Equity markets enter into green zone

Indian equity markets wiped out all their losses to enter into green zone in late afternoon session. The broader indices, BSE Mid cap index and Small cap index are also trading in green. Traders found support after economic think-tank NCAER, in its mid-year review of the Indian economy, has said that India's Gross Domestic Product (GDP) growth is likely to turn positive at 0.1 per cent in the October-December (Q3) quarter, after witnessing a contraction in the first half of the current financial year. It also forecast 2 per cent growth in the fourth quarter (January-March 2021). It noted that the overall contraction in the current fiscal is likely to be contained at 7.3 per cent. Besides, Ministry of Finance has released the 8th weekly installment of Rs 6,000 crore to the states. Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

On the global front, all Asian markets were trading lower, as fears of a highly infectious new strain of COVID-19 that has a 70% greater transmission rate than the original one has caused a wave of travel bans and prompted fears of a delay to global economic recovery. European markets were trading higher attempting to recover from a brutal sell-off in the previous session, as investors sentiment was shaken by a new coronavirus strain in the U.K.

The BSE Sensex is currently trading at 45829.41, up by 275.45 points or 0.60% after trading in a range of 45112.19 and 45938.40. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.29%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Telecom up by 2.42%, IT up by 2.27%, TECK up by 2.17%, Utilities up by 1.44% and Metal was up by 1.35%, while, Energy down by 0.15%, Realty down by 0.09% and Consumer Durables was down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 3.20%, Tech Mahindra up by 2.98%, Bharti Airtel up by 2.76%, Infosys up by 2.67% and Power Grid up by 2.48%. On the flip side, Bajaj Finance down by 1.02%, Ultratech Cement down by 0.63%, ONGC down by 0.61%, Reliance Industries down by 0.31% and ITC down by 0.27% were the top losers.

Meanwhile, in order to meet the GST compensation shortfall, the Ministry of Finance has released the 8th weekly installment of Rs 6,000 crore to the states. Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

The amount released this week was the 8th instalment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 4.1902%.  So far, an amount of Rs. 48,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.6986%.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

The CNX Nifty is currently trading at 13402.15, up by 73.75 points or 0.55% after trading in a range of 13192.90 and 13446.75. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Adani Ports up by 3.43%, HCL Tech up by 3.05%, Tech Mahindra up by 2.92%, Infosys up by 2.82% and Bharti Airtel up by 2.68%. On the flip side, Bajaj Finance down by 1.13%, Tata Motors down by 0.97%, Hindalco down by 0.73%, ONGC down by 0.72% and Grasim Industries down by 0.70% were the top losers.

All Asian markets were trading lower, Nikkei 225 slipped 278.03 points or 1.04% to 26,436.39, Taiwan Weighted dropped 207.50 points or 1.44% to 14,177.46, Hang Seng decreased 187.43 points or 0.71% to 26,119.25, Jakarta Composite lost 142.33 points or 2.31% to 6,023.29, Shanghai Composite declined 63.79 points or 1.86% to 3,356.78, KOSPI fell 44.97 points or 1.62% to 2,733.68 and Straits Times was up by 24.14 points or 0.85% to 2,822.38.

European markets were trading higher; UK’s FTSE 100 increased 13.27 points or 0.21% to 6,429.59, France’s CAC increased 67.27 points or 1.25% to 5,460.61 and Germany’s DAX was up by 167.21 points or 1.26% to 13,413.51.