Markets trade in fine-fettle in early deals; Nifty surpasses 13,650 mark

Indian equity benchmarks made gap-up opening on Wednesday mirroring global peers and unabated foreign fund inflows. Markets are trading in fine-fettle in early deals on account of buying in all the sector indices except telecom. Sentiments got a boost after S&P Global Ratings raised India’s growth projection for the current fiscal to (-) 7.7 percent from (-) 9 percent estimated earlier on rising demand and falling COVID infection rates. It said rising demand and falling infection rates have tempered its expectation of COVID’s hit on the Indian economy. Adding more optimism, Finance minister Nirmala Sitharaman asserted that the Budget for FY22 will be vibrant enough to sustain economic revival in the aftermath of Covid-19 disruption. Traders overlooked the government data showing that the country's exports dipped 8.74 per cent to $23.52 billion in November on account of contraction in shipments of key sectors like petroleum, engineering, chemicals and gems and jewellery. Besides, trade deficit during the month narrowed to $9.87 billion as imports too declined by 13.32 per cent to $33.39 billion.

Global cues remained supportive with all the Asian markets trading higher following the overnight rally on Wall Street amid optimism about a new US fiscal stimulus bill and progress in the rollout of COVID-19 vaccines. US House Speaker Nancy Pelosi has scheduled a meeting with other congressional leaders to discuss a relief package. Besides, Japan posted a merchandise trade surplus of 366.8 billion yen in November. That was well shy of expectations for a surplus of 529.8 billion yen and down sharply from 872.9 billion yen in October.

Back home, sugar stocks were in focus as the Union Cabinet may consider a proposal to provide export subsidy worth Rs 3,600 crore to sugar mills for the marketing year 2020-21 in today's meeting. Auto stocks also in limelight as parliamentary panel on industry recommends a 10% GST reduction for the auto sector to boost demand. In scrip specific development, Mahindra & Mahindra rallied on reports that it will increase price of passenger and commercial vehicles from January 1.

The BSE Sensex is currently trading at 46584.80, up by 321.63 points or 0.70% after trading in a range of 46519.94 and 46599.02. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.76%, while Small cap index up by 0.82%.

The top gaining sectoral indices on the BSE were Metal up by 1.97%, Realty up by 1.69%, Auto up by 1.19%, Basic Materials up by 1.16%, Oil & Gas up by 1.13%, while Telecom down by 0.13% was the sole losing index on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.83%, ONGC up by 2.19%, HDFC up by 1.96%, Tata Steel up by 1.78% and Asian Paints up by 1.70%. On the flip side, Tech Mahindra down by 0.83%, Hindustan Unilever down by 0.67%, Bharti Airtel down by 0.22% and HCL Technologies down by 0.16% were the top losers.

Meanwhile, S&P Global Ratings has revised India's FY21 Gross domestic product (GDP) growth forecast to (-) 7.7 percent up from (-) 9 percent estimated previously, on rising demand and falling COVID-19 rates. For the next fiscal, it has projected growth to rebound to 10 percent. Its revision in growth forecast for the current fiscal reflects a faster-than-expected recovery in the September quarter.

The US-based rating agency has stated that a faster recovery keeps more of the economy's supply side intact and can set India up for more prolonged above-average growth during the recovery phase. Besides, it said India is learning to live with the virus, even though the coronavirus pandemic is far from defeated. However, it noted that the reported cases have fallen by more than half from peak levels, to about 40,000 per day. It is no surprise that India is following the path of most economies across Asia-Pacific in experiencing a faster-than-expected recovery in manufacturing production.

S&P further said manufacturing output was about 3.5 per cent higher in October 2020 when compared to the year-ago period, while the output of consumer durables rose by almost 18 percent. It said this recovery underscores one of the more striking aspects of the COVID-19 shock -- the resilience of manufacturing supply chains. Again, as with demand, some slowing of output momentum has emerged more recently. It noted that the demand for goods -- not services -- drives India's recovery, and household savings have risen due to an uncertain outlook and constraints of social distancing. But, it said demand for durables is rising. It added that if consumers cannot or will not spend money on a vacation or eating out, they will divert some of that spending to goods.

The CNX Nifty is currently trading at 13657.35, up by 89.50 points or 0.66% after trading in a range of 13637.20 and 13666.45. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.61%, Hindalco up by 2.07%, ONGC up by 1.99%, Asian Paints up by 1.94% and HDFC up by 1.75%. On the flip side, Tech Mahindra down by 0.88%, Eicher Motors down by 0.49%, Hindustan Unilever down by 0.40%, GAIL India down by 0.32% and SBI Life Insurance down by 0.29% were the top losers.

Asian markets were trading in green; Nikkei 225 gained 63.32 points or 0.24% to 26,751.16, Straits Times rose 12.45 points or 0.44% to 2,869.17, Hang Seng surged 213.63 points or 0.82% to 26,420.92, Taiwan Weighted jumped 220.61 points or 1.57% to 14,289.13, KOSPI added 11.19 points or 0.41% to 2,768.01, Jakarta Composite soared 84.56 points or 1.41% to 6,094.69 and Shanghai Composite was up by 5.93 points or 0.18% to 3,373.16.