Benchmarks trade firm in early deals amid positive IIP data

Indian equity benchmarks made optimistic start on Monday tracking their Asian peers. Markets are trading firm in early deals on the back of buying in Metal, PSU and Oil & Gas stocks. Sentiments got a boost as the country’s index of industrial production (IIP) grew 3.6 per cent to 128.5 in the month of October, according to the data released by the Ministry of Statistics & Programme Implementation (MoSPI). Some support also came in as the government is likely to launch the third tranche of Bharat Bond ETF, the exchange traded fund that invests in debt of public sector companies, this fiscal. Besides, market participants are eyeing the inflation data to be out later in the day. Meanwhile, on Sunday, India reported 27,336 fresh Covid-19 cases. Its case tally now stands at 9,884,716. The country's death toll has mounted to 143,393. With 18,80,416 cases, Maharashtra has the highest number of coronavirus cases, followed by Karnataka 901,000, Andhra Pradesh 875,000, Tamil Nadu 798,000, and Kerala 669,000. With 1,984 fresh cases, Delhi's Covid-19 tally has climbed to over 607,000.

Global cues remained supportive with most of the Asian markets trading in green despite the mixed cues from Wall Street Friday. Investors' sentiment was boosted after the US Food and Drug Administration authorized a COVID-19 vaccine developed by Pfizer and BioNTech for emergency use. In addition, investors cheered news that Britain and the European Union have agreed to continue Brexit trade talks beyond Sunday's deadline.

Back home, banking stocks were in focus with report that the Finance Ministry will take a call on residual Rs 14,500 crore capital infusion in the public sector banks (PSBs) in the fourth quarter of this fiscal. In scrip specific development, Cipla gained as it announced the settlement of its patent litigation with Celgene Corporation, a wholly-owned subsidiary of Bristol Myers Squibb, relating to patents for Revlimid, generic lenalidomide, in the US.

The BSE Sensex is currently trading at 46285.01, up by 186.00 points or 0.40% after trading in a range of 46231.31 and 46373.34. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.54%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Metal up by 2.08%, PSU up by 1.65%, Oil & Gas up by 1.18%, Basic Materials up by 1.14%, Utilities up by 1.04%, while Realty down by 0.19%, Auto down by 0.10% were the only losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.69%, Tata Steel up by 2.37%, NTPC up by 2.00%, ICICI Bank up by 1.58% and Larsen & Toubro up by 1.43%. On the flip side, Tech Mahindra down by 1.01%, Bajaj Auto down by 0.66%, HDFC Bank down by 0.12% and Infosys down by 0.02% were the top losers.

Meanwhile, Former chief statistician Pronab Sen has said that at the moment India's current macroeconomic situation is very uncertain and the country's Gross domestic product (GDP) could contract closer to 10 percent in the current fiscal (FY21). He also said that although the overall macro management of the economy by the government has not been very good but this particular slowdown is really beyond its control.

Sen said quarterly GDP numbers are still derived from some corporate accounts and corporates have not fared as badly as the non-corporate sector. He said ‘we know that MSMEs have been hit much harder than the corporations. So, the headline number coming out in the national accounts is an overly optimistic picture of the economy’. He also stressed on bringing back confidence of the investors. He noted that investors are new people who put their money into creating new production capacity, that is completely missing and until that comes back, the economy cannot grow. He added ‘because at the moment, as things stand our production capacity will not be very higher than what it was in 2019-20. And in fact, it will be less than that because some of the capacity may have closed down.’

India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped the GDP clock a lower contraction of 7.5 percent and held out hopes for further improvement on better consumer demand. The GDP had shrunk by a massive 23.9 percent in the first quarter of the current fiscal as the COVID-19 lockdown pummelled economic activity.

The CNX Nifty is currently trading at 13562.45, up by 48.60 points or 0.36% after trading in a range of 13555.30 and 13597.50. There were 38 stocks advancing against 11 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Cipla up by 3.88%, Coal India up by 3.58%, ONGC up by 2.38%, Tata Steel up by 2.23% and IOC up by 1.97%. On the flip side, Eicher Motors down by 1.63%, Tech Mahindra down by 1.02%, Bajaj Auto down by 0.74%, HDFC Life Insurance down by 0.73% and Wipro down by 0.59% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 surged 155.75 points or 0.58% to 26,808.27, Straits Times jumped 40.69 points or 1.44% to 2,862.39, KOSPI rose 1.28 points or 0.05% to 2,771.34 and Jakarta Composite soared 61.72 points or 1.04% to 6,000.05. However, Shanghai Composite was up by 13.29 points or 0.40% to 3,360.48. However, Hang Seng declined 25.51 points or 0.10% to 26,480.36 and Taiwan Weighted slipped 38.34 points or 0.27% to 14,223.35.