Local indices continue to trade higher in morning deals

Indian equity benchmarks continued to trade higher in morning deals, on the back of favourable global cues. Sentiments remained up-beat with Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Guruprasad Mohapatra’s statement that the high growth story of foreign direct investments into India will go well in the new year too as there is a growing interest among overseas investors about the country amid the government's continuing reform measures to further improve the business climate. Some support also came as the Reserve bank of India (RBI) Governor Shaktikanta Das asked banks to take proactive measures to strengthen their resilience and lending capacity by raising capital, with an aim to support the ongoing revival in economic activities. Adding to the optimism, Crisil Ratings said that with extensive recovery efforts by non-banking financial companies (NBFCs) and uptick in economic activity, the collection efficiency ratios of its rated securitised pools for November 2020 payouts have improved to near pre-COVID-19 pandemic levels for most of the asset classes.

On the global front, Asian markets were trading mostly in green, as optimism about a potential Brexit deal helped offset uncertainty about a U.S. coronavirus relief package after President Donald Trump slammed the bill as a disgrace. Back home, on the sectoral front, there was some reaction in steel sector stocks with report that recovering economy, sprouting demand and improving prices raise hopes for the country's battered steel sector as it steps into the New Year after pandemic-induced disruptions turned 2020 into a disaster for the industry.

The BSE Sensex is currently trading at 46841.98, up by 397.80 points or 0.86% after trading in a range of 46615.39 and 46855.02. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.87%, while Small cap index was up by 1.12%.

The top gaining sectoral indices on the BSE were Metal up by 3.49%, Telecom up by 2.43%, Oil & Gas up by 2.06%, PSU up by 2.04% and Basic Materials up by 1.93%, while IT down by 0.40% and TECK down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were ONGC up by 4.07%, Bharti Airtel up by 2.75%, Bajaj Auto up by 2.56%, Axis Bank up by 2.35% and NTPC up by 1.88%. On the flip side, Infosys down by 0.92%, Dr. Reddys Lab down by 0.58%, Asian Paints down by 0.41%, Nestle down by 0.18% and TCS down by 0.17% were the top losers.

Meanwhile, the Union Cabinet has approved changes to the guidelines for providing Direct to Home (DTH) services to bring it in line with the existing policy that allows 100 per cent FDI in the DTH broadcasting services sector. It also said that licences will now be issued for 20 years with a renewal provision after every 10 years. At present, DTH licences are issued for 10 years.

The licence fee has also been lowered from 10 per cent of gross revenue to 8 per cent. The fee will have to be paid quarterly instead of annual payment as at present. The licence fee will be similar to that in the telecom sector.

Leading DTH players welcomed the decision and said a 20-year licence period will provide stability and will be beneficial for players due to the large capital investments that they have made. It also gives DTH the recognition of being an infrastructure intensive sector.

The CNX Nifty is currently trading at 13732.60, up by 131.50 points or 0.97% after trading in a range of 13643.95 and 13734.70. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were ONGC up by 4.96%, Tata Motors up by 4.08%, Indian Oil Corp. up by 3.40%, GAIL India up by 3.34% and Bharti Airtel up by 2.72%. On the flip side, Infosys down by 0.88%, Wipro down by 0.65%, Dr. Reddys Lab down by 0.59%, Asian Paints down by 0.39% and Nestle down by 0.36% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 106.47 points or 0.4% to 26,631.26, Taiwan Weighted strengthened 56.20 points or 0.4% to 14,279.29, Hang Seng increased 43.46 points or 0.16% to 26,386.56, KOSPI rose 42.39 points or 1.54% to 2,802.21 and Straits Times advanced 8.64 points or 0.3% to 2,842.04.

On the flip side, Shanghai Composite declined 7.11 points or 0.21% to 3,375.21 and Jakarta Composite lost 14.58 points or 0.24% to 6,008.71.