Sensex, Nifty add gains in late morning session

Indian equity benchmarks added gains in late morning session, with both Sensex and Nifty trading higher, despite negative cues from other Asian markets. Traders were positive, amid private report stating that business resumption activity reached a record high since the start of the pandemic over 15 months ago for the week ended August 8. The Nomura India Business Resumption Index (NIBRI) rose to a record high of 99.4 for the week ending 8 August, from 94.0 last week, near the pre-pandemic level of 100, and surpassing the pre-second wave peak (of 99.3 in mid-February). Besides, Union Minister Nitin Gadkari asked all private sector entities to come forward for the development of social bonds, saying the corpus generated through the social contribution may be used to finance projects like the zero fatality corridor.

On the global front, Asian markets were trading mostly in red, even after Taiwan's exports rose more than expected in July. The figures from the Ministry of Finance revealed that exports increased 34.7 percent year-on-year in July, after a 35.1 percent rise in June. Exports of parts of electronic product, information, communication and audio-video products, base metals and articles of base metal, plastics and rubber and articles thereof, and machinery increased in July.

The BSE Sensex is currently trading at 54746.30, up by 343.45 points or 0.63% after trading in a range of 54450.34 and 54772.07. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.06%, while Small cap index was down by 0.29%.

The top gaining sectoral indices on the BSE were Telecom up by 1.78%, Energy up by 1.09%, TECK up by 0.81%, Bankex up by 0.74% and IT up by 0.69%, while Realty down by 0.88%, Utilities down by 0.57%, Power down by 0.52%, Basic Materials down by 0.41% and PSU down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.87%, Tech Mahindra up by 2.59%, Kotak Mahindra Bank up by 2.39%, HDFC up by 1.53% and Reliance Industries up by 1.50%. On the flip side, Power Grid down by 1.84%, SBI down by 0.74%, ITC down by 0.61%, Maruti Suzuki down by 0.53% and Bajaj Finserv down by 0.52% were the top losers.

Meanwhile, Centre for Monitoring Indian Economy (CMIE) has said that India witnessed an addition of 16 million jobs in July mainly in the agriculture and construction sectors, however, the number of salaried jobs fell by 3.2 million in the same month. CMIE's MD and CEO Mahesh Vyas in his analysis said ‘India saw an addition of a massive 16 million jobs in July 2021. But, all the additional employment provided by India in July was of poor quality. 18.6 million additional people were employed as small traders and daily wage labourers’. He said most of these were engaged in agriculture where 11.2 million additional people were employed. The number of salaried jobs, which are mostly better quality jobs, fell by 3.2 million in the same month.

Vyas observed ‘The big jump in employment seen in agriculture in July is a reflection of the increase in sowing activities. Monsoon has been playing truant this year. This has delayed kharif sowing activities. By the end of June 2021, kharif sowing was more than 20 per cent lower than it was in the corresponding period of 2020’. He noted by the end of July, the sowing was less than 5 per cent lower than a year ago, that is 65.3 million hectares were sown during July compared to 19.5 million hectares in June. He pointed out this could be the reason why the sharp increase in employment in agriculture is seen. Vyas further noted that employment in agriculture usually rises in July and this seems to be a seasonal pattern.

He added ‘Often, the increase begins in June, peaks in July and sometimes remains elevated in August. This is the kharif time of sowing and post-sowing agricultural activities. Employment then rises again in November during the kharif harvesting season. Agriculture absorbs an additional 8-12 million persons in the month of July. In this year, the absorption in July was on the higher side at 11.2 million’. This seasonal absorption of labour into agricultural activities is different from the large-scale migration of labour into agriculture as farmers. He explained that this happens when other sources of employment start drying up as witnessed in 2020 during the pandemic and the rise of employment in the form of farmers seen in 2020 was mostly disguised unemployment.

The CNX Nifty is currently trading at 16347.25, up by 89.00 points or 0.55% after trading in a range of 16261.05 and 16359.25. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 3.51%, Tech Mahindra up by 2.55%, Kotak Mahindra Bank up by 2.03%, Wipro up by 1.83% and Mahindra & Mahindra up by 1.57%. On the flip side, Shree Cement down by 3.50%, Power Grid down by 1.73%, Grasim Industries down by 0.87%, SBI down by 0.70% and Hindustan Unilever down by 0.61% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted dropped 140.54 points or 0.8% to 17,344.61, Jakarta Composite lost 79.31 points or 1.29% to 6,048.15, KOSPI fell 23.99 points or 0.74% to 3,236.43 and Shanghai Composite declined 4.89 points or 0.14% to 3,489.74. On the flip side, Straits Times advanced 18.22 points or 0.57% to 3,195.40, Nikkei 225 surged 45.56 points or 0.16% to 27,865.60 and Hang Seng increased 76.32 points or 0.29% to 26,359.72.