Benchmarks trade slightly higher in early deals

Indian equity benchmarks made cautious start on Thursday amid mixed cues from Asian peers. But, soon markets managed to trade above neutral lines in early deals with notable gains on the back of buying in Consumer Durables, Healthcare and Basic Materials counters. However, selling in FMCG, Utilities and PSU kept upside in check. Early cautiousness was due to rising coronavirus cases in the country. According to Worldometer, India reported 21,861 fresh Covid-19 cases on Thursday pushing the overall tally to 99,54,769. The death toll from the deadly infection jumped to 144,487. Though, some respite came in with Commerce and Industry Minister Piyush Goyal’s statement that the government is making efforts to deregulate the economy with an aim to attract greater investments from across the world. He said the government has opened up defence, manufacturing, mining, finance and capital market sectors. Adding optimum, SBI Research scaled up its projections for the economy, projecting gross domestic product (GDP) to contract 7.4 per cent during the current financial year compared to its earlier forecast of a 10.9 per cent fall.

On the global front, Asian markets are trading mixed after the US Federal Reserve revealed plans to continue its asset purchase program and US lawmakers made progress toward a $900 billion coronavirus relief deal. Nevertheless, worries about the continued surge in global coronavirus cases and lockdown measures weighed on the markets. Back home, some of the aviation stocks are trading under pressure after the Aviation turbine fuel (ATF) price was raised by a steep 6.3 per cent on Wednesday. Sugar stocks were in focus after the government approved a subsidy of Rs 3,500 crore to sugar mills for the export of 60 lakh tonnes of sweetener during the ongoing marketing year 2020-21 as part of its efforts to help them clear outstanding dues to sugarcane farmers. In scrip specific development, Jubilant FoodWorks rallied after foraying into biryani business.

The BSE Sensex is currently trading at 46769.51, up by 103.05 points or 0.22% after trading in a range of 46627.60 and 46779.71. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.55%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.20%, Healthcare up by 0.97%, Basic Materials up by 0.76%, Energy up by 0.57%, Industrials up by 0.29%, while FMCG down by 0.36%, Utilities down by 0.36%, PSU down by 0.23%, IT down by 0.19%, Realty down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.68%, HDFC up by 1.56%, Indusind Bank up by 1.38%, Sun Pharma up by 1.37% and Reliance Industries up by 0.92%. On the flip side, Power Grid down by 1.58%, Hindustan Unilever down by 1.13%, Asian Paints down by 0.76%, ITC down by 0.72% and Bajaj Auto down by 0.69% were the top losers.

Meanwhile, former RBI Governor D Subbarao has said that while managing a crisis is extremely difficult and the Reserve Bank of India (RBI) had been successful in preserving the financial stability of the economy during the present coronavirus disease (covid-19) pandemic. He noted that all actions of the central bank were driven by the dual objective of achieving financial stability and preventing a financial crisis, and secondly, transmitting money to productive sectors of the economy. He added that though governments and central banks of the world are presently operating from the playbook of the Global Financial Crisis (GFC) in 2008-09, the coronavirus crisis is quite different.

Subbarao has pointed out that while GFC was an asset crisis that hit the financial sector first, the coronavirus crisis first impacted the real sector. He also said there were certain key elements to the central bank's monetary policy response so far. He noted that she first was the extraordinary injection of liquidity through Open Market Operations (OMO), cut in CRR and SLR. The second was the easing of the financial conditions through the lowering of policy rates, reverse repo rates, Targeted Long-Term Repo Operations (TLTRO) for specific sectors. The third was the regulative forbearance through the introduction and extension of the loan moratorium.

However, Former RBI Governor has opined that given the excessive liquidity in the system it could become a challenge to wind down liquidity going forward. Noting that though expansionary fiscal policy is the need of the hour and government spending on health and education would only be beneficial for the economy, he said the fiscal deficit this fiscal could be double of the budgeted fiscal deficit target. He pointed out that managing debt would be another challenge for the government, and suggested that a roadmap for fiscal consolidation starting in 2022 would be a prudent move.

The CNX Nifty is currently trading at 13706.55, up by 23.85 points or 0.17% after trading in a range of 13673.55 and 13718.45. There were 22 stocks advancing against 27 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Divis Lab up by 2.53%, Shree Cement up by 1.86%, Indusind Bank up by 1.83%, Ultratech Cement up by 1.74% and HDFC up by 1.60%. On the flip side, Power Grid down by 1.55%, Hindustan Unilever down by 1.19%, Adani Ports & SEZ down by 1.11%, Coal India down by 1.10% and ITC down by 0.93% were the top losers.

Asian markets were trading mixed; Nikkei 225 gained 52.72 points or 0.20% to 26,810.12, Hang Seng added 21.50 points or 0.08% to 26,481.79, Jakarta Composite rose 21.14 points or 0.35% to 6,139.54 and Shanghai Composite was up by 21.26 points or 0.63% to 3,388.24. However, Straits Times lost 14.09 points or 0.49% to 2,858.71, Taiwan Weighted fell 42.52 points or 0.30% to 14,261.94 and KOSPI declined 14.79 points or 0.53% to 2,757.00.