Benchmarks recover from day's low; enters into positive terrain

Bouncing back from day's low, benchmark equity indices were trading firmly in green, with gains of around quarter a percent, which took Sensex above the psychological 52,900 level and Nifty above its crucial 15,850 mark. Sentiments were upbeat as India has significantly improved its ranking in terms of trade facilitation due to various reforms undertaken by various departments especially customs under the Central Board of Indirect Taxes (CBIC). India has scored 90.32 per cent in United Nation's Economic and Social Commission for Asia Pacific's (UNESCAP) latest Global Survey on Digital and Sustainable Trade Facilitation. However, upside remain capped as foreign institutional investors (FIIs) stood as net sellers in the capital market as they offloaded shares worth Rs 247.59 crore on Thursday, as per provisional exchange data. Meanwhile, the monsoon session of the Parliament, which began on a stormy note on Monday, is closely watched by the investors as center has listed 23 bills to be tabled in the Lok Sabha session.

On the global front, Asian markets were trading mixed amid still lingering worries over peaking spread of the delta variant of the coronavirus around the globe. Back home, in scrip specific development, Vodafone Idea tumbled by 7.35% at this point of time as Supreme Court (SC) dismissed the application of telecom companies that sought recomputation Adjusted Gross Revenue (AGR) dues demanded by the Department of Telecommunication (DoT).

The BSE Sensex is currently trading at 52980.80, up by 143.59 points or 0.27% after trading in a range of 52653.77 and 53008.53. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.06%, while Small cap index was up by 0.12%.

The top gaining sectoral indices on the BSE were Realty up by 1.08%, Metal up by 0.59%, Bankex up by 0.53%, IT up by 0.52% and Basic Materials was up by 0.51%, while Industrials down by 0.58%, Capital Goods down by 0.54%, Power down by 0.48%, Utilities down by 0.36% and PSU was down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.20%, HCL Tech up by 1.47%, Bharti Airtel up by 1.26%, Axis Bank up by 1.23% and ITC was up by 1.06%. On the flip side, Tech Mahindra down by 1.50%, Larsen & Toubro down by 1.12%, Indusind Bank down by 1.10%, NTPC down by 0.59% and HDFC Bank was down by 0.58% were the top losers.

Meanwhile, with an aim to boost production of specialty steel in India, the government has given green signal a Rs 6,322-crore production linked incentive (PLI) scheme. Information and Broadcasting Minister Anurag Thakur said that incentives worth Rs 6,322 crore will be provided over five years and it would create over 5.25 lakh jobs. He added ‘It will boost manufacturing and help in reducing imports’. Besides, the Ministry of Steel said the scheme will also attract an additional investment of about Rs 40,000 crore and lead to a capacity addition of 25 million tonnes (MT). The duration of the scheme will be five years, from 2023-24 to 2027-28.

The PLI scheme will cover coated/plated steel products, high strength/wear resistant steel, specialty rails, alloy steel products, steel wires and electrical steel. These steel products are used in white goods, automobile body parts and components, pipes for transportation of oil and gas, boilers, ballistic and armour sheets meant for defence application, high-speed railway lines, turbine components, electrical steel meant for power transformers and electric vehicles. The Steel Ministry said India presently operates at the lower end of the value chain in steel sector. Value added steel grades are largely imported in India.

It said ‘This is because of the disabilities faced by the steel industry to the tune of USD 80-100 per tonne, on account of higher logistics and infra cost, higher power and capital cost and, taxes and duties.’ The objective of the PLI scheme for specialty grade steel is to address this challenge by incentivising production of specialty steel within the country. The scheme proposes to incentivise eligible manufacturers by paying between 4 per cent to 12 per cent incentive on incremental production. PLI incentive will also help the Indian steel industry mature in terms of technology and move up the value chain, the ministry said.

According to the Steel Ministry, any company registered in India, engaged in manufacturing of the identified ‘specialty steel’ grades, will be eligible to participate in the scheme. The company has to ensure that the steel used for making ‘specialty steel’ is ‘melted and poured’ in the country, thereby ensuring end-to-end manufacturing keeping in view the Prime Minister’s Atmanirbhar Bharat’ vision. It further said the PLI scheme for specialty steel is expected to play an important role in strengthening domestic steel value chain and will incentivise the steel sector to invest in technological capability building to contribute to global steel value chain by producing value added steel.

The CNX Nifty is currently trading at 15855.95, up by 31.90 points or 0.20% after trading in a range of 15768.40 and 15876.45. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.31%, SBI Life Insurance up by 2.26%, ICICI Bank up by 2.13%, HCL Tech up by 1.51% and Tata Consumer Products was up by 1.28%. On the flip side, Tata Motors down by 2.28%, Tech Mahindra down by 1.41%, UPL down by 1.31%, Adani Ports down by 1.27% and Larsen & Toubro was down by 1.08% were the top losers.

Asian markets were trading mixed; Shanghai Composite declined 21.80 points or 0.61% to 3,552.93, Hang Seng decreased 294.57 points or 1.06% to 27,429.27, Jakarta Composite lost 43.41 points or 0.71% to 6,094.14 and Straits Times was down by 7.21 points or 0.23% to 3,152.05.

On the other hand, KOSPI rose 6.92 points or 0.21% to 3,257.13 and Taiwan Weighted was up by 0.59 points to 17,572.92.