Markets end Friday's choppy session at record closing highs

Indian equity benchmarks ended Friday's choppy session at record closing highs but with small gains, tracking gains in index majors Infosys, Bajaj Auto and SBI. After making cautious start, benchmarks traded with a negative bias for most part of the day, as pessimism spread among the investors with a private report stated that venture investments by private equity and venture capital funds were 27 percent lower on yearly basis in November at $3.9 billion, and more than halved from the $8.5 billion reported in October. Some anxiety also came with a  private report stating that the current pandemic is likely to shape consumer thinking and consequently impact shopping behaviour, and the overall consumption growth is likely to get delayed by up to two years. It also said that the household consumption is going to be negatively impacted over 2020 and 2021. Market participants also took a note of Finance Minister Nirmala Sitharaman’s statement that the government has taken several measures to support the economy but no amount of intervention will be adequate to deal with the crisis triggered by the COVID-19 pandemic.

However, last hour buying in select IT, TECK and healthcare stocks helped indices to settle the day in the green. Some support came as ICRA pegged the contraction in the economy at 7.8 per cent for 2020-21. Before the GDP numbers for Q2 were out, it had predicted the fall in the economy at 11 per cent. It said improving economic fundamentals, a bright outlook for the rabi season, and the visibility of vaccine availability are expected to strengthen demand. Traders also found some solace with Union Minister Piyush Goyal’s statement that sustainability has become an important element of decision-making both in the government and the corporate sector of the country. He said sustainable development will further enhance the scale and speed of growth in the years to come. Besides, CBDT said further adding to the recovery signals, advance tax payment by companies has shown a massive 49 per cent growth to Rs 1,09,506 crore in the third quarter this fiscal. 

On the global front, Asian markets ended mostly lower on Friday amid cautious trades despite the record closing highs overnight on Wall Street. Worries about post-Brexit trade talks emerged after a spokesman for British Prime Minister Boris Johnson said it was likely no agreement would be reached unless the European Union's position changed substantially. The rising number of coronavirus cases in parts of Asia and around the world also weighed on the markets. European markets were trading higher after Moderna's coronavirus vaccine won backing from a panel of experts who advise the U.S. FDA, setting the stage for the rollout of the second Covid-19 vaccine in the United States. Back home, sector wise, oil and gas sector was in focus, as Petroleum Minister Dharmendra Pradhan said the government has planned a $60-billion investment for creating gas infrastructure in the country till 2024, and gas' share in the energy mix is expected to rise to 15 percent by 2030. Stocks related to tourism sector also were in watch as culture and Tourism Minister Prahlad Patel said domestic tourism would be the mainstay of the tourism industry in post-COVID times, highlighting the need to identify and promote unexplored and little known destinations in the country.

Finally, the BSE Sensex rose 70.35 points or 0.15% to 46,960.69, while the CNX Nifty was up by 19.85 points or 0.14% to 13,760.55.

The BSE Sensex touched high and low of 47,026.02 and 46,630.31, respectively and there were 17 stocks advancing against 13 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.35%, while Small cap index was down by 0.24%.

The top gaining sectoral indices on the BSE were IT up by 1.70%, TECK up by 1.27%, Consumer Durables up by 0.95%, Healthcare up by 0.73% and Consumer Discretionary up by 0.32%, while Telecom down by 1.41%, Oil & Gas down by 0.74%, Realty down by 0.67%, Finance down by 0.65% and Power down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.64%, Bajaj Auto up by 2.39%, SBI up by 1.42%, ICICI Bank up by 1.40% and HCL Technologies up by 1.32%. On the flip side, Indusind Bank down by 3.30%, ONGC down by 2.51%, HDFC Bank down by 2.09%, Maruti Suzuki down by 1.64% and Bajaj Finserv down by 0.84% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report is expecting that the technical recession in the country's economy to end in the fourth quarter of the current fiscal (Q4FY21), limiting the contraction in the Gross domestic product (GDP) to 7.8 percent in the financial year 2021. In the second quarter of financial year 2021, GDP contracted 7.5 percent as against a decline of 23.9 percent in the April-June quarter.

With a steady performance of the agricultural sector and a lagged recovery in the contact-intensive parts of the services sector, the agency forecasts a small contraction of one per cent in the Indian GDP in the third quarter of financial year 2021. It also said healthy procurement and a favourable outlook for the rabi season, as well as greater visibility of an approaching COVID-19 vaccine rollout, will strengthen demand and economic activity in the fourth quarter of financial year 2021.

After the NSO had released the GDP data for the second quarter in financial year 2021, ICRA had projected the GDP contraction in financial year 21 to range between 7-9 per cent. With the updated projections for Q3 and Q4 financial year 2021, it has now pegged GDP contraction in financial year 2021 at 7.8 per cent. It further said that the spending seen during the festive season was driven by pent-up demand, and consumption is yet to fully stabilise in various sectors. It added that while many indicators have displayed growth in the ongoing quarter relative to a weak performance in the same period in FY2020, volumes still remain below FY2019 levels in a number of sectors, highlighting that a full recovery remains somewhat distant.

The CNX Nifty traded in a range of 13,772.85 and 13,658.60 and there were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 3.35%, Bajaj Auto up by 2.50%, Infosys up by 2.31%, Wipro up by 1.71% and Cipla up by 1.53%. On the flip side, Indusind Bank down by 3.10%, HDFC Bank down by 2.28%, ONGC down by 1.97%, Maruti Suzuki down by 1.74% and Indian Oil Corporation down by 1.36% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 29.33 points or 0.45% to 6,580.39, France’s CAC increased 0.79 points or 0.01% to 5,550.25 and Germany’s DAX increased 13.45 points or 0.1% to 13,680.70.

Asian markets ended mostly lower on Friday, despite prospect of a major corona virus relief package from United States. Chinese shares ended lower amid fresh Sino-US tensions following reports that the United States is set to add dozens of Chinese firms, including the country's top chipmaker SMIC, to a trade blacklist later in the day. Japanese shares declined as investors showed little reaction to the Bank of Japan's interest rate announcement. Tokyo Governor Yuriko Koike has urged people to take increased anti-virus measures during the year-end and New Year holiday period. Tokyo’s cumulative Covid-19 cases tally now stands at 50,154.