Benchmarks trade higher with marginal gains in early deals

Indian equity benchmarks made optimistic start on Friday tracking overnight gains on Wall Street. But, soon markets trimmed most of their gains and are trading near neutral lines in early deals. Buying in Realty, Industrials and Bankex stocks supported the indices, whereas selling in Healthcare, FMCG and TECK counters kept upside in check. Early optimism came ahead of the Economic Survey that to be tabled in the Parliament today. Finance minister Nirmala Sitharaman will table the annual Economic Survey in Parliament for the growth projections for 2021-22. The Survey’s gross domestic product (GDP) growth projections for 2021-22 and estimates for the current year (2020-21) will be among the most tracked pieces of statistics as it would offer cues on how quickly the government expects the economy to accelerate to a faster lane. However, markets pared gains amid cautiousness as India witnessed a spike of 18,940 fresh cases of the coronavirus disease (Covid-19), a day after recording only 11,666 cases.

On the global front, Asian markets were trading mixed with some of the markets paring early gains despite the overnight rebound on Wall Street. Worries about a liquidity squeeze in China and highly speculative retail trading in the US weighed on sentiment. The People's Bank of China has reportedly injected 100 billion yuan into the financial system on Friday.

Back home, power stocks were in focus with rating agency Ind-Ra’s report that power generation in the country would continue to grow in fourth quarter of this fiscal year on the back of revival of electricity demand and adequate coal stocks at power plants. In scrip specific development, Shriram Transport Finance Company soared despite reporting 17 percent decline in Q3 net profit.

The BSE Sensex is currently trading at 47036.57, up by 162.21 points or 0.35% after trading in a range of 47011.09 and 47423.66. There were 18 stocks advancing against 11 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.81%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Realty up by 2.00%, Industrials up by 0.69%, Bankex up by 0.63%, Auto up by 0.57%, Consumer discretionary up by 0.49%, while Healthcare down by 0.41%, FMCG down by 0.22%, TECK down by 0.11%, IT down by 0.08%, Utilities down by 0.04% were the top  losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.47%, Bajaj Finance up by 1.91%, Mahindra & Mahindra up by 1.47%, HDFC Bank up by 1.29% and ONGC up by 1.16%. On the flip side, Axis Bank down by 1.92%, Maruti Suzuki down by 1.38%, Hindustan Unilever down by 1.12%, TCS down by 0.86% and Titan Company down by 0.70% were the top losers.

Meanwhile, to achieve a double-digit growth rate for the next fiscal year, International Monetary Fund (IMF) has said that India must ensure that the COVID-19 pandemic is well contained and the distribution and rollout of vaccines are well managed in a timely manner. It also insisted that securing a robust and sustained economic recovery will require a bold and multifaceted policy response, including investment in health infrastructure to further contain the pandemic and to ensure the availability and effective distribution of vaccines and treatments.

IMF has stated that while the economic recovery is underway, the output is projected to remain below its potential in the near-term and substantial downside risks remain. It noted that this implies that fiscal policy can and should remain accommodative next year, supporting the recovery. It also said that looking around the world at the experience of other countries, including those that were hit by the pandemic earlier, three areas seem to be priorities: higher spending in health; targeted support and assistance to vulnerable households and small and medium-sized firms; and higher public infrastructure spending.

Furthermore, it said near-term accommodative fiscal stance needs to be accompanied by a credible medium-term fiscal consolidation plan anchored on revenue mobilisation, structural reforms that boost the growth potential, and policies to tackle weaknesses in the financial sector, all of which can reinforce market confidence and contribute towards enhancing fiscal space.

The CNX Nifty is currently trading at 13853.00, up by 35.45 points or 0.26% after trading in a range of 13851.30 and 13966.85. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 3.10%, Tata Motors up by 2.51%, Bajaj Finance up by 2.47%, Mahindra & Mahindra up by 2.05% and BPCL up by 1.59%. On the flip side, Axis Bank down by 1.67%, NTPC down by 1.36%, Maruti Suzuki down by 1.23%, Cipla down by 1.13% and Hindustan Unilever down by 1.10% were the top losers.

Asian markets were trading mixed; Nikkei slipped 278.28 points or 0.99% to 27,919.14, Taiwan Weighted weakened 65.02 points or 0.42% to 15,350.86, KOSPI lost 51.73 points or 1.69% to 3,017.32 and Jakarta Composite dropped 93.61 points or 1.57% to 5,885.78. On the other hand, Straits Times added 0.19 points or 0.01% to 2,920.49, Hang Seng gained 92.41 points or 0.32% to 28,643.18 and Shanghai Composite was up by 8.19 points or 0.23% to 3,513.37.