Key indices continue to trade higher in morning deals

Indian benchmark indices rose over half a percent in Monday's morning deals, tracking firm cues from their Asian peers. Sentiments remained positive with Commerce and Industry Minister Piyush Goyal’s statement that India has set a target of $400 billion merchandise exports for 2021-22 (FY22).  He mentioned ‘In collaboration with private industry, MSME sector, engineering, agriculture, automobile, steel sector, we have set an export target of $400 billion. We all will work together to achieve this target.’ Further, he said India's economy is growing and exports are also growing. However, there was some cautiousness too with a private survey showed activity in India's dominant services sector contracted sharply in June as tighter restrictions to contain a resurgence of coronavirus cases hammered demand and forced firms to shed jobs at a rapid clip. IHS Markit's Services Purchasing Managers' Index plunged to 41.2 last month from an already depressed 46.4 in May. That was its lowest reading since July 2020 and well below the 50-level separating growth from contraction. 

On the global front, Asian markets were trading mostly in green after U.S. jobs data for June showed robust hiring yet persistent weakness in the labor market that helped soothe jitters about the timing of U.S. interest-rate hikes. Back home, on the sectoral front, there was some reaction in oil & gas industry stocks as Union Finance Minister Nirmala Sitharaman ruled out any cut in excise duty levied on petroleum products for now. She said that there is no such proposal at the present to reduce prices of petroleum.

The BSE Sensex is currently trading at 52826.62, up by 341.95 points or 0.65% after trading in a range of 52604.35 and 52846.01. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.32%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were Realty up by 1.63%, Consumer discretionary up by 0.94%, Bankex up by 0.82%, Auto up by 0.81% and Telecom up by 0.70%, while Power down by 0.22% was the lone losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.41%, Maruti Suzuki up by 1.41%, Bajaj Auto up by 1.34%, TCS up by 1.25% and HDFC Bank up by 1.24%. On the flip side, Tech Mahindra down by 0.38%, Titan Company down by 0.26% and Dr. Reddy's Lab down by 0.02% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has said that the government has been proactive in responding to the challenges caused by COVID-19 and is also taking up substantial reforms despite the pandemic. She said ‘from a stage when we did not even manufacture PPE, had not enough ventilators or sufficient centres to test virology samples, we have walked a long course. From March 2020 to June 2021, the support that needs to be given to the poorest of the poor is being extended, other than that providing stimulus for the economy is happening. Simultaneously, the Reserve Bank is also monitoring and extending credit support, but above all this, the opportunity to continue with the reforms is there.’

The minister said ‘whether it was in the last tenure when you had GST and IBC (Insolvency and Bankruptcy Code) passed, or this tenure when you have agriculture Bills which have now become Acts, labour codes, mining sector reforms, reforms to financial sector, reform to distribution network of power, are all being undertaken even during the pandemic’. Talking about increasing fuel prices, and whether the government was considering reducing excise duty on petrol with prices crossing Rs 100 per litre in several cities, she said the duties on petrol are levied both by the Centre and the State and both would have to work together on this.

Talking on bringing petroleum products under GST, Sitharaman said there are no hurdles from the Centre's part, and the GST council would have to take a call. Regarding pending GST compensation to States, she said, as per the discussions held in October 2020 with all the States on loss of revenue, and as a result of lack of money to pay the compensation, a formula was arrived at and based on that formula for the year 2020-21 whatever was agreed to be given through back-to-back borrowing has already been given.

The CNX Nifty is currently trading at 15821.15, up by 98.95 points or 0.63% after trading in a range of 15762.05 and 15826.85. There were 43 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 1.82%, Hindalco up by 1.78%, Bajaj Auto up by 1.48%, Larsen & Toubro up by 1.45% and Maruti Suzuki up by 1.44%. On the flip side, HDFC Life Insurance down by 0.71%, JSW Steel down by 0.45%, Tech Mahindra down by 0.26%, Dr. Reddy's Lab down by 0.17% and Titan Co down by 0.12% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 215.23 points or 1.22% to 17,925.38, KOSPI rose 14.49 points or 0.44% to 3,296.27, Straits Times advanced 8.50 points or 0.27% to 3,137.45 and Shanghai Composite gained 5.54 points or 0.16% to 3,524.30.

On the flip side, Jakarta Composite lost 31.37 points or 0.52% to 5,991.64, Hang Seng decreased 128.70 points or 0.45% to 28,181.72 and Nikkei 225 slipped 164.80 points or 0.57% to 28,618.48.