Benchmarks trade firm in early deals; IT, TECK lead

Mirroring firm global cues, Indian equity benchmarks made gap-up opening on Friday. Markets are trading firm in early deals with gains of over 0.70% each on the back of buying in all the sector indices except metal. Sentiments got boost with report that India in 2020 has been one of the biggest and fastest-growing technology markets in the world. Digital and technology adoption in India has been increasing at a steady rate over the last few years, and the current COVID-19 pandemic has accelerated the rate of technology adoption across sectors, including in high involvement services such as education and healthcare. Some support also came in with report that the RBI will conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for Rs 10,000 crore each on January 14. The decision was taken after a review of current liquidity and financial conditions. Market participants overlooked the government report that India’s economy is set for its biggest annual contraction in records going back to 1952 as the rapid spread of coronavirus cases and measures to contain them hurt businesses and households. The statistics ministry in its first advance estimate said gross domestic product will shrink 7.7% in the financial year ending March 2021.

Most of the Asian markets were trading higher extending gains from the previous session following the record closing highs overnight on Wall Street as US lawmakers certified President-elect Joe Biden's victory. Investors are optimistic that Democratic control of the Senate will enable Biden to implement additional fiscal stimulus. Back home, aviation stocks were in focus as global airlines body IATA said that domestic passenger traffic growth in India was 49.6 percent lower in November last year as compared to the corresponding month in 2019. In scrip specific development, Tata Consultancy Services (TCS) is in limelight ahead of its December quarter earnings to be released later in the day.

The BSE Sensex is currently trading at 48454.32, up by 361.00 points or 0.75% after trading in a range of 48365.58 and 48503.71. 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 0.59%, while Small cap index was up by 0.83%.

The top gaining sectoral indices on the BSE were IT up by 1.80%, TECK up by 1.63%, Realty up by 1.50%, Oil & Gas up by 1.26%, Auto up by 1.18%, while Metal down by 0.06% was the sole losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.34%, Infosys up by 2.23%, Tech Mahindra up by 1.83%, TCS up by 1.79% and Power Grid up by 1.75%. On the flip side, HDFC down by 0.64%, Titan Company down by 0.54%, Kotak Mahindra Bank down by 0.28%, Bajaj Finserv down by 0.08% and Bharti Airtel down by 0.06% were the top losers.

Meanwhile, the Central Board of Indirect Taxes & Customs (CBIC) has introduced liberalised Authorised Economic Operator package for micro, small and medium enterprises (MSMEs) for swift customs clearances. In order to attract MSMEs to become Authorised Economic Operators (AEOs) and avail various benefits, the CBIC has relaxed the compliance criteria provided the MSMEs have a valid certificate from their line-ministry.

The relaxed requirements allow MSMEs who have filed minimum 10 customs clearance documents in one year and who have a clean compliance record over 2 years to apply for the scheme. The documentary requirements have also been appreciably simplified. Another feature is that the CBIC commits to take a decision on an application for grant of AEO status within only 15 days from electronic submission of complete documents for AEO Tier 1. Additional benefits, like further reduction in Bank Guarantee requirements, have been introduced for MSMEs, and will be expanded subsequently.

The approved AEOs derive various benefits including the facility of Direct Port Delivery (DPD) of imported containers, Direct Port Entry (DPE) of their Export Containers, high level of facilitation in customs clearance of their consignments thereby ensuring shorter cargo release time, exemption from bank guarantees, as well as a Client Relationship Manager at the customs port as a single point of interaction.

The CNX Nifty is currently trading at 14238.75, up by 101.40 points or 0.72% after trading in a range of 14221.65 and 14259.15. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were UPL up by 4.25%, BPCL up by 2.87%, Eicher Motors up by 2.51%, Sun Pharma up by 2.39% and Tech Mahindra up by 2.01%. On the flip side, Hindalco down by 1.45%, Titan Company down by 1.16%, HDFC down by 0.87%, Tata Steel down by 0.54% and Bajaj Finance down by 0.16% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 539.92 points or 1.96% to 28,030.05, Straits Times advanced 54.67 points or 1.88% to 2,961.64, Hang Seng soared 343.91 points or 1.25% to 27,892.43, Taiwan Weighted gained 155.40 points or 1.02% to 15,369.40, KOSPI jumped 85.43 points or 2.82% to 3,117.11 and Jakarta Composite rose 89.36 points or 1.45% to 6,242.99, while Shanghai Composite was down by 22.24 points or 0.62% to 3,553.96.