, the finance ministry has notified the Viability Gap Funding (VGF) scheme under which infrastructure projects would be selected for financial support to give a push to the sector. As per the scheme notified by the ministry, funding up to Rs 200 crore will be sanctioned by the Empowered Committee (EC) headed by the economic affairs secretary, while projects needing over Rs 200 crore would be approved by the EC with the approval of the finance minister.

The other members of the EC would be NITI Aayog CEO, expenditure secretary, secretary of the line ministry dealing with the subject and joint secretary in the Department of Economic Affairs as member secretary. This scheme will be called the Scheme for Financial Support to Public Private Partnerships (PPPs) in infrastructure, it said, adding it will be a central sector scheme to be administered by the Ministry of Finance.

The scheme shall come into force with immediate effect. Regarding eligibility, it said the project shall be implemented by a private sector company to be selected by the government or a statutory entity through a process of open competitive bidding. For social sector projects, including water supply and solid waste management, the amount of VGF shall be equivalent to the lowest bid for capital grant subject to maximum of 30 per cent of the total project cost. For all other eligible sector projects, the amount of VGF shall be equivalent to the lowest bid for capital grant subject to maximum of 20 per cent of the total project cost.

The CNX Nifty traded in a range of 13,579.35 and 13,402.85 and there were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ONGC up by 5.46%, NTPC up by 5.15%, GAIL India up by 5.04%, Coal India up by 2.56% and Tata Steel up by 1.93%. On the flip side, Axis Bank down by 2.34%, Divis Lab down by 2.21%, Adani Ports &SEZ down by 1.27%, Eicher Motors down by 1.11% and Mahindra & Mahindra down by 1.11%.

European markets were trading lower; UK’s FTSE 100 decreased 29.90 points or 0.45% to 6,569.86, France’s CAC decreased 44.94 points or 0.81% to 5,504.71 and Germany’s DAX decreased 135.79 points or 1.02% to 13,159.94.

Asian markets ended mostly higher on Friday on optimism about corona virus vaccine rollouts, but investors are cautiously keeping track on Brexit trade talks as well as ongoing negotiations in the US for a corona virus relief package. British Prime Minister Boris Johnson said there was ‘a strong possibility’ Britain and the European Union would fail to strike a new trade deal. US House Speaker Nancy Pelosi suggested that negotiations on a federal rescue package could stretch into late December if necessary. Japanese markets declined as the yen gained following worries over surging Covid-19 cases. Japanese Prime Minister Yoshihide Suga said the coronavirus situation in the country is tense, but he was not thinking of suspending the government travel subsidy program. However, Chinese shares declined on sign of rising Sino-US tensions as the US Federal Communications Commission began the process of revoking China Telecom's authorization to operate in the United States. Also, worries about policy tightening dented risk appetite of Chinese investors.