Post Session: Quick Review

Bulls held tight grip over the Dalal Street on Monday’s trading session, with both the Sensex and the Nifty ending higher with strong gains. The start of the day was on a positive note, after the Drug Controller General of India (DCGI) approved the emergency use of both Oxford-AstraZeneca’s Covishield and Bharat Biotech’s Covaxin for immunisation against Covid-19 in India. Traders took some support with data showing that goods and Services Tax (GST) collections touched a record-high of over Rs 1.15 lakh crore in December 2020, in signs that the economy continues to reflate after a strict lockdown. Mop-up from GST in December 2020 was 12 percent higher than Rs 1.03 lakh crore collected in the same month of 2019.

In late morning deals, markets cut gains but soon staged recovery to continue gaining rally, as India’s manufacturing sector continued to strengthen in December with companies stepping up production and input buying amid efforts to rebuild their inventories following pandemic-driven business closures earlier in 2020. Data released by analytics firm IHS Markit showed Purchasing Managers’ Index (PMI) for manufacturing sector picked up marginally in December to 56.4 from 56.3 a month ago. A figure above 50 indicates expansion, while sub-50 signals contraction. Some support also came in as foreign portfolio investors (FPIs) remained net buyers for the third month in a row by investing Rs 68,558 crore in December in Indian markets as global investors continued betting on emerging markets.

On the global front, European markets were trading higher as a landmark Brexit trade deal and coronavirus vaccine drives across the continent bolstered expectations of a strong economic rebound. Asian markets ended mostly higher on Monday, after the manufacturing sector in Japan improved in December to a level of stability, the latest survey from Jibun Bank showed on Monday with a manufacturing PMI score of 50.0. That's up from 49.0 in November and it now sits right on the line that separates expansion from contraction. Individually, output stabilized for the first time in 23 months and employment rose for the first time since February.

The BSE Sensex ended at 48176.80, up by 307.82 points or 0.64% after trading in a range of 47594.47 and 48220.47. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.42%, while Small cap index was up by 1.37%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 5.34%, Basic Materials up by 2.85%, IT up by 2.71%, TECK up by 2.48% and Oil & Gas up by 1.96%, while Bankex down by 0.15% and Consumer Durables down by 0.01% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 4.02%, TCS up by 3.79%, HCL Tech. up by 3.05%, Tech Mahindra up by 2.56% and Infosys up by 2.23%. On the flip side, Kotak Mahindra Bank down by 1.43%, Bajaj Finance down by 1.21%, Asian Paints down by 0.72%, HDFC Bank down by 0.61% and Titan Co down by 0.49% were the top losers. (Provisional)

Meanwhile, Indian manufacturing sector strengthened in the month of December, with manufacturers stepping up production and input buying amid efforts to rebuild their inventories following business closures earlier in the year. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 56.4 in December as against 56.3 in November.

The report further noted that factory orders increased during December, on the back of the loosening of COVID-19 restrictions, strengthening demand and improved market conditions. In response, firms lifted production again. In both cases, rates of expansion remained sharp despite easing to four-month lows. Goods producers continued to make additional input purchases in December, extending the current sequence of growth to five months.

On the price front, input cost inflation accelerated to a 26-month high in December, while output charges were lifted in response to rising cost burdens, but the rate of inflation was only marginal. Meanwhile, Indian manufacturers maintained an upbeat view that output will increase in the coming year. However, the degree of optimism weakened to a four-month low as some firms were concerned about the lasting effect of the COVID-19 pandemic on the global economy.

The CNX Nifty ended at 14132.90, up by 114.40 points or 0.82% after trading in a range of 13953.75 and 14147.95. There were 37 stocks advancing against 12 stocks declining, while 1 stock remains unchanged on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 7.76%, Hindalco up by 6.69%, Eicher Motors up by 4.44%, ONGC up by 4.02% and TCS up by 3.80%. On the flip side, Hero MotoCorp down by 1.90%, Kotak Mahindra Bank down by 1.43%, Bajaj Finance down by 1.21%, Adani Ports & SEZ down by 0.98% and Asian Paints down by 0.79% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 125.65 points or 1.94% to 6,586.17, France’s CAC increased 56.99 points or 1.03% to 5,608.40 and Germany’s DAX was up by 57.74 points or 0.42% to 13,776.52.

Asian markets ended mostly higher on Monday on investors’ hope that the rollout of corona virus vaccines would ultimately boost the global economy, while encouraging manufacturing and exports data also lifted hopes of a swifter global economic recovery from the pandemic. Chinese shares ended higher as the latest survey from Caixin revealed that the Chinese manufacturing sector continued to expand in December, albeit at a slower pace. Hong Kong shares rose despite persisting Sino-US tensions. Shares in China's state-owned telecommunications companies declined in Hong Kong trading after the New York Stock Exchange said it would delist three major Chinese telecoms, in the latest flare-up of tensions between China and United States. Japanese shares ended lower after Prime Minister Yoshihide Suga said he was considering declaring a state of emergency in the greater Tokyo metropolitan area to curb the spread of the corona virus, while stronger yen against the dollar also fueled selling pressure on market. But, a survey showed Japan's factory activity stabilized for the first time in two years in December, capped the Japanese market’s downfall.