Local indices continue to trade higher in morning deals

Indian equity benchmarks continued to trade higher with gains of over half percent in morning deals, following positive global cues. Sentiments remained positive with Union Commerce and Industry Minister Piyush Goyal’s statement that the focus on 'Vocal for Local' and manufacturing of value-added products in India can create job opportunities for the youth and boost the country's economic growth. He noted that as consumers emphasize more on quality products and services at the right price manufactured in the country, it will create more jobs for the youth and help in accelerating the growth of the country's economy. Some support also came with the Centre for Economics and Business Research’s (CEBR) report that India, which appears to have been pushed back to being the world's sixth biggest economy in 2020, will again overtake the UK to become the fifth largest in 2025 and race to the third spot by 2030. Separately, trading community urged Union Finance Minister Nirmala Sitharaman and Goods and Goods and Services Tax (GST) Council to withdraw certain provisions of the new GST notification issued a few days back. The government had notified certain changes to the GST Rules on December 22 and some of the rules are set to be applicable from January 1 next year.

Asian markets were trading higher, after President Donald Trump signed a $900 billion economic aid package, helping to reduce uncertainty as governments re-impose travel and business curbs in response to a new coronavirus variant. Meanwhile, the Ministry of Economy, Trade and Industry said that industrial output in Japan was flat on a seasonally adjusted basis in November. That missed expectations for an increase of 1.2 percent following the 4.0 percent gain in October. Back home, on the sectoral front, there was some buzz in telecom industry stocks with a private report that the telecom industry's active subscriber base rose by nearly 2.5 million in October 2020 to touch about 961 million, and user additions benefited from vanishing impact of SIM consolidation triggered from tariff hike.

The BSE Sensex is currently trading at 47264.00, up by 290.46 points or 0.62% after trading in a range of 47152.03 and 47354.71. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.05%, while Small cap index was up by 1.16%.

The top gaining sectoral indices on the BSE were Realty up by 3.09%, Metal up by 1.58%, Industrials up by 1.25%, Auto up by 1.17% and PSU up by 1.15%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Indusind Bank up by 1.63%, SBI up by 1.42%, HDFC Bank up by 1.22%, Axis Bank up by 1.20% and Bharti Airtel up by 1.17%. On the flip side, Hindustan Unilever down by 0.55% and Asian Paints down by 0.05% were the few losers.

Meanwhile, India Ratings has revised its projections for economic contraction to 7.8 per cent for current fiscal (FY21) from the earlier expectation of 11.8 per cent due to easing Covid-19 headwinds and better than expected numbers in the second quarter of the current financial year. The rating and research agency expected FY22 growth to be 9.6 per cent, mainly due to the weak base of FY21.

It said that while the headwinds emanating from Covid-related challenges are unlikely to go away till mass vaccination becomes a reality, the economic agents and economic activities have not only learnt to live with it, but are also adjusting swiftly to the post Covid world. Ind-Ra projections are close to the RBI's expectation of 7.5 per cent GDP growth rate in the current financial year.

The economy contracted an unprecedented 23.9 per cent in the first quarter of FY21. However, the contraction dropped to 7.5 per cent in the second quarter, much lower than what was expected by most experts. Ind-Ra now expects GDP to contract 0.8 per cent in the third quarter and grow by 0.3 per cent in the fourth quarter of FY21 against its earlier projection of the economy to start growing in the fourth quarter of the next financial year.

The CNX Nifty is currently trading at 13843.80, up by 94.55 points or 0.69% after trading in a range of 13813.50 and 13865.45. There were 47 stocks advancing against 3 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 4.06%, SBI Life Insurance up by 2.90%, JSW Steel up by 2.77%, Adani Ports &SEZ up by 2.04% and HDFC Life Insurance up by 1.90%. On the flip side, Hindustan Unilever down by 0.69%, Britannia Industries down by 0.18% and Eicher Motors down by 0.07% were the top losers.

Asian markets were trading higher; Nikkei 225 surged 137.94 points or 0.52% to 26,794.55, Taiwan Weighted strengthened 125.02 points or 0.87% to 14,456.44, Hang Seng increased 4.64 points or 0.02% to 26,391.20, KOSPI rose 11.94 points or 0.43% to 2,818.80, Straits Times advanced 6.71 points or 0.24% to 2,848.75, Shanghai Composite gained 10.13 points or 0.3% to 3,406.69 and Jakarta Composite soared 62.79 points or 1.04% to 6,071.50.