Key indices settle at record closing highs

Indian equity benchmarks staged a sharp recovery from the day's low to end near the highest point of the day, and registered yet another record closing high level on Monday, tracking gains in index majors ONGC, TCS, HCL Technologies and Tech Mahindra. Sentiments got a boost after the Drugs Controller General of India (DCGI) granted restricted emergency use authorization for the Serum Institute of India (SII)’s Covishield and Bharat Biotech’s Covaxin vaccines against COVID-19. Also, Union Minister of State for Health and Family Welfare Ashwini Kumar Choubey stated that India will become corona-free. Some support also came in with government data showing that signalling an economic revival, goods and services tax (GST) collection touched a record high in December, posting growth of 11.6 per cent year-on-year (Y-o-Y) and surpassing the Rs 1-trillion mark for the third straight month.

However, during the late morning session markets slipped as there was some cautiousness with the commerce ministry’s data showing that the country’s exports declined marginally by 0.8 percent to $26.89 billion in December 2020, compeered to  $27.11 billion December 2019 due to contraction in sectors like petroleum, leather and marine products. The trade deficit in December widened to $15.71 billion, as imports grew by 7.6 percent to $42.6 billion. However, markets soon regained and further strengthened, after 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.

On the global front, Asian markets ended mostly higher on Monday after regional business surveys showed Asian factory activity expanded moderately in December, thanks to robust demand in regional giant China. Besides, the latest survey from Caixin revealed the manufacturing sector in China continued to expand in December, albeit at a slower pace. The manufacturing PMI score stood at 53.0 - missing expectations for a score of 54.8 and down from 54.9 in November. An official gauge of factory activity, focusing more on larger and state-owned firms, also moderated but remained strong. Also, a survey showed Japan's factory activity stabilized for the first time in two years in December. European markets were trading higher, as the new EU/UK trade deal regulations came into force over the weekend and the U.K. began the Oxford/AstraZeneca vaccine rollout, making another step in the global battle against the pandemic. Sentiment was also boosted after a survey showed activity in the euro zone manufacturing sector hit its highest level in December last year since May 2018. IHS Markit's final euro zone manufacturing purchasing managers' index rose to 55.2 from 53.8 in November.

Finally, the BSE Sensex rose 307.82 points or 0.64% to 48,176.80, while the CNX Nifty was up by 114.40 points or 0.82% to 14,132.90.

The BSE Sensex touched high and low of 48,220.47 and 47,594.47, respectively and there were 20 stocks advancing against 10 stocks declining on the index.

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

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%, Oil & Gas up by 1.96% while, Bankex down by 0.15%, Consumer Durables down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 4.02%, TCS up by 3.79%, HCL Technologies up by 3.05%, Tech Mahindra up by 2.46% 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 0.73%, HDFC Bank down by 0.61% and Power Grid down by 0.61% were the top losers.

Meanwhile, 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. The total number of GSTR-3B Returns filed for the month of November up to December 31, 2020 is Rs 87 lakh.

The Finance Ministry has stated that the continued rise in the GST mop up, which has crossed the psychological Rs 1 lakh crore-mark for the third straight month in the current fiscal, is due to the combined effect of the rapid economic recovery post-pandemic and the nation-wide drive against GST evaders and fake bills along with many systemic changes introduced recently, which have led to improved compliance. 

It further said GST revenues during December 2020, have been the highest since the introduction of GST on July 1, 2017. It noted that the highest collection till now was Rs 1,13,866 crore in April 2019. It also said GST collections, which directly reflects the state of economic activity, had plummeted to a record low of Rs 32,172 crore in April, after the government imposed a nationwide lockdown to curb the spread of coronavirus. It added that subsequent easing of lockdown restrictions helped collections rise and it posted its first year-on-year growth in September 2020. 

The CNX Nifty traded in a range of 14,147.95 and 13,953.75 and there were 37 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Tata Steel up by 8.37%, Hindalco up by 6.90%, Eicher Motors up by 4.34%, ONGC up by 4.08% and TCS up by 3.91%. On the flip side, Hero MotoCorp down by 1.63%, Kotak Mahindra Bank down by 1.21%, Bajaj Finance down by 1.19%, Adani Ports &SEZ down by 1.14% and Asian Paints down by 0.78% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 175.23 points or 2.71% to 6,635.75, France’s CAC increased 95.72 points or 1.72% to 5,647.13 and Germany’s DAX increased 177.65 points or 1.29% to 13,896.43.

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.